Jeannette School District works to bring in delinquent taxes
At a meeting early this year, the Jeannette School Board voted in favor of hiring the Municipal Revenue Service to aid in the recovery of delinquent tax liens.
The Municipal Revenue Service, located in McKean is a patented tax lien management program. Right now, the school board is uncertain whether the district will move forward with the company.
“They are an outside entity that takes our tax claims and issue a bond to the school district based on those numbers. You get the money from them up front,” said Superintendent Matthew Hutcheson. “The expectation is that, through their collection efforts, they will pay off the bond note, and any excess comes to us.”
The district is currently discussing all options for recovering delinquent taxes, which currently total over $800,000 for a three year period spanning 2010-13.
“Basically, we have to figure out if we are potentially able to collect the taxes ourselves, because the company, essentially, isn't doing anything extra for us,” said Hutcheson. “It caused us a little concern, because if they don't meet their collection total, we may have to pay back some of the money from the initial bond. It may not be in our best interest to use them.”
All plans are currently on hold, allowing the district's solicitor to research each option and advise the board on what may be best for the district.
Although Hutcheson said he does not keep track of the district's worst offenders, he listed Abe Zion, who owns the former Jeannette Glass plant, and Monsour, one of Jeannette's former medical centers, as two entities responsible for large portions of the outstanding taxes.
“We operate right now, based on an approximate 82 percent collection total for all taxes. Roughly $600,000 comes from family homesteads/farmsteads,” said Hutcheson. “The rest, approximately $500,000, is delinquent taxes.”
Hutcheson said the district cannot list all the reasons why families and businesses accumulate such high, unpaid tax totals.
“It's based on each individual situation,” said Hutcheson. “It could be bad revenues. Sometimes it's whatever their case happens to be on an annual basis.”
If the district were to collect 100 percent of taxes each year, it could maintain a consistent revenue. Currently, the district projects its revenue based on what they believe they will receive each year.
“The recovered taxes could be put into the district's general fund. I never project that I am going to receive 100 percent of back taxes each year,” said Hutcheson. “I start with the portion I believe I'll get and I build the budget from there. Basically, you have to make your best guess when projecting for the following year.”
Hutcheson believes that by collecting even an additional $100,000 each year, the school district would be able to add certain programs and educational items to its facilities. It could also pursue additional staffing options.
“All we're doing right now is relying on whatever comes in through the county. We don't have anyone knocking on doors for these taxes,” said Hutcheson. “We'll never have numbers that are solid. We don't know how things will change from year to year. You make a best guess and hope, at the end of the school year, you come close to breaking even.”
For more information on the school board's decision and progress, contact the superintendent's office or attend the next board meeting at 8 p.m. April 28.
Kaylie Harper is a contributing writer.