Tax delinquents make impact in Western Pennsylvania
Real estate tax bills are reaching households this month, but municipalities and school districts that rely on taxable land for operating money know many property owners won't pay their share.
Tax delinquency rates in Western Pennsylvania can reach as high as 25 percent, the Tribune-Review found by speaking to budget and finance officials, a reality that further squeezes the budgets of cash-strapped boroughs, townships, cities and school districts.
“If we were able to collect an additional 10, 5, 7 percent, we'd be in a much better financial condition,” said Philip Martell, director of finance and operations for Wilkinsburg School District, which routinely does not collect 22 to 25 percent of the $13.1 million in property taxes it levies on about 5,000 parcels. “We have to get these numbers up. It's one of the few places that school districts can increase revenues.”
Part of the blame falls on taxpayers, but some goes to taxing bodies, said Kevin Gillen, an economist at the University of Pennsylvania's Fels Institute of Government.
Enforcement should be strict and people should feel they get what they paid for, in terms of police, fire and other services, Gillen said. Uncollected taxes can lead to inefficient government. “There's a very high correlation between delinquency and municipal performance,” he said.
Municipal governments and school districts are not required to report delinquencies to county or state agencies. The Allegheny Intermediate Unit does not track delinquency rates among school districts, and municipal leagues don't track rates for townships and boroughs.
Taxing bodies often give delinquent accounts to private collectors. Some scofflaws end up in court. Districts and municipalities in Allegheny County have sued 1,454 property owners for taxes since this year began.
‘Impacts the budget'
Delinquency rates remain steady over time. Reassessments and property tax increases appear to have little effect on how many people pay taxes, according to tax collectors and budget officials.
Despite a tax increase from 12 mills to 17 mills last year, delinquencies in Youngwood hovered at less than 5 percent, said Diane Derco, secretary and treasurer. The borough of 3,000 residents in Westmoreland County had $20,328 in uncollected taxes out of the $452,080 levied, or about 4.5 percent, Derco said.
“Every amount of dollars impacts the budget, whether it's $2,000 or $20,000,” Derco said. “We factor it in. You have to take a percentage off” when budgeting.
Delinquency rates in Brownsville Area School District, which covers several Fayette County municipalities and West Brownsville in Washington County, ranged from 15 percent in Fayette County communities to 25 percent in West Brownsville, Business Manager Mike Gigliotti said.
Those rates held steady even when the district raised taxes from 13.07 mills to 16.57 mills in 2011, he said. Brownsville schools were owed more than $740,700 in uncollected property taxes in 2012. The district was due to collect $5.18 million during the 2012-13 school year.
Pittsburgh and its school district have about 23,700 delinquent accounts, according to the city's website. Officials did not respond to requests for more information.
In Clairton, the school district expects to collect 68 percent of the tax it should, Business Administrator Charles Lanna said. As of mid-January, the district had not collected $945,000 of $2.9 million levied in property taxes, Lanna said.
A major assessment appeal by U.S. Steel Corp. — the largest taxpayer — lowered the values of six properties in Clairton by a combined $12.3 million.
By contrast, Mt. Lebanon's property tax collections are near 100 percent, Tax Office Manager Mary Abbott said. The municipality collected 97.5 percent of $12.2 million it levied in 2013.
Tax collectors say some accounts are impossible to collect. Odd-shaped lots with no buildings have no addresses to send bills, and some properties are so behind that accumulated penalties and fees are more than the tax owed. Some property owners aren't around to write checks.
“If you want to send them a bill, you'd have to send it to the cemetery,” said Charles Gross, tax collector for Dravosburg and McKeesport Area School District.
Gross estimated about 20 to 25 of the borough's 900 accounts are uncollectable.
Yet, he said, “We have a large amount of senior citizens, and senior citizens are good at paying their taxes. I'm pretty proud of the residents of our town. They feel that it's their civic duty.”
Wilkinsburg and its school district offered tax amnesty for two months last year, letting people pay back taxes without penalty. The school district made $780,000 during the amnesty program in May and June, Martell said. The borough, with delinquency rates around 20 percent, collected about $200,500 in November and December, Finance Director Dave Egler said.
The borough and school district are considering repeating the amnesty program. “It's better to get something, rather than nothing,” Egler said.
But Tom Ginsberg, a project manager for Pew's Philadelphia Research Initiative, says tax penalty forgiveness should be a one-time gift followed by strict enforcement.
“It's a form of kicking the can down the road,” Ginsberg said of amnesty programs. “If you don't enforce, then you're going to have the same problem.”
Staff writer Kari Andren contributed to this report. Aaron Aupperlee is a Trib Total Media staff writer.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- $500K grant to fund bike sharing comes through for Pittsburgh
- With Pittsburgh charges, feds target Uganda-based counterfeiting ring
- Tax exemptions cost Allegheny County governments $620M, auditor general reports
- Motivation in slaying of Penn Hills couple remains unclear
- Strip District merchants say pay stations will drive out shoopers relying on free spots
- Inspections will force Liberty Bridge lane closures on Friday
- PennDOT to begin changing Glenbury Street Friday, part of Route 51/ 88 intersection rehab
- Newsmaker: Gregory Reed
- Pittsburgh Public Schools adopts no-tax-increase budget for 2015
- Portion of Baum Boulevard closed after bricks fall from building
- Swissvale man found shot to death in Beltzhoover