Tax hike could hit Seven Fields business owners
Seven Fields property owners aren't expected to see their real estate taxes rise next year, but many business owners will be digging deeper into their pockets to pay business privilege taxes if council adopts its proposed 2014 budget.
Businesses in the borough with $100,000 or more in gross income would pay $1,000 in tax, according to borough Manager Tom Smith, up from $500 for businesses that make more than $50,000.
“Even though they're doubling the tax, they're doubling the benchmark,” Smith said of borough council. “They're trying to prevent this from hurting businesses. They're trying to be less punitive.”
Property taxes will remain at 7 mills. One mill generates nearly $33,400 in tax income for the borough.
Robert Spence, who runs an accounting business out of his Seven Fields home with two other employees, said the increased business privilege tax would take an unfair bite because he would pay the same amount as much bigger businesses. He noted that at least one neighboring community, Adams, doesn't have the tax.
“I've complained about this every year when I was writing a check for $500,” Spence said. “I'll have a stroke every January now writing that check for $1,000. This absolutely kills the small businesses.”
Spence said that since the threshold is based on a business' gross income and not profits, that could mean a business clearing $10,000 in profit would lose 10 percent to tax.
Seven Fields expects to collect about $42,000 with the revised business tax, up from about $21,000 in 2013. With a 2014 budget that calls for $1.176 million in revenue and $1.2 in expenses, the borough will use $12,000 in water revenue to cover the shortfall.
The borough initially proposed raising the higher tax threshold to $55,000, but council last month decided to raise it to $100,000. Of approximately 125 businesses in the borough, Smith said the majority won't reach the threshold to pay.
“We're not hammering people,” Smith said.
Smith said the business tax is one of the smaller sources of revenue for the borough. Real estate taxes for 2014 are budgeted to generate $228,500, the local services tax $45,000 and earned income tax another $625,000.
Looking ahead, the borough hopes to save $150,000 annually through a regional police force. Evans City last week agreed to disband its police department at the end of 2014 for a joint force with Seven Fields on Jan. 1, 2015. Seven Fields council is expected to approve that agreement Monday, Smith said.
Council has been paying Cranberry for police protection, budgeting nearly $367,000 for 2014.
If the savings from a combined police force comes through as expected, Smith said, the borough could re-evaluate the business tax again within the next couple of years.
Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or firstname.lastname@example.org.