Dropped names, delays in tax mailings result in Hempfield budget headaches
Hempfield Township faces a $600,000 shortfall in per capita tax revenue this year because of a switch in collection agencies that resulted in the elimination of names from the rolls and delays in some tax bill mailings.
The township and the Hempfield Area School District replaced Central Tax Bureau in Bridgeville with Keystone Collections Group in Irwin as collector for per capita taxes.
Some residents didn't receive tax notices or discovered they no longer are listed on tax rolls, according to township and district officials.
Hempfield Manager Kurt Ferguson said the change has caused collections to plummet because of problems in getting accurate tax information and the timely delivery of tax notices.
Ferguson said Hempfield collected nearly $3 million in 2008 but so far this year has collected only $1.6 million. He said the supervisors anticipated lower revenue this year, given the economic climate, and took that into account when they planned the 2009 budget.
But supervisors didn't expect collections to be this low, he said, estimating the township will receive $1 million less in tax revenue.
"Our collection is falling far short of the decreased expectations," Ferguson said. "It's clearly not the result of the recession. We should be doing better than those numbers."
Lawrence Newlon of West Point said he inquired about his tax bill after a neighbor noticed his name wasn't on the tax rolls. Newlon decided to check because he hadn't received notice that his taxes were due.
He called Central Tax Bureau and was told they had sent tax information to Keystone, he said. Keystone told Newlon they hadn't received all of his information from Central.
"I did get my bill," he said.
Ferguson said Central is collecting the delinquent taxes, but the township hasn't seen any of the money.
"We have a vested interest in collecting this money," he said. "We need to account for that money in the budget."
Jude Abraham, business manager for the school district, said when Keystone took over, the company had problems obtaining the electronic tax data Central had sent, which has caused further delays in mailing tax notices.
"Some of the data was corrupt," Abraham said. "They had problem getting the right data."
Per capita taxes are due Nov. 15. In the township and school district, the bill is $14.70 if it's paid before the deadline. The penalty after Nov. 15 is 30 cents until Jan. 17, 2010, when it increases to 75 cents.
"If you don't get a bill, you're not exempt or exonerated," Abraham said.
The township relies heavily on the tax revenue to balance its budget. Abraham said the impact on the school district isn't as great because the per capita tax amounts to less than 5 percent of the budget.
Jerri Davis, a spokeswoman for Central, said her firm gave Keystone the master files, file records and codes needed to prepare tax bills. She said Central returned checks to taxpayers with a letter advising them to forward the payments to Keystone.
"All the necessary contact information for Keystone was provided, including name, phone numbers and addresses," she said.
Davis said there was a delay in obtaining electronic information from the state because the school district did not sign an authorization form allowing Central to obtain the data. She said Central made two requests, "and it took over seven months for the school district to respond." That delay also affected the processing of delinquent tax information, she added.
She said Central "has made every reasonable effort to cooperate with the new collector and consistent with the best interests of the township and school district" during the transition.
Davis said her company is disappointed in the change after serving Hempfield for 25 years.
"Although our record speaks for itself — the lowest commission rate, 25 years of stellar service to Hempfield, aggressive collection of delinquent taxes through use of local courts, and the issuing of many audit assessments — that sometimes isn't enough," Davis said.