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Tax scofflaws get ink

| Sunday, Dec. 11, 2005

A little embarrassment can go a long way toward motivating delinquent taxpayers.

Highlands School District, which published a list of about 800 properties with delinquent taxes, reported a 10 percent increase in the amount of taxes paid this fall.

"There has not been a rush of people coming in to pay their taxes since the list was published," district spokesman Jason Walker said. "But there was an increase just prior."

School districts in Allegheny County have to resort to unusual and sometimes drastic measures to bring in overdue taxes. Delinquent tax rates in that county dwarf similar figures in neighboring counties.

Local government experts say there are several reasons for the high delinquency rate in Allegheny County, including the massive industrial decline that shifted much of the tax burden from large corporations to small property owners.

But another reason for the discrepancy is the unique way in which Allegheny County school districts collect. Every county in Pennsylvania except Philadelphia and Allegheny is required to collect delinquent school, municipal and county taxes through a county-run tax claim bureau. However, in Allegheny County, it is left to the individual school districts.

"In Allegheny County it's a free-for-all," said municipal finance consultant Michael Weir, who studied the issue extensively while working for the Pennsylvania Economy League. "They can each do it however they want to do it."

Highlands School Board members were irked by the unfairness to property owners who pay their fair share each year. So they decided to buy an ad in the newspaper, publishing an eight-page list of property owners who owed back taxes.

As of June 30, Highlands residents owed $3.19 million in delinquent property taxes. By Nov. 30, the district had collected $750,000 of that, about 10 percent more than in other years.

Other Allegheny County school boards do not appear ready to follow Highlands' lead and publish the names of delinquent taxpayers. None have voted to publish a similar list, while Westmoreland County does it routinely.

"I think the school board has taken a dim view of posting names," Riverview business manager Frank Thompson said. "But, of course, the pressure that's put on us by people not paying their taxes makes the district raise taxes on the people who do pay."

Some have used other strategies to collect delinquent taxes. Plum hired a Pittsburgh law firm to track down property owners. The lawyers' fee is a 5 percent penalty added to the delinquent tax bill, meaning other district taxpayers don't have to pay for the collection service, district spokeswoman Dawn Check said.

"It's worked very well and it has saved the taxpayers a great deal," Check said.

School districts in Armstrong, Butler and Westmoreland counties don't have to hire their own lawyers or resort to public embarrassment to track down delinquent taxpayers. Those counties have tax claim bureaus that do the work for them, resulting in far lower percentages of back taxes on their books.

"It's really never been a concern for us," said Gary Shepler, business manager at Leechburg Area School District, which has a delinquent tax total of $74,000, less than one-tenth the amount Highlands collected in five months.

Allegheny County Controller Mark Patrick Flaherty has proposed creating a tax claim bureau for that county, saying it would help local districts pare down the delinquent tax total.

Many district business managers point out that a 100 percent collection rate is impossible, no matter how diligent the collection process.

"Some of that is just uncollectible," Freeport Area business manager Bill Reilly said.

Some properties are abandoned. Some owners fall so hopelessly far behind they'll never be able to pay. In some cases, auctioning the property won't bring in as much money as the former owner owed in taxes, Reilly said.

Regardless of collection tactics, however, most district officials say a certain small percentage of property owners will undoubtedly become delinquent.

"You can write all the letters you want; you can threaten," Thompson said. "But some people are just not going to pay their taxes."

Pittsburgh Tribune-Review staff writer Brandon Keat contributed to this story.

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