Senate News Update
From Senator Jane Earll
July 6, 2011

Pennsylvania's Property Tax Collection System

About a year ago, I sponsored Senate Resolution 250, asking the Legislative Budget & Finance Committee (a non-partisan research arm of the General Assembly) to assemble data on the methods and costs of collecting real property taxes.   The goal of the study was to obtain a better understanding of the real property tax collection systems utilized by the various local communities throughout the Commonwealth of Pennsylvania, which is both large and diverse.  It was also my intention to determine whether there were opportunities to improve upon the collection of real property taxes and whether there were any opportunities for potential cost savings.

The Committee released its findings in June, indicating there are some opportunities for reducing costs for taxing bodies to consider.  Furthermore, it notes that that there may actually be an increase in costs if current collectors of property taxes -- who often collect per capita and local services taxes, too -- were to be consolidated, due to personnel and information technology expenses.  The methods, although varied (local elected or appointed tax collectors and/or county- or school district-level collection), appear to be cost-effective, and provide the advantage of utilizing an individual who knows the area, who can anticipate when any changes need to be reported to county assessors and who can provide valuable information and assistance to taxpayers.

Some concerns related to qualifications (eligibility for the surety bond, training) and continuity (in the event of a death or other event interfering with the tax collector's functioning) do exist.  Lack of uniformity in reporting data and implementation of technology can also cause difficulties for those managing or transferring property (including taxpayers, attorneys and taxing districts).

These concerns can be addressed using a different method of qualifying for election (proof of surety bond eligibility in advance), appointing a "back up" through the county in the event of a disabling event, and even allowing voluntary cooperative agreements for county, school district and municipal sharing of duties.

I have never been one to seek a solution (legislatively or otherwise) without first identifying a problem that needs fixing, and this report would seem to indicate that many of Pennsylvania's local taxing jurisdictions do a good job collecting real property taxes in a cost-effective way; however it does suggest that each individual taxing jurisdiction should consider potential opportunities for saving (i.e., review the method used to compensate tax collectors, etc.).  Ultimately, individuals looking at this report could gain a better understanding of the local real property tax collection systems in Pennsylvania, and determine whether there are areas for improvement, which should be the goal of any government structure.

The full study is available online at http://lbfc.legis.state.pa.us/ by clicking on "Reports Released" at the left, and then scrolling down to "State and Local Government" in the topical listing.  The Senate Finance Committee will review the results as the session of 2011-2012 continues.

Contact: Senator Jane Earll's office, 814-453-2515 or jearll@pasen.gov.