Tax-Exempt Properties Pose
Budgetary Problem
By ANNE HOLLIDAY
WESB/WBRR News Director
Every year when budget time rolls around, Bradford officials lament the number of tax-exempt properties in the city.
This year, the problem is even more glaring as the city faces a budget deficit and dwindling sources of income.
Between 33 and 35 percent of the properties in Bradford have been tax-exempt for years, according to City Clerk John Peterson.
By contrast, in Clarion Borough 72 to 73 percent of its properties are tax-exempt.
"I can't fathom 70 percent. Thirty-five percent is bad enough," Peterson said during a city council work session Tuesday night.
The state Legislature is not blind to the problem.
In May, Senator John Pippy started calling hearings to discuss the impact tax-exempt properties have on the fiscal status of Pennsylvania municipalities.
"I’ve heard many concerns from cities and urban areas about tax-exempt properties and their impact on tax revenue and long-term growth," Pippy said.
In all but one of the 11 Pennsylvania fiscally distressed municipalities reviewed in the Legislative Budget and Finance Committee report, local governments (county, municipal, and public schools) accounted for the largest share of tax-exempt property. After local government structures, churches tend to account for the next highest share of tax-exempt property.
Pippy noted that many tax-exempt properties, such as the University of Pittsburgh, make voluntary payments to communities in lieu of taxes.
"While we recognize there is no uniformity when it comes to these payments, we also recognize that not all nonprofits are alike," Pippy said. "These tax-exempt entities provide a valuable service and economic engine for growth and development in the Commonwealth. While finding a solution for our distressed municipalities is essential, any decision impacting tax exempt entities has to be reviewed."
During Tuesday's work session, Peterson made a similar statement, saying "You're providing services to your non-profits. Everybody benefits from it."
However, the Legislature did have a chance to help communities in which more than 20 percent of the properties are tax-exempt. Peterson explained that a piece of legislation dealing with the Johnstown Flood Tax and an optional county sales tax died in Harrisburg.
He said an estimate was that Bradford could have gotten as much as $1 million if the bill passed.
"No more budget crisis. Gone," he said.
Peterson did say a watered down version may still may it through the Legislature.
Locally, people are trying to come up with solutions, too. City employees made a suggestion they think would mitigate the impact tax-exempt properties have on the city's finances.
During a work session last week, employees suggested to city council that the city charge a service fee to entities that don't pay property tax.
City officials are still working on next year's budget and trying to decide whether to apply for the state's Early Intervention Program for financially troubled municipalities.
http://1490newsblog.blogspot.com/2009/05/committee-looks-at-impact-of-tax-exempt.html
WESB/WBRR News Director
Every year when budget time rolls around, Bradford officials lament the number of tax-exempt properties in the city.
This year, the problem is even more glaring as the city faces a budget deficit and dwindling sources of income.
Between 33 and 35 percent of the properties in Bradford have been tax-exempt for years, according to City Clerk John Peterson.
By contrast, in Clarion Borough 72 to 73 percent of its properties are tax-exempt.
"I can't fathom 70 percent. Thirty-five percent is bad enough," Peterson said during a city council work session Tuesday night.
The state Legislature is not blind to the problem.
In May, Senator John Pippy started calling hearings to discuss the impact tax-exempt properties have on the fiscal status of Pennsylvania municipalities.
"I’ve heard many concerns from cities and urban areas about tax-exempt properties and their impact on tax revenue and long-term growth," Pippy said.
In all but one of the 11 Pennsylvania fiscally distressed municipalities reviewed in the Legislative Budget and Finance Committee report, local governments (county, municipal, and public schools) accounted for the largest share of tax-exempt property. After local government structures, churches tend to account for the next highest share of tax-exempt property.
Pippy noted that many tax-exempt properties, such as the University of Pittsburgh, make voluntary payments to communities in lieu of taxes.
"While we recognize there is no uniformity when it comes to these payments, we also recognize that not all nonprofits are alike," Pippy said. "These tax-exempt entities provide a valuable service and economic engine for growth and development in the Commonwealth. While finding a solution for our distressed municipalities is essential, any decision impacting tax exempt entities has to be reviewed."
During Tuesday's work session, Peterson made a similar statement, saying "You're providing services to your non-profits. Everybody benefits from it."
However, the Legislature did have a chance to help communities in which more than 20 percent of the properties are tax-exempt. Peterson explained that a piece of legislation dealing with the Johnstown Flood Tax and an optional county sales tax died in Harrisburg.
He said an estimate was that Bradford could have gotten as much as $1 million if the bill passed.
"No more budget crisis. Gone," he said.
Peterson did say a watered down version may still may it through the Legislature.
Locally, people are trying to come up with solutions, too. City employees made a suggestion they think would mitigate the impact tax-exempt properties have on the city's finances.
During a work session last week, employees suggested to city council that the city charge a service fee to entities that don't pay property tax.
City officials are still working on next year's budget and trying to decide whether to apply for the state's Early Intervention Program for financially troubled municipalities.
http://1490newsblog.blogspot.com/2009/05/committee-looks-at-impact-of-tax-exempt.html
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