WILKES-BARRE TWP. -- In a sign that the Centax tax collection debacle has affected even the most financially stable Luzerne County municipalities, Wilkes-Barre Township will raise property taxes for the first time in 35 years.
The township, home to the Wyoming Valley Mall and the surrounding commercial district, passed the tax hike on first reading this week.
Township Administrator Michael Revitt said the municipality is facing a budget shortfall of about $650,000, which he blamed almost entirely on Centax/Don Wilkinson Agency's failure to release more than $500,000 in earned income and other tax revenue it owes the municipality.
We're down half a million dollars, and we don't know when that money is going to be recovered, Revitt said, adding, I don't expect it's going to be anytime soon.
Wilkes-Barre Township is one of many Luzerne County municipalities awaiting earned income tax revenue collected in 2012 by Centax. After collecting the taxes for all county municipalities, Centax was unable to determine which tax revenues it owed to each municipality.
Centax sold its accounts to Berkheimer & Associates in August, but Berkheimer has been hampered in resolving tax issues because all Centax records and accounts were frozen as part of a lawsuit filed in Allegheny County Court by the borough of Green Tree, according to The Times Leader archives.
Revitt said the Centax debacle hit the township doubly hard because Centax collected other taxes and fees for the township, including local services taxes, mercantile taxes and sewer fees.
When they realized they had a problem with the earned income tax, everything else took a back seat, he said.
Tax rates in the township will rise from 1.2507 mills to 1.6 mills next year, which equates to a $34.93 increase for a property assessed at $100,000, with the tax bill rising from $125.07 to $160. Revitt said the average residential property owner will pay about $19 more, based on average property values.
Revitt also said the township's preliminary $4 million budget was affected by successful property value assessment appeals by several large commercial properties and an upcoming sewer upgrade project expected to cost between $1.2 and $1.5 million.
According to county records, the Wyoming Valley Mall recently had its assessed value reduced by $13 million to $76.1 million. Under the old tax rates, the mall would have owed the township about $16,000 less in 2013 because of the reassessment; it will pay about $10,000 more in 2013 due to the tax increase.
Revitt added the township wants to move forward on the sewer project soon because the reality is, interest rates in our lifetime will probably never be better.
If we wait it could cost us tens of thousands of dollars in interest, he said.
Revitt said Monday's council meeting was sparsely attended by township residents, an indication they understand the need for the higher tax revenue.
We still have no garbage fee; we have no recycling fee; we have one of the lowest sewer fees in Northeast Pennsylvania, Revitt said. We really do provide a lot of services for their tax dollars. I think our residents understand that this is something that has to be done.