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Luzerne County property owners who wrongly received homestead tax breaks on multiple properties will be expected to repay the county, Solicitor C. David Pedri said Thursday.
Records show former county controller Walter Griffith and county Council members Eileen Sorokas and Harry Haas received county and school property tax reductions on more than one property, even though the homestead break is only for one primary, owner-occupied residence.
County Controller Michelle Bednar said she believes there are many more and has pledged to identify all violations.
She received a list of all homestead recipients from the administration Thursday. Her office will sort the data in a spreadsheet to identify other same-named recipients of multiple homesteads that warrant further review.
“The Office of Law as well as the controller have an interest in making sure tax money is correctly paid to Luzerne County, and we will take steps either through civil action or reaching agreements with these individuals to make sure the proper amount is paid,” Pedri said.
The county spent around $4.9 million last year providing a homestead tax break that amounted to a $57 savings on county taxes for 86,000 homestead participants. The county started offering the break in 2009.
The controller’s findings also will be presented to school districts, which use the county homestead database to provide gambling-funded school tax reductions. School district officials must determine how to pursue repayment of that break from ineligible recipients, said Bednar and Pedri.
Though the county canceled its homestead break in 2015 for budgetary reasons, school districts continue to provide the gambling-funded breaks ranging from around $52 to $213 annually, depending on the district.
Double-dippers
Wilkes-Barre Area School District Solicitor Raymond Wendolowski said each school district receives an allocation of casino gambling tax revenue that must be equally distributed to all homestead participants, which means property owners who claim the benefit on more than one property take money away from valid recipients.
Double- and triple-dipping “diminishes the pot,” he said.
Gov. Tom Wolf also wants to use the homestead program to distribute additional school property tax relief, which increases the need to make sure the database contains only eligible recipients, Wendolowski said.
Bednar said that’s one of the reasons she’s investing resources to review the homestead roster.
“School districts depend on the county to make sure the list of recipients is right,” Bednar said. “This is really important. It’s taxpayers’ money.”
Council members also have discussed restoring the county homestead tax break in three years if funding is available. The cost may decrease significantly with the removal of ineligible participants, Bednar said.
Pedri said his office doesn’t have authority to pursue criminal charges against multiple-property recipients suspected of knowingly filing false applications.
DA involvement
Bednar said she will report all potential fraud cases to the District Attorney’s Office for its review.
The homestead application says property owners who lie could face prosecution on a third-degree misdemeanor with a fine up to $2,500.
County Budget/Finance Division Head Brian Swetz, who oversees the assessment office, said officials must determine if ineligible recipients will be billed for the amount they received incorrectly with or without interest and a 10-percent penalty.
“Whatever approach is used, it will be applied equally for all offenders,” Swetz said, noting records will be reviewed back to the start of the school homestead tax breaks in 2008.
Swetz said he has instructed his staff to provide the controller’s office with access to all records and computer programs needed to review the homestead, including the assessment system and tax bills.
Tax base issues
In another attempt to address concerns, the county also will publicly seek proposals starting next week from individuals or entities interested in identifying properties or additions that are not on the tax rolls, Swetz said. Hazleton resident Dee Deakos had pitched the idea last year, saying she would accept a one-time commission for adding missed properties to the tax rolls.
County Manager Robert Lawton said all issues with the tax base, including those that developed before the county’s 2012 switch to home rule, must be rectified.
“The property tax is often a regressive tax by definition, and we owe it to all residents of the county to have the highest level of integrity in our property tax system from valuation to assessment to collections,” Lawton said.
Bednar said she has the authority by law to request proof from property owners that they live at the property they claim as a primary residence, including driver’s licenses, voter registration cards and personal income tax or local earned income tax forms.
Applications also may be reviewed, she said.
Applicants must check a box indicating if the property is their primary residence. Another question asks if the property owner or his or her spouse receives a homestead tax abatement or other homestead benefit on another property, including one in another county or state.
The application instruction sheet says property owners must notify the assessor within 45 days of a change in use that means they no longer qualify for the homestead.
Repair garage
Bednar also said she will try to figure out how at least one property — Griffith’s commercial garage in Nanticoke — received a break when he stated it was not his primary residence on his application.
Officials in other states have wrestled with property owners claiming multiple homestead breaks, according to published reports.
Indiana residents were required to submit new homestead eligibility verification forms containing the last five digits of their Social Security numbers to help weed out double-dippers for removal and repayment of unwarranted tax breaks.
A county district attorney in New York announced “rampant abuse” of the state’s STAR tax rebate program for homeowners in 2013, offering offenders an amnesty to pay money owed to avoid potential criminal charges.
Several Florida counties have fraud hotlines to report double-dippers and assign workers to call other states to ensure homestead applicants aren’t claiming primary residences elsewhere.