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Going down! Commissioners cut property tax rate by 5.9 percent

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BY JAMES LOEWENSTEIN (Staff Writer)   Published: December 21, 2012 In Daily Review.com

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Review Photo/JAMES LOEWENSTEIN From left: Chief County Clerk Michelle Shedden, McLinko, Commissioner Daryl Miller, and Commissioner Mark Smith.

TOWANDA - The Bradford County commissioners on Thursday passed a $61.2 million county budget for 2013 which includes a 5.9 percent decrease in the county property tax rate.

The millions of dollars in annual revenue that the county has started to receive from the impact fee on gas drilling companies is allowing the county to reduce its property tax rate, county officials said.

"This is a terrific day in Bradford County," said Doug McLinko, chairman of the Bradford County commissioners.

The Bradford County commissioners on Thursday voted unanimously to eliminate the .65-mil portion of the county property tax bill that is used to pay debt service on bonds issued by the county, which amounts to a 5.9 percent reduction in the overall county property tax rate, said Bradford County Fiscal Director Joan Sanderson.

The debt service portion of the property tax bill has been eliminated until such time as the county starts to take on debt again, which is not expected to occur for at least the next several years, she said.

As a result of the decrease in the property tax rate, the owner of a house assessed at $50,000 will see a $32.50 reduction in his 2013 county property tax bill, Sanderson said. In Bradford County, houses are assessed at half their market value.

Victor Lawson, the former chairman of the grassroots group Bradford County Concerned Citizens, praised the commissioners for passing the tax decrease.

"This is amazing," Lawson said. "I think it's great for the property taxpayers. A lot of them can't afford to pay their property taxes."

The .65-mil portion of the tax bill that was eliminated was used to pay the debt service on two bonds that had been issued by the county, one to raise money to expand the Bradford County jail in the 2000s, and the other to pay the upfront costs for the county's guaranteed energy savings project (GESP), which made the county-owned buildings more energy efficient.

Over the next three years, the county will set aside a total of $4.68 million to pay off the two bonds, Sanderson said.

Because the county has to abide by a set schedule for paying off the bonds in the coming years, the county cannot pay off the bonds entirely this year, Sanderson said.

However, the elimination of the entire .65-mil debt service portion of the tax bill is being done now, she said.

Reducing taxes is one of the allowed uses of the Act 13 impact fee. However, under Act 13, Bradford County cannot use revenue from the impact fee to eliminate its debt, Bradford County Commissioner Daryl Miller said.

Therefore, over the next three years, the county will use $4.68 million in impact fee revenue for specific purposes that are allowed under Act 13, while at the same time withdrawing a total of $4.68 million from the county's General Fund to pay off the bonds, Sanderson said.

In 2013, for example, the county will spend $740,210 in impact fee revenue to help operate the county jail - which is an allowable use of impact fee money under Act 13 - while at the same time withdrawing $740,210 to help pay off the county's debt, she said.

To finish paying off the county debt, the county will withdraw from the General Fund $1.0 million in 2014 and $2.94 million in 2015, she said.

"The way this was done (using the impact fee money to reduce the county's property tax rate) complies with the law," McLinko said. The Pennsylvania Public Utility Commission, which is administering the impact fee law, has approved the method by which the county is using impact fee money to reduce the county debt, McLinko said.

In addition, McLinko and Miller said they recently met with Lt. Gov. Jim Cawley to discuss the way the county is using impact fee money.

"He's in full support of what we're doing," McLinko said.

Cawley had chaired a committee that had been set up by Gov. Tom Corbett to advise him on matters related to Marcellus Shale gas drilling, and it was that committee that had recommended establishing the impact fee.

The commissioners voted unanimously on Thursday to adopt the 2013 budget and set the county property tax rate for 2013 at 10.43 mils. The county property tax rate in 2012 had been 11.08 mils.

Smith, a Democrat, had initially opposed reducing the eliminating the debt service portion of the tax bill. However, at that time, the two Republican county commissioners were advocating using most of the county's $8.4 million 2012 allotment of impact fee money to eliminate the debt, rather than the current plan of tapping the impact fee money over three years.

Under the current plan, a substantial amount of the $8.4 million allotment can be used to address the impacts of gas drilling on the area, he said.

The 2013 budget includes a plan to spend $1.13 million of the $8.4 million allotment, including $740,210 to help operate the jail, $250,000 to house excess Bradford County inmates in other counties' jails, and $32,318 to hire another 911 dispatcher, Sanderson said.

The commissioners will be discussing, after Jan. 1, how to use the rest of $8.4 million impact fee allotment, the commissioners said.

The guaranteed energy savings project (GESP) is now saving the county over $300,000 in reduced utility bills, McLinko said. Because the impact fee is allowing the county to pay off the GESP bond, the more than $300,000 in annual savings, which was originally needed to help pay off the GESP bond, can now be used for other purposes, Sanderson said.

Specifically, the savings in utility bills will be used to pay for increased costs that the county will be facing, such as salary increases for its employees.

The county budget includes a 4.5 percent pay raise for the county's non-union employees. Approximately half of the county's employees are not unionized. The rest, such as corrections officers, probation officers, and certified nursing assistants, are members of unions, and their pay increases are set under union contracts.

Under the budget that passed, no county funds are being spent to offset the state cuts in human services spending for the 2012-13 fiscal year, the commissioners said.

Despite the state cuts, "people in true need" will still be able to get services in the human services area from the county, McLinko said.

At the Nov. 29 Bradford County commissioners' meeting, which occurred the day before the proposed 2013 county budget was put on display for public review, the commissioners said they still needed to cut the budget further before they adopted it.

In fact, later on Nov. 29, the commissioners made close to $1 million in cuts on capital projects that were included in the proposed budget, such as a purchase of a major software package, Miller said.

The capital projects that were eliminated "wasn't anything that had to be done immediately," he said. The commissioners will continue to review the eliminated capital projects to determine if and when they should be carried out, he said.

There are no cuts in staff under the county's 2013 budget, although two county employees who work at Penn State Extension will now be working directly for Penn State Extension, Miller said.

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