Over the past months, Luzerne County has hosted a very healthy debate in which all taxpayers have a stake: Whether the County should collect its own taxes through its own office (in-house) or continue relying upon 69 different elected tax collectors. With the change to Home Rule, new opportunities have emerged for sound fiscal management. The County Council has the once in every four years opportunity to change the method of tax collection, which must be done prior to February 15, 2013. Many reasons exist for utilizing our own county staff for the collection: financial savings, additional revenue, better service hours for taxpayers, and greater accountability. The true shareholders of this new government are the taxpayers, and for the following reasons, in-house collections best serves the taxpayer and the county as a whole:
Smaller Government, less cost: Instead of having the county's financial revenue flow through the hands of 69 different tax collectors, the county would consolidate collection into its already existing office. By consolidating collection, the county saves approximately $268,000 annually and receives the money immediately for cash flow purposes. This immediate injection stops the practice of needing short term loans to simply keep the government afloat until taxes come in.
Greater Accountability: With taxes currently flowing through the hands of 69 different tax collectors, taxes would instead go to one central source, in which all taxes would be processed and tracked through a centralized computer program. Currently, some tax collectors use computer systems of their choosing, and others rely on pad and paper methods. Worse, the county has no enforcement mechanism over elected tax collectors to force them to pay the county promptly on taxes received. However, by bringing tax collection in-house, we create accountability by one uniform processing method.
Revenue Generation: Conservatively, the county would receive an additional $130,000 per year in revenue simply through certifying or making duplicates of its own tax bills. Currently, tax payers charge anywhere from $10-30 dollars for the creation of a duplicate/certified bill (each tax collector chooses his or her own fee). However, by only charging $10, the county can standardize fees across the county and reap an additional $130,000 on top of the $268,000 in savings previously mentioned through consolidating. This results in almost $400,000 year in savings.
Earmarking Savings for Debt Service: Council member Gene Kelleher is a Republican, and I am a Democrat. However we agree that fiscal accountability doesn't belong to one party. We propose that any actual savings realized through in-house collection over the first two to four years would be earmarked specifically toward the County's contingency fund. Once earmarked for contingency, it can be used for debt service and paying down debt at a quicker rate. The savings would not in any way be used to maintain current operations or grow government. It's called a no governmental growth provision.
Better Business practices: Currently, the county does not have any bond rating. However, when agencies review whether a County can get a rating, they look at what best practices have you incorporated. By consolidating tax collection (instead of the County paying a middle man fee as we currently do with tax collectors), we demonstrate fiscal prudency and take one more step toward solvency and an actual credit rating. With a credit rating, we can finally refinance our debt on better terms.
Service: Right now, tax collectors set their own hours. Some work a few days per week, and others only 3 hours per week. However, by going in-house, the taxpayer would have service Monday through Friday for 7.5 hours per day. Furthermore, the county can open up on weekends during critical tax periods (like around discount periods) and use one of its existing satellite offices in Hazleton to reach all parts of the County.
We all like our tax collectors as individuals. They provide a friendly face at times.
However, it's not about the individual, but instead changing the system of tax collection as a whole.
After a century of collecting taxes through elected officials, the county is ready to take control of its own destiny.
James L. Bobeck is a member of Luzerne County Council