Carbon tax group convenes
RICK GRANT/SPECIAL TO THE TIMES NEWS Attorney William Schwab, chairman of the new committee to manage collection of earned income taxes in Carbon County.
Delegates from the five Carbon County school districts and 12 of the 23 municipalities met Wednesday night at the Jim Thorpe Area High School to continue the work of establishing a new state-mandated committee to manage the collection of earned income taxes in the county.
The new committee is required under Act 32 of 2008, which changed the way taxes levied against a person's earned income or net profit are collected. The first meeting was called by the county commissioners in October of last year. While a number of subcommittees have met since then, this was the first time delegates have come together this year.
On the agenda was an update from a number of subcommittees, including the Request for Proposal (RFP) subcommittee, the bylaws subcommittee and the administrative subcommittee.
Kenneth Marx of the Panther Valley School District and assistant secretary for the committee presented the report for the RFP subcommittee, which is charged with creating the RFP and the proposed contract for the single county tax collector for earned income tax required by Act 32.
While putting together the RFP is expected to be fairly straightforward, producing the contract for the three-year tax collection contract could cost the committee as much as $4,000. Marx said his committee was looking into finding the appropriate paperwork and was currently going through the material provided by the Pennsylvania Association of School Business Officials (PASBO).
"The tax collection agreement is available on PASBO, but there is a $4,000 fee," Marx said. "So the question is, do we want to draft our own? Where will we get the manpower? The PASBO agreement was the result of 300 man hours of legal work."
Marx said his subcommittee would continue searching for alternatives, including asking various delegates to provide sample contracts from existing relationships with other firms in the county currently collecting earned income tax. Collections by the new collector are expected to commence in 2012.
The bylaw subcommittee report was given by Donna McGarry, treasurer for Palmerton Borough. The original co-chairpersons for the subcommittee were John Finnerty, manager in Kidder Township, and Alan Katz, supervisor in Penn Forest.
Communications problems prevented the subcommittee from getting started until McGarry stepped up to act as chair and organize this month's meeting, which occurred earlier in the week. Attorney William Schwab, who chairs the committee, appointed McGarry chair of the subcommittee at the meeting without dissent from the delegates.
The subcommittee used a set of boilerplate bylaws provided by the state, as well as a copy of the Lehigh County bylaws as a starting point and found only five areas of contention that they decided were worth further discussion. Those five areas were highlighted in a version provided to delegates via e-mail and printed out for those who attended the meeting Wednesday night by subcommittee member Katz, who also serves the committee as assistant treasurer.
The areas flagged for further discussion were (1) the definition of a suitable delegate so that delegates will be residents of the political subdivision they represent on the committee, (2) the definition of a quorum so that it would be a minimum number of both school districts and municipalities and not a minimum number of total delegates, (3) the vote weight per delegate, (4) the officer and agent positions required to serve on the board and (5) the requirement that a solicitor be chosen who does not currently serve a political division within the county.
Currently, the vote weight for delegates is based on a formula that is based on a combination of the amount of revenue the represented taxing entity collects and that taxing entity's population, in proportion to the revenues collected and populations of all represented entities.
For example, Jim Thorpe Borough has an earned income tax revenue of $441,980 and has 4,804 residents. That means, based on those two factors, the town's weighted vote is 4.33 percent. The weighted vote system was created by the state Department of Community and Economic Development (DCED).
Under a proposal advanced by Katz, the school districts would have 50 percent of the vote, split equally between the five districts and the municipalities would split the other 50 percent.
Paul Montemuro, supervisor chairman in Penn Forest and alternate for Katz, appeared in his stead at the meeting on Wednesday and was clearly in favor of the proposed vote weight. So was Gerard E. Grega, vice chairman of the committee and delegate of Weatherly Area School District, the county's smallest district.
Grega pointed out that the other four school districts together control 46 percent of the vote under the DCED's system. He further argued that smaller municipalities wouldn't see the value in participating because their vote weight wouldn't be high enough to impact decision making.
"I want to see everyone have an equal vote," Grega said. "If you're a delegate you get 1/28th of the total vote, not like me getting 3 percent because I'm a little guy."
Divided equally among all 28 political divisions, each delegate would control about 3.6 percent of the total vote.
McGarry provided a counterpoint.
"I understand the school districts' concerns. We have a large financial concern about our earned income tax collection and we want to have a big vote," said McGarry.
Earned income tax can account for up to 50 percent of the revenues the schools receive from residents in their district.
Schwab suggested that the subcommittee continue to work on the bylaws and present the pros and cons of the proposed changes to the committee as a whole at its next meeting on Wednesday, Feb. 17. He suggested that a non-binding straw vote of the delegates could provide some direction for the bylaws subcommittee.
"How else are you going to get final direction on all of the items?," Schwab said. "If everyone agrees with the change on page two but not with the one on page three, the only thing you're going to know (in the event the bylaws aren't passed) is that the changes were turned down, rather than what was the problem."
As for choosing a solicitor that was not already representing a political division within the county and who would therefore not have a potential conflict of interest, Schwab pointed out that it was unlikely the committee would find an attorney in the country that was not already so engaged. He said that a search would have to be conducted outside of the county and that would involve additional cost to the committee. Montemuro argued that cost should not be the primary concern on an issue of this importance.
"When I'm going to court, I don't want to hire an attorney that practices part-time and runs a hardware store," he said. "I want to pay the money to get a shark."
Schwab provided the administrative subcommittee report. He admitted that there were serious communication problems among delegates since the committee was formed last October. While he said that responsibility for communication infrastructure did not rest with the chairman, he would have his office set up an e-mail list-serv that could forward e-mail to all members when sent from any delegate's registered e-mail address. He asked all delegates to confirm their e-mail addresses with his office. The new list-serv will be available in about a week.
The Carbon County Tax Collection Committee members include delegates from Jim Thorpe, Kidder Township, Penn Forest Township, East Penn Township, Franklin Township, Lehighton, Mahoning Township, Parryville, Weissport, Bowmanstown, Lower Towamensing Township, Palmerton, Towamensing Township, Lansford, Nesquehoning, Summit Hill, Coaldale, East Side, Lausanne Township, Lehigh Township, Packer Township, and Weatherly; as well as Jim Thorpe, Lehighton, Palmerton, Panther Valley and Weatherly school districts.
More information on Act 32 can be found at www.act32info.com.