Dec 17, 2004 By Paul Sunyak 6 min read

Laurel Highlands School District pays tax collectors a three-quarters-of-1-percent commission for collecting school real estate and per capita taxes, while the adjacent Uniontown Area School District pays them a 3 percent commission for doing the same work. That means for every $100 in school taxes collected, Laurel Highlands pays its tax collectors 75 cents, while Uniontown pays them $3, or four times the Laurel Highlands rate.

The method and rate of paying tax collectors varies considerably by school district in Fayette County. Every four years each of them has the ability to select a method and rate of payment, or to change from whatever method or rate they currently use, but they must take action by Feb. 15 to affect the four-year period that starts in 2006.

The Fayette County commissioners recently voted to change from a 3.5 percent commission rate to a flat fee of $1.50 per real estate tax bill starting in 2006 – a move that lowered county tax collection costs 58 percent. But the county’s action isn’t binding on school districts or municipalities, each of which is free to adopt its own method and rate by Feb. 15.

Albert Gallatin Area School District ditched the commission rate years ago and pays its tax collectors a straight salary for collecting real estate taxes, according to controller Denise Sheetz, with no tax collector earning more than $12,500 per year. However, Sheetz said Albert Gallatin pays a 5 percent commission on its $10 per capita tax.

Connellsville Area School District starting paying its tax collectors a 2 percent commission rate in 2002, after an eight-year period of paying a flat fee of $2.65 per tax bill – a change that business manager Eugene Cunningham said increased the cost of tax collection from $63,000 to $138,000 in the first year.

Brownsville Area School District pays a 3 percent commission on real estate tax collections, but pays a higher 3.5 percent commission on its $10 per capital tax collections, said business manager Michael Huth.

Frazier School District pays a 2 percent commission rate during the discount and face value payment periods, but kicks the rate up to 3 percent for taxes paid during the penalty phase in December, according to business manager Thomas Shetterly.

Change contemplated in two districts

Floyd Geho, the Uniontown school district business manager, said some of his school board members have already requested information regarding tax collection in anticipation of the Feb. 15 deadline for making a change. Geho said Uniontown pays a 3 percent commission on taxes collected at discount and face value, and a 5 percent commission on the relatively small amount collected during the one-month penalty phase.

“Some board members thought that if the county changed its collection rate, it would change for the school district as well. But each of the taxing bodies has to do it on its own,” said Geho. “The interest has been piqued because of all the information in the newspaper and on the talk shows on the radio. We have some board members who are interested in the information and taking a look at this.”

According to figures from Geho’s office that are “95 percent complete” for calendar year 2004, Uniontown school district has paid $177,521 in tax collector commissions on tax collections of $5.75 million. Those numbers, however, don’t include school taxes in the city of Uniontown, which Geho describes as a “totally different animal.”

That’s because the Uniontown Area School District pays one-third of the salary and fringe benefits of city treasurer Susan Maher, and one-half of the salary and fringe benefits for two clerks in her office, which amounted to a total $38,081 in 2004. In exchange for that payment, Maher’s office has collected $2.67 million in school district taxes this year.

In comparison, Uniontown school district has paid Wharton Township tax collector Tina Dennis, who qualifies for the 3 percent commission rate, $67,876 for collecting $2.2 million in school district taxes this year.

Laurel Highlands accounting associate Julie Rogers said that in the 2003-04 fiscal year that ended in June, her school district paid the South Union Township tax collector $44,892 for collecting $5.98 million in school taxes, and paid the North Union Township tax collector $30,660 for collecting $4.08 million.

Huth said the Brownsville Area School District received $2.6 million real estate taxes and $52,000 in per capita taxes in the 2003-04 fiscal year – which translate into tax collector payments of $78,000 and $1,820 at the respective 3 percent and 3.5 percent commission rates.

Cunningham said that Connellsville school district has a similar arrangement to Uniontown school district, when it comes to properties located within Connellsville city. He said his school district shares the personnel cost of the city treasurer and clerk – an expenditure of approximately $20,000 – and in exchange that office collects school taxes on all city property.

For the rest of the Connellsville school district, Cunningham said the cost of collecting taxes has increased steadily since the school board voted to switch from a flat fee to a 2 percent commission rate four years ago. In that time the cost of tax collection has risen from $63,000 to a projected $200,000 for this year, he said.

Back in 2001, when the window for change last opened, Connellsville school administration actually recommended staying with the flat fee rate but increasing it from $2.65 to $3.40, said Cunningham. “But at that point in time, the board decided … they wanted to go to a commission (method instead),” he explained.

Since the change in method the Connellsville school tax collection rate has remained “pretty constant,” said Cunningham. He said his school district collected 88 percent of its billed taxes in 1999-2000, 86 percent in 2000-2001 and in 2001-02, and 87 percent in 2002-03.

“Even though it went to a commission basis (in 2001-2002), the percentage of what was collected didn’t change a lot,” said Cunningham.

Per capital taxes are not part of the Connellsville equation, as that school district eliminated them five or six years ago, said Cunningham, who adds that his school board is contemplating making another change in its tax collector compensation.

“Our last board meeting it was discussed. But there was no action taken by the board at that time. They’re going to talk about it again in January, after reviewing all of the (tax collection) options that they have,” said Cunningham.

Albert Gallatin frugal

Sheetz, the Albert Gallatin controller, said her district’s tax collectors are paid once a month on a salaried basis for collecting real estate taxes. She noted that the tax collectors asked for a raise a while back but the school board turned them down.

In the 2003-2004 fiscal year, Albert Gallatin paid $59,500 paid to tax collectors for collecting real estate taxes worth $4.50 million, and paid them an additional $3,288 for collecting $65,767 in per capita taxes, said Sheetz.

The Albert Gallatin compensation system is exceptionally frugal, paying only $12,500 each to the tax collectors in Georges and German townships, and Masontown Borough. In 2004-2004 those tax collectors respectively handled real estate tax revenue of $1.23 million, $919,000 and $707,199, according to Sheetz.

“We have some (tax collectors) getting $3,000 (Smithfield Borough), some get $5,000 (Point Marion Borough) and some get the $12,500,” said Sheetz. Albert Gallatin’s compensation system also means that tax collectors reap no windfall – and in fact get no raises at all – from any increases in millage rates or assessed values.

Shetterly, the Frazier business manager, said his school district paid tax collectors $77,000, including supplies, for collecting $2.1 million in real estate and per capital taxes in 2003-2004.