News Column

Reed Twp. residents could be spared as Susquenita School Board reconsiders major tax hike

June 20, 2014

By Eric Veronikis, The Patriot-News, Harrisburg, Pa.



June 20--Residents of Reed Township can start breathing a sigh of relief.

The 16 percent real estate tax hike township property owners are staring down should drop threefold as the Susquenita School Board is expected to recast its vote on the tax boost.

Under the original proposal, approved last week, the property tax rate township residents were to pay next school year was based on a faulty number embedded in the $29.4 million budget for the 2014-15 school year that the board adopted June 10. The board expects to re-vote on the budget Thursday.

The incorrect number in the plan stems to a ratio the state calculates for school districts such as Susquenita, where students hail from multiple counties. Most of the students who attend Susquenita live in Perry County. But the district also serves students in Reed Township, Dauphin County.

When a district serves multiple counties, the state Tax Equalization Board determines the real estate tax burden property owners in each county are responsible for each year.

Next school year, the board had determined that 97 percent of Susquenita's budget was to come from the seven Perry County municipalities the district serves, while property owners in sparsely populated Reed Township would cover the roughly remaining 3 percent.

That's up from about 2.49 percent of the budget Reed Township was responsible for last year. And to ensure property owners in the township would cover nearly 3 percent of next year's budget, the board hiked taxes on property owners there by 16 percent, while holding the line on taxes for Perry County residents.

That should change on June 26.

There are only 195 taxable parcels in Reed Township. And a single commercial property sale in 2012 skewed the fair market values in the municipality, which unjustly led to the real estate tax burden to spike.

Reed Township resident Keith Lindsay and district officials recently questioned the increase. And the board has since reviewed its numbers and chose to use a default ratio instead, which is the five-year average of all sales in the municipality, because it better represents the market, said Heidi Havens, spokeswoman for the state Department of Community and Economic Development.

After making the necessary revisions, the state tax board sent the new figure to the state Department of Education for final approval. The total market value for all of Reed Township dropped from roughly $22 million to $19.7 million. And the board determined that township residents should instead be responsible for about 2.7 percent of the district's budget.

Susquenita should get final approval from the Department of Education prior to the school board's meeting on June 26, said Roger Carl, the district's director of financial affairs.

Property owners in Reed Township would see about $30,000 in tax relief, or roughly $150 per household, compared to how much they would have had to pay next year without the planned revisions.

Township property owners would pay about 5 percent more compared to last year's tax bill under the revised plan, Carl said. He said he could not provide an exact millage rate until the new numbers are entered into the Department of Education's calculation software.

But if the township's taxes were to increase by 5 percent as expected, the adopted millage rate would decrease from 22.66 mills to roughly 20.50 mills. That's up from last year's tax rate of 19.53 mills.

At 20.50 mills, a person who owns a property in Reed Township valued at $100,000 would pay about $2,050 in property taxes next year. That's $216 less than they would be expected to pay under the adopted plan that exists today.

The tax rate for the municipalities in the Perry County portion of the school district is expected to remain 12.20 mills, which means a person who owns a house valued at $100,000 would pay $1,220 in real estate taxes next year.

Carl said the average assessed property value in Reed Township is $72,000, which would translate into a tax bill of $1,476 under the expected 2014-15 tax rate. That is about a $70 increase over last school year's tax bill.

The average property assessment in the Perry County portion of the district is $137,000, which would result in a tax bill of $1,671.

IF YOU GO:

--WHAT: Susquenita School Board meeting where the board is expected to adopt a lower tax rate for Reed Township residents.

--WHEN: 6 p.m.June 26.

--WHERE: Susquenita High School, Large Instruction Room, 309 Schoolhouse Road, Penn Township.

___

(c)2014 The Patriot-News (Harrisburg, Pa.)

Visit The Patriot-News (Harrisburg, Pa.) at www.pennlive.com

Distributed by MCT Information Services


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Source: Patriot-News (Harrisburg, PA)


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