MOUNT CARMEL - A $20,000 reduction in the salary of the Mount Carmel tax collector could cause the current tax collector to not run for re-election this year. If that's the case, and no one is elected to the position, the borough council could appoint a local bank to take on the duties, which would be a first for a municipality in Northumberland County.
On a 4-3 split vote last week, council decided to compensate the tax collector, a position currently held by Christopher Grayson, at a rate of $1.50 for every real estate tax bill, $.25 for every per capita tax bill and $1 for every occupation assessment tax bill - similar to how Mount Carmel Area School District and Northumberland County compensate the tax collector. The change would go into effect Jan. 1, 2014.
The school district pays $1.25 commission on every real estate tax bill and $1 commission on every per capita and occupation assessment tax bill. The county pays $1.50 for every real estate tax bill and $.25 for every per capita and occupation assessment tax bill.
The borough was previously paying Grayson 3.5 percent for every individual real estate, per capita and occupation assessment bill he collects in a year.
However, Grayson said he won't accept the change without a fight.
"They have the right to change it. Would I like to see it stay the same? Yes. I believe what I do is worthwhile for that amount of money," Grayson said Monday.
Special meeting
Grayson, in his second four-year term as tax collector, convinced council to hold a special meeting at 7:30 p.m. Thursday, Jan. 31, where he will present his case against the change.
State law prohibits changing the compensation for tax collectors during their terms, so the opportunity to do so arises once every four years when terms end. Any change to the borough's decision must be passed by Feb. 15.
Borough President Tony Matulewicz, who noted the change was not a reflection of Grayson's performance, said Monday it's a matter of equity and there's really no other place in the borough budget to save money.
In 2012, the borough paid Grayson $19,480.64 for real estate bills, $4,253 for occupational assessment bills and $412.03 for per capita bills. Since there's also 7.65 percent on the real estate bills for Social Security and Medicare that goes to Grayson, the borough's total bill to the tax collector was $25,636.07 in 2012.
Comparatively, the school district compensates Grayson at $5,908.25 and the county compensates him at $6,282.75 - roughly four times less than what the borough pays.
"There's no logical explanation to pay this exorbitant rate for the taxpayers. It's absolute insanity. It's ludicrous not to change it. How can we expect our people to pay four times as much as everyone else?" Matulewicz said.
The Pennsylvania Economy League (PEL) has found many of the compensation methods of tax collectors to be wasteful, and the organization recommends a flat salary rather than a percentage of taxes collected, per-bill charges or other methods.
Wage tax collection statewide has been converted to a new system, under which the number of collectors has been reduced from approximately 560 to just 69, saving more than $200 million a year in collection costs, PEL has found.
PEL recommends the state legislature pass a similar law for property tax collection, setting rates, eliminating redundancy and saving even more money.
Supreme Court concern
If the resolution sticks, Grayson, who is up for re-election this year, might not run again in the primary and general election. He ran unopposed in 2009.
In September, Matulewicz said Susquehanna Bank officials submitted a $4,200 a year proposal to take on the tax collector duties, and they would have been appointed had the solicitor not advised against it.
"The Supreme Court does not like the idea of purposefully eliminating a tax collector," Matulewicz said.
State law prohibits a school district from implementing a lockbox system - where banks collect taxes and the taxing body provides customer service by offering lower pay to motivate tax collectors out of office.
In October, the state Supreme Court sided with tax collectors when Pennridge and Central Bucks school districts reduced their compensation by so much that the collectors were not being adequately compensated for their time.
However, if the position of tax collector is vacant, the borough can implement the lockbox system or deputize another person or entity to perform the duties.
Northumberland County Chief Assessor Al Bressi said the borough has every right to change its compensation rates, but hopes a tax collector, rather than a bank, will fill the position.
If the borough collects its own taxes by appointing a bank, Bressi said the county would also have to collect its own from the borough taxpayers, and the shared cost of bills in relation to postage and paperwork would increase from $2,827 each to $5,620 each.
"We have never had this situation in Northumberland County. No municipalities at the current time collect their own taxes," he said.
Marion Heights once hired an outside tax collecting agency to finish out a six-month period after a tax collector resigned, but Bressi said there has never been a full year without a tax collector.
The county will "wait and see" if Grayson or anyone else is elected to the position, Bressi noted.
Full-time job
Grayson said the pay cut of $20,000 is too much and he deserves the pay he's receiving.
It's a full-time job of 40 hours a week on average, but he also helps anyone who needs assistance during his off hours, he said.
Comparatively, according to information provided by the tax assessor's office, out of 36 tax collectors in Northumberland County, only Shamokin and Sunbury tax collectors have eight-hour days every weekday while the majority of other tax collectors are only available certain days of the week for a short time period, or they are available by appointment only.
His office is located at 50 S. Chestnut St., the same building in which he operates Ye Olde Butcher Shoppe.
In addition to collecting taxes, he must file paperwork for any address change, provide information to lawyers on property transfers and provide tax assistance to family members of residents who pass away, he said.
"There's a lot of work involved. It's an employment position because there is day-to-day work involved that has to be done and done precisely," he said.
Change discussed
The motion to change the format of payment was made and seconded by Councilmen Robert Barrett and Joseph Lapotsky. It passed with Councilman Matelewicz, Barrett, Lapotsky and Clem Plisiewicz voting in favor, but Councilman Gary Hixson Jr., Robert Shirmer and Leroy "Chico" Moser voted against it.
Attempts to reach those three councilmen for comment this week were unsuccessful.
Matulewicz said he was surprised any members of council voted against it because he thought everyone was in agreement when the issue was discussed at previous meetings and workshops.
Grayson said he will attend the meeting next week to discuss the change and provide information in support of not changing the rate.
"I hope I can continue to serve the taxpayers. I enjoy the job, and the taxpayers appreciate having someone who is available the hours I am available," he said.