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Unfair tax?

Posted on Wednesday, November 6, 2019 at 2:21 pm

Lancaster County is wringing too much money out of the citizens who pay real property tax while ignoring its ability to tap other sources. It’s unfair to property owners, and it’s time to make a change, county supervisors, Jack Larson and Dr. Robert Westbrook argued at the board meeting last week.

“As it stands now, I believe the manner in which we raise revenue to cover the cost of goods and services places a disproportionate burden on certain taxpayers. Case in point is the real property tax,” said Larson. “The county raises a greater percentage of its local revenue from real property tax than any other localities, city or county, in the Commonwealth. The only exception is Highland County, which now very likely, has a lower percentage than Lancaster County given our roughly 10 percent increase in real property tax effective this year,” he noted.

As of 2017, almost 78 percent of total local taxes in Lancaster came from real estate tax while only 8 percent came from personal property tax. By contrast, in neighboring counties, personal property tax ranges from 13.6 to 17.1 percent, Westbrook told his fellow board members.

He pointed to Lancaster’s tendency to cut other taxes then demand more from property owners.

After the General Assembly passed the Personal Property Relief Act in 1997, also known as the car tax, Lancaster reduced it’s personal property tax from $3.80 to $2.04,  and that rate hasn’t changed since 2007. But Middlesex stayed at $3.50 while Northumberland remained at $3.60. Richmond County increased its rate from $3.50 to $3.75 and Westmoreland went from $2.50 to $3.25.

“We went down, and our neighbors stayed the same or went up,” Westbrook said.

He also called attention the boat tax, or more specifically the lack thereof, noting that it was eliminated after a 2015 meeting. “Consequently, Lancaster County has been without a considerable and significant amount of revenue every year and has chosen to increase the real property tax to make up the shortfall,” said Westbrook.

“I sincerely believe, the marine hub has benefited from no boat tax. And I sincerely believe there is a tax rate that would not hurt that industry but would be more fair to everyone else in the county. And I think we ought to find out what that is,” added Westbrook.

To “responsibly fund the future,” Westbrook and Larson propose finding a fair personal property tax rate that places Lancaster in middle range of  neighboring counties and simultaneously reduces its financial dependence on the real property tax.

Westbrook and Larson stressed that it’s important to act now. “I ask the rest of the board to not only support this effort but also commit, as a goal, to having agreed-upon adjustments in place for setting tax rates in the coming calendar year,” said Larson.

“Now is the time to move ahead and do something about it rather than just at tax time next year say ‘lets look to the real property tax.’ Because the fact of the matter is, we now raise 96.7 percent of revenue from four sources. There are another 14 sources for which we are permitted by law to raise revenues,” Larson told fellow board members.

He admitted some of those taxable categories “have potential which is probably not there,” and as a small rural county, any changes they make may not significantly change the county’s balance. But, “that does not mean that we should not try. Nor should we shy away from it as the process becomes difficult or contentious as it surely will,” he added.

Westbrook and Larson called for a special meeting to discuss fairer tax rates and insisted that it’s very important for the county’s citizens to be part of the discussion, not just silent witnesses. “I don’t want to limit them to five minutes. I want a dialogue,” said Westbrook.

That public work session will be held at 5 pm on November 21, but won’t involve the boat tax.

According Westbrook, the boat tax could be a separate rate from other personal property and needs to be addressed in a separate discussion.

The county’s board agreed to hold another meeting with the now-disbanded boat tax committee and other “relevant parties” to discuss the “proper tax rate, assessment value concept and assessment ratio for boats.” They’re hoping to do so in December but did not set an exact date.