Greencastle eliminates a tax unnecessarily

Greencastle Borough Council repealed a tax on Monday night that it didn’t have to. Some people will benefit from the unanimous vote and others won’t.

Charles Eckstine, Harry Foley, Frank Webster Jr., Craig Myers, James Farley, Matt Smith and Wade Burkholder met in a special session Dec. 10 to amend Chapter 185 of the Code of the Borough of Greencastle by repealing Article 1, the Per Capita Tax.

“We thought we had to, but apparently we didn’t,” said assistant borough manager Kenneth Womack Tuesday morning.

He said borough manager Susan Armstrong had talked to a state agency. The Echo Pilot  contacted Barbara Bock, Greencastle tax collector, and Jim Clapper, Franklin County Area Tax Bureau director, for clarification on the necessity of the action.

Council was under the impression it had to cancel the Per Capita Tax, since it adopted the Local Services Tax on Nov. 13. Of the $52 to be levied in 2013 on anyone who works in the borough, Greencastle will keep $47 and Greencastle-Antrim School District will get $5.

Bock collects the local real estate and Per Capita Tax.  The Per Capita Tax is sent out on a separate bill to any resident 18 years of age or older. It is for $15. The borough kept $5 and the school got $10.

Womack expects the repeal to stay in place.

“I’m pretty sure we’ll let it stand. Many municipalities are dropping it because it is a nuisance to collect.”

He estimated Greencastle would lose $12,000 in revenue, but one percent of that went to Bock for her services. She will therefore be out $120 in income. Womack said the Local Services Tax is expected to generate $90,000 in revenue the first year. The money is withheld by the employer at the rate of $1 per week. It will be processed by the Franklin County Area Tax Bureau. That agency’s fee for collection was estimated at $4,500 by Womack.

Clapper acknowledged that the $10 Occupational Privilege Tax all went to the school district, since Greencastle did not levy it. The Occupational Privilege Tax is now classified as the Local Services Tax.

To add to the confusion, Clapper said the tax was originally called Emergency Municipal Services Tax, but was later changed to Local Services Tax (LST). A portion must be dedicated to emergency services.

Whether Greencastle should have dropped the Per Capita Tax, he said, “It’s up to them. Many municipalities are because it is considered a nuisance. But it is unrelated to the LST.”

He noted that Greencastle residents just got a $5 break.

Greencastle’s elimination of the Per Capita Tax will not affect the school district.

“We levy our own Per Capita Tax,” said business manager Jolinda Wilson. “It just shows up on the Greencastle and Antrim Township tax bills, but its purpose is specified.”

She had indicated at the Dec. 6 school board meeting that the district would lose $25,000 because Greencastle adopted the Local Services Tax. It would get only $5 from the new tax, rather than the full $10 from the Occupational Privilege Tax, as well as no revenue from anyone earning less than $12,000 per year, another clause of the Local Services Tax.