Tax committee seeks dissolution
The Warren County Tax Collection Committee is working towards self-destruction.
At the urging of the Warren County Council of Governments, the committee is looking into whether the individual entities represented by the committee can withdraw from governance by the committee.
It may seem odd, but it’s due to some confusion when the law requiring the formation of the committee was enacted.
When Act 32 of 2008 went into effect in 2012, it required all tax collecting districts that did not have a consolidated tax collection arrangement to form a tax collection committee including members from all political subdivisions that levy an income tax.
While Warren did have such an arrangement, through its consolidated school district, the law required resolutions from a majority of political subdivisions that levy an income tax within the tax collecting district designating the existing agency collecting taxes as the tax committee for the district. The political subdivisions within Warren County did not pass the necessary resolutions prior to a July, 1 2009 deadline.
In other words, the Warren County School District collected taxes, including income, across the county. The municipalities with an income tax needed to take action before July 2009 to designate the district as the tax collection committee. They failed to do so and were required by the law to form a consolidated county tax collection agency as a result. That agency now functions as an unnecessary middle man in the tax collection process, as it immediately forwards all taxes collected to the school district anyway.
“The question came to the county commissioners if this was going to be a problem and they said no,” current Tax Committee Chairman Arden Knapp said at COG’s December meeting. “This section was never brought to our attention when we met at the courthouse,”
The committee incurs costs above what having the district handle agency duties would as it is required to hire an accounting firm to perform an audit each year, which the district also has to do as it collects property taxes, and it incurs additional legal fees.
There is still hope.
A section of the new law provides the opportunity for entities to withdraw from the governance of the newly-formed committees if a majority of those entities pass a resolution expressing a wish to withdraw within a 90-day period ending Nov. 15, 2013 or within the same period once every four years after 2013.
So, if a majority of the groups governed by the tax committee pass resolutions to withdraw between Aug. 18 and Nov. 15 of this year, the committee is dissolved.
The law isn’t that clear-cut however.
Under the law, if such a withdrawal occurs, a new tax collection committee must be established. Whether that means the school district could be designated as that committee is a point of confusion.
The current tax committee approved a motion to have Committee Solicitor Cynthia Klenowski research the language of the law and give a written report of her legal opinion on the matter.
“The whole ball of wax of it is that if we can opt out of it, it’ll save us all money,” Knapp said. “I guess if we go over budget, they’ll (COG members) just have to kick in more since they want it.”
The committee has a legal budget of $2,250 for the upcoming year.
Even if Klenowski fails to find a way for the municipalities to withdraw after the fact, there’s a last avenue for possible exemption open.
State Rep. Kathy Rapp has expressed a willingness to work with those under the purview of the tax committee to get Act 32 amended to exclude the county.
“I think if it really came to the point of writing legislation to alter Act 32,” current Tax Committee Secretary Tia Drescher said, “we’d really need to take a roll call of the school district, the city and the municipalities to see if a majority agrees on this.”