Unity: Is seniors' tax cut possible?
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Unity supervisors plan to ask the township solicitor tonight to look for ways to give senior citizens a break on property taxes.
"The three supervisors are in agreement. We want to look into this," said Michael O'Barto, chairman of the board.
"And we want to hear from others in the township, too," he said. "We want to appoint a citizens advisory panel made up of working taxpayers as well as seniors."
Mr. O'Barto, 54, said the issue of exempting seniors from property taxes was discussed a few years ago, but a recent letter from an elderly couple in the township made him want to investigate it further.
"We received a letter from a township woman in her 80s, Lorraine Roth, and she told us of her rising costs for medicine and food," he said. "Her husband George is 92, and they are on a fixed income. Then she said we probably didn't care, though, and would laugh about their problems.
"We do care," he said. "And I know some people are living on Social Security alone, and it's not easy."
He said he has seen senior citizens come into the township office to ask if they could pay their property taxes after the beginning of the year because they've spent their money on medicine and food.
He said gasoline prices go up, food prices go up, Greater Latrobe School District taxes keep going up but many seniors' incomes don't keep up with rising costs and taxes.
The state and school districts have wrestled with ways to lower the property tax burden in recent years.
Some school districts allow seniors to volunteer in lieu of paying a portion of their property taxes.
New Kensington-Arnold School District has such a program, called Seniors Earning Rebates Volunteering In Schools, or SERVIS.
Senior citizens age 65 or older who own property can receive a rebate of up to $500 from their school taxes by volunteering for up to 100 hours of service in the schools. Volunteers receive a $5 credit for each hour of tutoring, assisting a teacher or working in a library or office.
The state Legislature approved casino gambling several years ago and sends some of the tax revenue on casinos to school districts to lower property taxes. School districts receive different amounts from the state based on their wealth, but all property owners in a specific district receive the same homestead exemption.
The state also refunds up to $650 a year in rent or property taxes for lower-income seniors.
The average property assessment in Unity is $22,000 and the tax rate is 3.2 mills, so the average property owner pays $70 annually in township taxes.
"We want to begin a debate," Mr. O'Barto said. "I wish the state Legislature would seriously discuss it, too."
He noted there are bills in the state House and Senate to shift the local property tax burden to a sales tax and income tax. A House committee held a hearing in August to gather information.
"We need to discuss whether there aren't ways to alleviate taxes for some seniors," Mr. O'Barto said.
"I can't do anything about the school taxes or the county taxes, and our taxes are only about 3 percent of the total property tax bill for residents, but we have to start somewhere, whether it's a savings of $2, $20 or $60."
The school district tax rate is 76 mills and is the largest property tax bill of the three taxing bodies. The county tax rate is 21 mills.
"State funds have been cut back to school districts and libraries," he said, "and so school taxes keep going up."
Since news of the supervisors' proposed resolution surfaced last week, Mr. O'Barto said he has heard from a number of residents.
"Some have called to say it's about time someone did this," he said. "Another person called to say seniors like Arnold Palmer don't need a tax break. And some seniors say give their kids and their families the tax break."
Mr. O'Barto said their solicitor's preliminary opinion is that giving seniors a tax break is legal, but they may not be able to enact an exemption that applies only to low-income seniors.
He noted the state constitution calls for taxpayers to be treated uniformly. That provision prevents the state from passing a graduated income tax -- a higher tax rate for higher incomes -- like the federal income tax. All state residents pay the same 3.07 percent income tax.
Mr. O'Barto, however, said the township may be able to rebate seniors' property taxes, as the state does with its Rent and Property Tax Rebate program for residents with incomes up to $35,000. And the township will investigate a homestead exemption, which school districts in the state have used to lower property taxes after receiving gambling revenues.
Unity has an annual budget of $5.2 million.
The property tax brings in about $900,000 a year in revenue, he said.
Based on U.S. Census figures, he said, about one-third of all heads of households in the township may be 65 or older. But some of those seniors are renters and wouldn't pay property taxes.
An earned income tax, of 0.5 percent, brings in about $2 million a year for the township, and the rest of the township revenue comes from fees.
The township has some newer housing plans that contain large houses, but it also has some older coal towns with lower-priced homes.
"We have some new, larger homes with people who work in Pittsburgh and others who work for large corporations," he said. "Kenametal is a big employer in the township."
Unity officials have some new sources of revenue that could replace some property tax revenue.
This year was the first year the township instituted a local services tax -- a $52 annual tax on people working in the township, and he said it brings in $400,000.
In addition, the township expects $65,000 in December from the new state tax on Marcellus Shale natural gas wells. The township doesn't have any wells yet, but expects to have some in the future, which would bring in more revenue.
The second-class township encompasses 69 square miles and has 150 miles of roads to maintain.
"We have a 16-person road crew and a lot of snow removal equipment," Mr. O'Barto said.
Unity has eight other township employees.
One mill of the township's 3 mills of property tax goes to its eight volunteer fire companies.
The township has no local police force, so it is covered by the state police.
Supervisors will investigate the impact of the lost property tax revenue if seniors get a tax break.
"I don't want to cut back on services," Mr. O'Barto said.
Mr. O'Barto asked any residents interested in serving on the advisory panel to contact township officials.
"I want to know what people want," he said. "I think we need to talk about it."
First Published September 13, 2012 4:48 am