County Wide Collection of EIT Taxes - get ready to pay more

**WhiteFeather** · June 24th, 2008, 04:47 PM

Got this email, I totally missed this one, because I "mostly" just track firearm and outdoor (sportsmen’s) legislation pending in harrisburg.

Legislators introduce about 5,000 pieces of legislation each session, I can’t read them all and lots legislators don’t read most of them before they vote, scary thought isn't it.

It’s one of Main reason why contacting and educating Reps on subjects has such a BIG IMPACT on how they vote.

We don’t need fewer legislators, we a NEED PART TIME legislator's

This is something on the county collection of EIT. You may want to get an email to your legislator.

To All

The senate passed SB1063 and it is now on fast track in the house. I just got word that it is being considered as I write this and it will be voted on either tuesday June 23 or Wednesday June 24 so you have to act fast.

This bill establishes for the County Wide collection of your Earned Income Tax. That is the 1% you pay to the city and school district. It establishes as commission that has the power to incur debt (that means pay themselves and employees). This debt will be paid out of the proceeds of the taxes they collect. This, in my opinion is the precurrsor to a county wide EIT, that means a county income tax.

The Municipality of Murrysville has voted against this legislation and drafted letters to our two state representatives stating same. I drafted a letter as a Murrysville resident and sent same to the legislators. I have attached a copy of my letter to serve as a template so you can email your state rep if you feel like I do. There is no time to send a letter. Either call him tommorrow or email him ASAP

D.P.

I HAVE ATTACHED MY LETTER. IT IS WRITTEN FROM THE STANDPOINT OF A MURRYSVILLE RESIDENT, BUT APPLIES TO YOUR LOCALITY AS WELL. DO NOT JUST FORWARD THIS LETTER AS AN EMAIL AS IT WILL SOUND SILLY.

REWORK IT AND FORWARD IT TO YOUR STATE REP. AS SOON AS POSSIBLE

Dear Representative

You are presently debating SB 1063, a bill providing for the counties of Pennsylvania to collect the Earned Income Tax on behalf of the local tax jurisdiction within the respective counties.

The supporters of this legislation claim:

· It will relieve business owners of a burdensome accounting chore of sending tax withholdings to multiple tax jurisdictions.

· That it will result in the elimination of duplication of services by consolidating the various EIT tax collection systems into 69, one for each county and four for Allegheny County with Philadelphia County being exempted. Supposedly the resulting economies of scale will result in a savings to the local governments.

These assertions are simply not true. If enacted the collection of taxes and distribution of funds will be less efficient, and neither small local nor large scale industrial businesses will save any money.

This legislation wrongly assumes that there is an accurate method of identifying an individual’s local government tax jurisdiction. Both the Pennsylvania Department of Revenue and the Pennsylvania Department of Transportation routinely misidentify the residency of taxpayers by incorrectly relying on zip-code information. There have even been cases where the Department of Revenue has changed the residency code on individual state income tax returns to comport with their use of the zip codes thereby putting the individual in the wrong local tax jurisdiction.

I live in Murrysville Pennsylvania and we have 5 distinct zip codes for people that are Murrysville residents. There are very few if any postal codes that cover a single local government entity. Each local government will have to establish an auditing procedure to ensure that they are getting all of the EIT monies due them. This job was done by the local tax collector (either elected or hired) and will still have to be done when the County EIT Commission is established.

Instead of eliminating the bureaucracy, this legislation establishes another level. If passed, there will be 69 new Tax Commissions that have the power to keep the EIT money and to incur debt. This has to be paid from somewhere and it will be by skimming proceeds of the local EIT. Murrysville relies on the continuous flow of EIT revenue to avoid tax anticipation loans. If the Commission keeps the money and invests it, as SB-1063 allows, this monthly flow of revenue will be interrupted and my community will have to resort to tax anticipation borrowing.

Quite frankly, Pennsylvania has a horrible record of establishing efficient well performing Commissions. You need only look at the Port Authority of Allegheny County; The Gaming Commission (the highest paid in the Country); And Philadelphia’s public transportation authority. The governor even wants to privatize the turnpike, is it because of their stellar financial management skills?

What happens when a taxpayer’s EIT monies are misdirected to the wrong tax jurisdiction either by an employer, or the County Commission? Who is liable for the tax not paid to that taxpayers community? Murrysville has changed tax collectors several times to improve performance and reduce costs. Competitive bidding has kept our costs reasonable and when the tax collector didn’t perform to expectations or within costs, they were replaced. How will this be accomplished with the new County Commission system? When residents have complaint the present law allows taxpayers to have a hearing by locally appointed officials locally. Murrysville even has evening hours. Will the new system be as accommodating?

There are too many unanswered questions for this bill to become law. Please vote against SB-1063

An Act amending the act of December 31, 1965 (P.L.1257, No.511), known as The Local Tax Enabling Act, in local tax, further providing for definitions, for delegation of tax powers and restrictions, for recapture of tax, for payroll tax, for nonresident sports facility usage fees, for vacation of tax ordinances and resolutions, for advertising tax ordinances, for second class city tax rates, for taxpayer appeals, for filing ordinances, for limitation on tax rates, for withholding of local services taxes, for administrative personnel and joint agreements, for audits of earned income and other taxes, for payment of tax to other taxing authorities as credits or deductions, for personal property, for assessment limitations and for tax limitations; providing for legal representation, for restricted use, for consolidated collection of local income taxes, for collection of delinquent taxes and for miscellaneous provisions; further providing for penalties and for repeals; and making editorial changes.

Here is actual text of proposed bill
http://www.legis.state.pa.us/cfdocs/...type=B&BN=1063

**PocketProtector** · June 24th, 2008, 04:52 PM

Change.....Management Two liberal words for raising taxes
Oh....and Hope too !!

**ChamberedRound** · June 24th, 2008, 04:55 PM

Originally Posted by PocketProtector

Change.....Management Two liberal words for raising taxes
Oh....and Hope too !!

Yeah, "hope" we can feed our children tomorrow.

**Siggy** · June 24th, 2008, 05:03 PM

I don't really see where this is a terrible thing. My township has an EIT collector that is surely "paid out of the proceeds of the taxes they collect" and she will hopefully go away if they have a county person perform this role. And with the economies of scale concept, we are better off paying a centralized department in a county instead of many small township people to duplicate efforts all over the place.

You also make the statment "This, in my opinion is the precurrsor to a county wide EIT, that means a county income tax.". What does that mean? The EIT is 1% and will apparently stay at 1% so what is the difference? Township income tax, county income tax, whatever, it is still 1% of my income I have to pay regardless.

Sensible government is smaller government and that's what this appears to be going for. Consolidate the duplicative work being done by government.

Maybe I'm missing something?

**ChamberedRound** · June 24th, 2008, 05:24 PM

Originally Posted by Siggy

I don't really see where this is a terrible thing. My township has an EIT collector that is surely "paid out of the proceeds of the taxes they collect" and she will hopefully go away if they have a county person perform this role. And with the economies of scale concept, we are better off paying a centralized department in a county instead of many small township people to duplicate efforts all over the place.

You also make the statment "This, in my opinion is the precurrsor to a county wide EIT, that means a county income tax.". What does that mean? The EIT is 1% and will apparently stay at 1% so what is the difference? Township income tax, county income tax, whatever, it is still 1% of my income I have to pay regardless.

Sensible government is smaller government and that's what this appears to be going for. Consolidate the duplicative work being done by government.

Maybe I'm missing something?

While this might mean smaller government at the local level, it means more government at the county level, which runs the risk of creating a bureaucracy that will want money to fund itself.

It's difficult for a municipality to create a bureaucracy because they usually don't have enough money to "play with" to do so; they use the money for it's purpose, and hire just enough people to do the job. However, set up a county-wide "administration" which collects all this money and give it the authority to be a debt center, and it will use the incoming EIT money to pay for itself before anything else. If history is any guide, and without any oversight, it will be an over-bloated organization, and there WILL be abuses of the money collected. Those abuses and staffing "overhead" will result in less EIT money actually being used for its intended purpose. The situation is very similar to poorly managed non-profits, which spend a large portion of the money donated to them on themselves instead of the cause they claim to represent. Such mismanagement and abuse will either result in:

- a request from the "authority" to periodically raise the EIT to continue to support the expense of running their "business", OR,

- no change in the EIT, but the institution or increase of county taxes to support said "authority"

In either case, it potentially means mone $$$ out of our pockets. As far as I'm concerned, if it ain't broke, don't fix it. When I hear people compalining about taxes, it's rarely about the EIT.