There’s difference between bond, TAN
A recent letter to the editor from Lenny Metz included a number of inaccuracies that need corrected.
The first was confusing the $7.2 million 2017 bond with the 2018 Tax Anticipation Note (TAN).
The 2017 bond is borrowing for a number of major capital projects such as upgraded financial accounting software, county building renovations, security upgrades, new election equipment and 911 improvements.
Bond issuances are long-term borrowing and will be repaid over the next 15 years at an average rate of 2.63 percent.
The 2018 TAN (Tax Anticipation Note) allows Blair County to borrow up to $10 million to continue county operations until this year’s real estate tax revenue is received. Real estate taxes are the only source of county tax that Pennsylvania law allows.
The interest rate on this note is 1.76 percent, and it must be repaid before the end of 2018.
The 2017 TAN was originally budgeted for $7 million. Only $4 million was borrowed and paid back in its entirety in 2017.
Tax Anticipation Notes are short-term borrowing functioning similar to a line of credit and are required to be paid back in the calendar year in which they are borrowed.
The writer also criticized the county for funding the pension more than he asserted the tax base allows.
Blair County does not choose the form of pension it offers. Pennsylvania law requires counties to fund a defined benefit pension that regrettably was underfunded for many years by previous county commissioners.
Providing and funding the county pension is not “stupidity” as Metz referred to it.
It is the law.