The Altoona Area school board is to vote tonight on a tax collection agreement that has a disputed value to the district and its taxpayers.
Following state law, the collection and processing of the district's earned income tax revenue was turned over to the Blair County Tax Collection Bureau last year.
However, the district chose not to contract with the bureau to collect its $5 per individual, flat rate occupational tax.
"That's their choice," Bureau Executive Director Angela Whetstine said. "We are not pushing to have that collection. We are available should they choose that option."
"Because the Flat Rate Occupation Tax is based on the amount of earned income tax, including this tax on the final return, [it] makes it easy to verify, as well as provide, better taxpayer compliance," Whetstine said.
But for the first time last year, the district sent a flat rate tax form to taxpayers separately from the earned income tax form, which the bureau now sends out.
The result has been confusion and inconvenience for taxpayers, as well as cost to the school district, financial committee chairwoman Sharon Bream said.
She questioned why the district "is being so nasty to taxpayers." She said ceding its flat rate occupational tax collection to the bureau would offer taxpayers more convenience.
Assistant to the Superintendent for Business Kathy Hazenstab said the district should retain its responsibility to collect its flat rate tax because the district's flat rate tax revenue would be received months earlier than if the bureau would collect and process the tax.
Logan Township has sought Altoona Area as its tax collector for the same reason. The tax collection agreement scheduled for a board vote tonight is to collect Logan Township's flat rate occupation tax in addition to its own. Computer software automatically splits the combined tax bills.
Logan Township Manager Tim Brown has said the township is "more comfortable" with the district collecting its taxes than the Blair County Tax Bureau, which was established in 2012 to replace districts' own officials or companies contracted by districts to do the job.
In addition, the township saves a few cents per bill by contracting with Altoona Area. The district charges a 2.6 percent commission per bill compared with a 3 percent commission charged by the bureau.
Hazenstab said the commission is set to be uniform with the agreed commission for other taxes the district collects for the township. Included in the collection agreement to be voted on are business privilege, mercantile and amusement taxes, which the bureau does not yet collect.
Hazenstab said the district charges the township 13 cents per tax bill collected, while it costs 31 cents for the district to mail the tax notice to residents who qualify for the tax. However, she said the revenue the district collects on the back end of the agreement, in delinquent taxes from Logan Township, more than compensates for the cost of postage of the original tax notice, as well as second notices for delinquent payers.
Bream opposes the administration's proposed agreement with Logan Township because it "depends on people not paying their taxes."
"If everyone pays their taxes on time, then the district loses money. Is that fair to taxpayers, to base your revenue on expecting their failure to pay?"
Hazenstab emphasized her belief that it would be unfair to taxpayers if the district were to cede its flat rate occupation tax collection to the bureau. She said the district keeps after delinquent taxpayers to receive their taxes. The bureau, she said, would not put forth that effort.
"It is unfair to taxpayers out there who pay their taxes on time. It's heartwrenching to see. ... There are elderly people who will take an envelope from their junk mail to send their payment to us on time. How fair is it to that person, to not go after delinquent accounts?"
Hazenstab said if the district were to cease collecting the flat rate occupational tax, the number of employees in the tax office would not be changed. She said there have already been staff reductions made.
The bureau collects taxes for 37 taxing bodies. In addition to Earned Income Tax, the bureau collects the Flat Rate Occupation Tax for every taxing body enacting such a tax, except Altoona Area School District and Logan Township.