Loopholes are great, especially when they might save some money.
Act 32, implemented at the beginning of 2012, requires that each county consolidate to one tax collector for the collection of Earned Income Tax.
In Warren County, that tax bureau to collect earned income tax is the EIT Collection Committee.
The problem?
Tax collection was consolidated through the Warren County School District well before the act took effect.
The result is that the committee collects taxes that it then immediately forwards to the school district, incurring legal and audit fees along the way.
Alan Kugler with PA Futures, the consultant who works with the Council of Governments, was tasked at the November meeting to explore whether there might be a way to dissolve the committee and allow taxes to go straight to the school district, as they did before.
The answer? Maybe.
Referencing the act at last Wednesday night's COG meeting, Kugler said, "If the county had a merged tax office with one governance body, that would have covered" had the municipalities in the county passed a resolution by July 1, 2009.
"What this is saying," he added, "is if this situation existed, that entity could have been designated the tax collection committee."
Warren County had one governing body for tax collection, but the municipalities did not act to avoid the creation of the new committee.
When talking about the original decision, Arden Knapp, Pleasant Township supervisor who serves on the committee, said, "The question came to the county commissioners if this was going to be a problem and they said no."
"A choice was made not to pursue this section," Kugler concluded.
"This section was never brought to our attention when we met at the courthouse," Knapp added. "I don't know how many other people were in those meetings. (The) county commissioners said this is how it is going to be."
Concern was expressed whether the entire act had been read before that action was taken.
"There is a way to get out of it," Kugler said, emphasizing this was his interpretation of the act and that legal counsel would be needed to examine the issue. He told COG members there appears to be a 90-day window ending Nov. 15, 2013 where the "committee can pass a resolution to withdraw from the provisions" of the act. "I'm wondering whether this readjustment could be used to go back under the section" and revert to the prior way of EIT collection, he added.
"There might be something there where the school district office might have to submit some files to (the state) Department of Community and Economic Development. There's a required...report that has to go to DCED. The school district is already doing that and gives us as a committee a copy of it," Knapp said.
"My reading is that we can circle back," Kugler said.
"It looks like this would have to happen between August 15 and November 15," County Planner Dan Glotz said.
Knapp noted, "It would save us money."