Scranton Homeowners Have Largest Tax Burden In Lackawanna County This Year
SCRANTON — Veronica Piccolino knows every inch of the modest Pittston Avenue home she inherited from her parents in 1986 — from the maple tree she planted in honor of her late mother to her good-hearted neighbors who shovel her sidewalks.
The 66-year-old Scranton homeowner also knows what it’s like to live in fear of losing her home to high taxes.
“No matter how humble, there’s no place like home,” said Piccolino, who lives on Social Security and struggles to pay rising property tax bills on a fixed income. “I think many people would think ‘Just leave.’ And how am I going to leave when a third of my income goes to taxes and I have a mortgage on the house?”
Piccolino and other Scranton homeowners bear the highest tax burden in Lackawanna County this year, a Sunday Times analysis found.
Chart: Tax Burden for Lackawanna County Residents 2019
A city homeowner earning $24,311 annually, the median earnings in Scranton, spends about $137.65 of every $1,000 in wages on municipal, school and county real estate taxes and local wage taxes. The same city resident pays almost $2,520 a year in property taxes alone, which could amount to more than two months of income for some elderly or low-income residents.
“We’ve seen a tremendous impact as the taxes continue to increase and the income of these older adults does not,” said Lackawanna County Area Agency on Aging Director Jason Kavulich, noting the average monthly income of those served by the agency is about $1,010. “Our system was designed to help the neediest of the needy ... but, in our area, the (number of) needy continues to increase.”
To show how taxes affect residents throughout the county, especially as a share of their annual income, the newspaper analyzed tax rates, median assessed property values and other factors to calculate the tax burden in each of the county’s 40 municipalities. School property taxes continue to make up the bulk of the total property taxes residents in every borough, township and city in Lackawanna County pay, the newspaper found.
Among the newspaper’s findings:
Clifton Twp. residents bear the second-highest tax burden in the county. A Clifton Twp. resident earning $29,474 annually, the median annual earnings for workers there, spends about $112.07 of every $1,000 earned on local taxes.
While Clifton’s municipal tax rate is relatively low at 6 mills, total tax burden heavily relies on residential property assessment and median earnings figures. The township has the seventh-highest median assessed home values in the county, but has the sixth-lowest median earnings, which helps explain why the tax burden there is so high.
In last year’s analysis, the newspaper found that Clifton residents had the largest tax burden in the county, but the township’s median assessed home values fell by almost $5,000 between 2014, the most recent data available in last year’s analysis, and 2019. That change pushed Scranton back into the top spot.
Carbondale Twp. residents enjoy the lowest tax burden in the county. A township resident earning a median annual wage of $36,920 spends just $40.23 of every $1,000 in wages on local taxes.
After Scranton and Clifton Twp., the next 12 municipalities with the highest tax burdens are either in the Abingtons or the North Pocono region. They are, from highest to lowest tax burden: Clarks Green, South Abington Twp., Roaring Brook Twp., Newton Twp., Clarks Summit, Jefferson Twp., Moscow, Dalton, West Abington Twp., Covington Twp., Madison Twp. and Waverly Twp.
The growing tax burden concerns many homeowners.
Minnie Mead, 93, has lived in her Blutcher Avenue home in Scranton since the 1950s, and takes pride in the fact that she pays her taxes and fees. Besides Social Security and a small pension, Mead receives some revenue from a reverse mortgage, but that’s set to run out in about 20 months.
It causes a lot of anxiety, she said, especially if you are someone who cares about paying your bills.
While the reverse mortgage allows Mead to remain in her East Mountain home for now, she isn’t sure what she will do when that revenue dries up.
“I think what gets me is that I don’t really have enough money to go live in a nice assisted-living (facility),” she said. “As of now, the thought is to keep this house, depending on what kind of help I can get.”
School taxes rising
Lackawanna County property taxes held steady this year for the sixth year in a row, and none of the county’s municipalities raised taxes. The only change in municipal taxes was in Clarks Summit, where officials reduced the tax rate by 2 mills.
School taxes, however, rose in all 12 districts that serve Lackawanna County residents.
County residents living in the Forest City Regional School District were the only ones to see any relief, as taxes in the Lackawanna County part of the district decreased by 1.8% despite rising by 5.6% in the Susquehanna County parts of the district and 0.36% in the Wayne County parts.
The other increases, approved in June for the 2018-19 school year, are: Abington Heights, 1.44%; Carbondale Area, 3.7%; Dunmore, 3.1%; Lackawanna Trail, 2% in the Lackawanna County part of the district; Lakeland, 1.8%; Mid Valley, 3.2%; North Pocono, 2.5%; Old Forge, 1.6%; Riverside, 3%; and Valley View, 3.12%.
Property taxes in the Scranton School District, which operates on a calendar year budget and is in financial recovery status from the state, increased by 3.6% this year.
School property taxes make up most of the local taxes homeowners in all 40 municipalities pay, the newspaper found.
Of the almost $2,520 in total Scranton real estate taxes on a home assessed at $9,000 — the city’s median assessed value — about $1,198 goes to the school district while about $517 goes to the county and $805 goes to the city.
In Carbondale Twp., a homeowner with a home assessed at the township’s median assessed value of $6,000 pays about $1,116 in total property taxes, with about $688 going to the Carbondale Area School District, $345 to the county and $84 to the township.
School officials often attribute tax hikes to state-mandated costs, such as the rising cost of health care and pension contributions. Scranton school officials also point to a disparity in the state funding Scranton receives compared to similar urban districts as contributing to the $28.6 million deficit the district accumulated over the past five years.
Scranton School Director Greg Popil, the board’s vice president, said he understands how rising school taxes burden homeowners like Piccolino and Mead. More equitable state funding could ultimately allow the district to provide such homeowners property tax relief, he said.
Popil joined about 200 other Scranton board members, teachers, administrators, parents and residents who rallied outside Scranton High School last month demanding the state provide more than the $53.9 million in basic education funding the district would receive under Gov. Tom Wolf’s proposed 2019-20 budget. That amount, Popil said, represents significantly less money per student than similar urban school districts.
“We’re the ones who are taxing the citizens the most, and if you understand this fair funding program you can understand why,” Popil said.
Compared to the $5,402 per pupil that Scranton would receive for its 10,200 students under Wolf’s proposal, York would receive $9,001 for each of its 7,947 students, and Harrisburg would receive $7,408 per pupil for its 7,486 students. Scranton would need an additional $18.9 million a year to achieve the average per-pupil state funding for urban districts, said district officials.
Absent the state providing more funding, Popil said the prospect of property tax relief is “not good.”
“Even worse than the tax situation is what would happen to the educational system,” he said. “I can’t think of any other urban district that’s being mistreated as much as the Scranton School District.”
The Scranton School District is in the most dire financial shape of any district in Northeast Pennsylvania, but other local districts also struggle to manage rising state-mandated costs with insufficient state funding.
From the 2003-04 to 2010-11 school year, Valley View School District paid about $4.49 million in pension contributions but only received about $2.24 million in state reimbursements. That cost skyrocketed to about $22.3 million between 2011-12 and this school year, with the district receiving reimbursements of just $11.2 million, district Business Manager Corey Castellani said.
Based on state projections, district officials forecast Valley View will pay a whopping $49.2 million in pension contributions between 2019-20 and 2026-27, while receiving just about $24.6 million back from the state, Castellani said.
“We’re not like a normal business where we can increase the price of our product,” said Castellani. “We’re trying to provide everything we can for our students, but how many times can we keep going back to taxpayers?”
Rising special education costs also contribute to Valley View’s financial hardships. The district ended the 2017-18 school year with a $1.3 million deficit.
The district’s special education costs hit about $3.3 million in 2010-11, compared to about $5.3 million in 2017-18. During that time, Valley View’s state special education subsidy only increased by about $110,000, from $1.28 million to $1.39 million.
“It’s easy to see that the revenues are not increasing anywhere near the rate that the expenses are increasing every year,” Castellani said.
As state officials and politicians continue to debate how to provide meaningful property tax relief, there are resources available locally to assist struggling homeowners.
Property owners who meet certain income qualifications and live in homes where all residents are over the age of 65 could qualify for a tax deferment program through the Lackawanna County Tax Claim Bureau. The deferrals remain for as long as the homeowner resides there, but taxes transfer to any heir who inherits the property, tax claim bureau Acting Director Joseph Joyce III said.
The nonprofit Neighborworks Northeastern Pennsylvania also offers financial coaching and other programs meant to assist residents and improve homes.
Neighborworks recently installed exterior safety lights, grab bars and other features at Piccolino’s home and is assessing the property for additional health and safety improvements, said Jesse Ergott, the nonprofit’s president and chief executive officer.
While Piccolino appreciates the help, she may have to return to work to pay her tax bills.
“I just know it’s a necessary part of society to pay your taxes,” Piccolino said. “We all have to do our job and to pay them.”
Her fear is that the house in which she raised her children may one day sell at a tax sale for a few thousand dollars, despite her best efforts.
“I pushed, I painted, I put down plywood, I did everything I could in my youth for my home,” she said. “I don’t want to leave. It will hurt me terribly.”
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What’s our method?
To calculate each municipality’s total tax burden, The Sunday Times added a resident’s total wage and property taxes (municipal, school and county), divided that value by the median earnings for workers there, then multiplied by 1,000.
Median earnings are 2017 estimates from the U.S. Census Bureau’s American Community Survey, which is the most recent data available.
Homeowners’ total property taxes were calculated using April 2019 median residential assessed value figures provided by the Lackawanna County Assessor’s Office. The figures show that median residential assessed values in many municipalities fell since 2014, the last year the county provided such data.
The county was unable to provide newer figures for the median assessed value of land and buildings in Scranton, which is the only Lackawanna County municipality that uses separate millages for land and buildings when calculating property tax bills. With the help of the Pennsylvania Economy League, the newspaper derived a single-millage equivalent of 89.94 mills to calculate city taxes.
Scranton Business Administrator David Bulzoni and PEL Executive Director Gerald Cross agreed the single millage equivalent is sufficient for the analysis.
— JEFF HORVATH