Towns due income tax, but how much?
As local governments in Luzerne County prepare their finances for 2013, many are dealing with a problem that has plagued them since the beginning of the year. They are owed income tax money, and it's unclear how much money they have coming.
Some are in this predicament because the Central Tax Agency of Pennsylvania, also known as Centax or the Don Wilkinson Agency, failed to disburse income tax revenue on schedule.
Centax has been out of business since Sept. 21. Calls to its headquarters in Allegheny County and to a local branch were met with a busy signal. The company's old website, centaxgroup.com, now has links to the court order appointing a receiver and a news release. The website also has instructions on what to do if you've received a check from Centax.
The Luzerne County Tax Collection Committee fired Centax earlier this year and hired H.A. Berkheimer to continue tax collection. Berkheimer is also in charge of the backlog of revenue the municipalities are owed.
Berkheimer vice president John DeRemer said the exact amounts still owed are unknown.
"If we could total it up for Luzerne County, we could distribute the money. It still has to be identified to the correct political subdivision," he said. "It's tough to give concrete numbers about how much is due. As we work, it changes."
More than 90 municipalities or school districts are covered by the County Tax Collection Committee, which oversees income tax collection.
Mr. DeRemer said the "low-hanging fruit" of the distributions has been handed out and the company is working on reconciling more problematic accounts. Municipalities should have some of their back-logged revenue and Berkheimer hopes to distribute the "vast majority" of the money by the end of the year, he said.
There is also more than $6 million in a Luzerne County Tax Collection Committee bank account that hasn't been distributed. A sizable part of that money might be reciprocal money, which would be due to other counties.
It's unclear when that money will be reconciled.
Paul Cordaro, an associate with a Pittsburgh law firm that is the court-appointed receiver for Centax's accounts, said forensic accountants are going through that account, but he also said his position doesn't control the money. Mr. DeRemer said that account has money in it, but also said his company doesn't work on it.
Centax was the income tax collector for 12 Pennsylvania counties, according to court documents.
Mr. Cordaro is a member of Campbell and Levine, which was named as the court-appointed receiver of Centax's assets in early November. Green Tree, a Pittsburgh suburb, sued Centax and its bonding company in Allegheny County, saying the company failed to meet its obligations to the borough.
With the appointment of a receiver, Centax's funds were unfrozen. Mr. Cordaro is now in charge of signing off on them before they can be moved elsewhere - sometimes straight to the municipality or school district to which they're due, sometimes to a tax collection company that has taken over income taxes in a county, like Berkheimer in Luzerne County.
A report from Mr. Cordaro completed as part of the receivership shows that many of the accounts his firm took over have moved money along. The report mentions the LCTCC, but doesn't have data on how its account balance has changed since the receivership began.
Though Mr. DeRemer and Mr. Cordaro say they've made substantial progress on getting funds out, officials from some local municipalities say they're still not seeing all the money they're owed and in some cases, their governments have made financial changes.
Contact the writer: bwellock@citizensvoice.com, @CVBillW on Twitter