An unknown amount of 2012 earned income taxes for Lackawanna County residents who commute to Luzerne County has not been distributed, members of the Lackawanna County Tax Collection Committee said.
The committee is considering a claim against a performance bond of Centax Group to recoup money not distributed to Lackawanna County municipalities.
"Since they have not come through, we have put their bond company, Travelers Insurance, on notice that we are seeking a claim for our lost monies," said Mayfield Mayor Al Chelik, the Lakeland School District delegate to the tax collection committee.
"We don't know how much money is missing," Mr. Chelik said.
Since Jan. 1, when each of Pennsylvania's counties, excluding Philadelphia, consolidated their tax-collection efforts under Act 32 into one agency per county, Centax has experienced trouble with its efforts in collecting and distributing earned income taxes.
In Luzerne County, where Centax is used, a budget crisis has erupted as municipalities and school districts did not receive much of the earned income taxes they had budgeted. Wilkes-Barre officials said last week the city was short $1.2 million in earned income tax owed by Centax.
"There was some sort of deficiency in their procedures and/or their tools they needed to administer the tax," said Lackawanna County Tax Collection Committee Chairman William Lazor. "As a result, they were unable to remit the taxes that were collected as they were supposed to do under Act 32."
Lackawanna County chose Berkheimer to collect taxes. But for Lackawanna County residents who work in Luzerne County, Centax is responsible to remit wage taxes to the municipalities and school districts where those residents live.
"I believe that funds would have been withheld and remitted to Centax, and it is those funds which are due to the Lackawanna County taxing districts which I believe had not yet been disbursed," Mr. Lazor said.
If filed, the tax committee's claim would be only for money not received by municipalities and school districts since Act 32 was implemented, as that is the time frame over which the tax collection committee has authority.
Several school districts and municipalities in Lackawanna County were reached for comment last week, but most couldn't say how much tax money was owed through Centax.
Jessup, however, said it was filing claims for up to $6,000 worth of missing money from previous years. Jessup had used Centax for 35 years before Act 32.
In Susquehanna County, Forest City used Centax under Act 32. However, the borough had difficulty in the first quarter of the year with the company, borough clerk Sharon Vannan said. The company was not returning calls or sending payments to the borough. The borough switched to Berkheimer after the first quarter and has been spared most of the problems that developed in Luzerne County.
Efforts to reach representatives for Centax were unsuccessful.
REBEKAH BROWN and KATIE SULLIVAN, staff writers, contributed to this report
Contact the writer: jkohut@timesshamrock.com, @jkohutTT on Twitter