Tax Collector - Real Estate Taxes
401 Lincoln Way East
Chambersburg, PA 17201
Franklin County Area Tax Bureau - Earned Income Taxes/Local Services Tax
443 Stanley Avenue
Chambersburg, PA 17201
The 2022 proposed budget includes a 1 mil or a 3% tax increase set aside only to pay for the renovation of the Borough’s Police Station. Otherwise, there is no necessary tax increase.
Chambersburg rarely raises real estate taxes and generally only for Police Department and Fire Department needs. In 12 of the last 16 years, there was no real estate or Act 511 tax increase. The Borough of Chambersburg did not raise real estate taxes between 2007 and 2013; then, the Council was very conservative in minor increases in 2014, 2016, 2018, and one proposed increase in 2022 as explained.
Chambersburg has not raised the real estate tax rate in most years, in recent history. Others often raise taxes on our taxpayers, such as Franklin County or the Chambersburg Area School District; and that sometimes leads to confusion. In 2014, 2016, 2018, and 2022, the Borough raised the real estate tax rate, but only to fund police and fire services, and in 2018 to begin paying off the 2016 Recreation Bond. Beginning a decade ago, and through 2022, there is a constant theme in our finances: real estate tax increases were rare and only dedicated to funding police and fire services.
In 2020, Town Council repealed the Ambulance Tax. This was in conjunction with the establishment of a new ready-to-serve mandatory Ambulance Fee on all water utility invoices (because water fees are attributed to the property owner or owner’s designee). A Police or Fire fee is specifically prohibited. However, emergency medical services is different. There will be no change to the Ambulance Fee in 2022. The fee, unlike a real estate tax, is broad-based. Utility customers of the Borough will continue to pay this flat fee. Only 76% of the assessed value of properties pay real estate taxes. Whereas, 100% of water customers pay a fee placed on utility invoices. If there was a more broad-based tax available (i.e., a sales tax), that might be a more appropriate tax to fund an emergency service such as our struggling ambulance service. However, that is not a possibility under State Law.
The Ambulance Fee supports the EMS service, but it is clearly not a tax because tax-exempt property owners pay it on their monthly water bills.
The 2016 Recreation Bond paid for capital investment in a number of Recreation Department facilities including new playgrounds, tennis courts, a new roof and windows on the Rec Center, and a new state-of-the-art Aquatic Center. To fund the bond, which is a form of debt like a mortgage, Council at the time imposed a special Recreation Bond Tax on all property owners who are not exempt from real estate taxes. The resulting assets built from the bond were added as community owned assets to the Borough’s balance sheet.
This use of debt to build asset value for the community is a corporate way of funding improvements. Further, dedicating a tax to pay it off is not dissimilar to when a homeowner takes out a mortgage.
In 2022, the budget calls for a new bond (actually two companion bonds) associated with the renovation of the Borough’s 1971/1972 Police Station on S. Second Street. This new debt will be used exclusively for that project, for the replacement of the roof on the old part of City Hall (the 1930s addition) and the roof/historic clock tower on the original part of City Hall (the Market House). Further, a new dedicated tax will be established by the 2022 Budget to pay off that bond. Council has already authorized our architects/engineers, as well as financial professionals, to prepare for the plan codified by this 2022 Budget.
The approved 2021 Budget included completion of design and bidding of the Police Station project as well as securing a temporary police station for their use. This 2022 Budget includes selling the bond, establishing the bond tax, and undertaking the project.
In 12 of the last 16 budget years, the Borough of Chambersburg had not raised local Borough taxes.
The 2022 budget includes a 1 mil tax increase due exclusively to the Police Station project.
Taxes, especially real estate taxes, are paid by a smaller percentage of our citizens and businesses than fees. Under State Law, 24% of the assessed value of all properties inside the Borough are exempt from paying real estate taxes. So only 76% of properties will pay a real estate tax. Whereas, 100% of utility accounts will pay a fee placed on utility invoices.
In Chambersburg, our citizens pay no dedicated Recreation Tax, no dedicated Highway Tax, and no taxes to support any of the Borough’s operations, utilities, or utility support departments other than police and fire. Our taxes are very limited, yet misinformation is abundant on this topic.
Until 2014, the Borough of Chambersburg used exclusively 100% of the real estate taxes collected to support the Chambersburg Police Department. In 2014, Town Council added a small share to support the Chambersburg Fire Department. In 2018, the Borough Manager recommended, and Town Council approved, an increase in the Fire Tax for use by the Fire Department and its emergency medical service as well as an increase in the Police Tax. The 2018 increase in the Fire Tax (½ mil) was reversed out in 2020, in order to shift Ambulance funding from this tax to a broad-based fee on utility invoices. In the 2020 Budget, the Borough Manager recommended repeal of the Ambulance Tax portion of the Fire Tax and Council agreed.
Within the Borough, all the real estate taxes collected are for the Police Department and the support of the Chambersburg Fire Department; none of this revenue is used to support any other department or operation. As of 2022, we will still only use real estate taxes to support police, fire, and to pay off the 2016 Recreation Bond. No real estate tax will pay for any operations of the Borough of Chambersburg other than police and fire. No other department, operation, or employee; not parks or street maintenance or the Borough Manager are paid using real estate taxes.
Of course, there are other types of taxes other than real estate taxes. Currently set at the maximum allowed by State Law, there is no possibility of adjustment. We use the other taxes of the Borough (such as Earned Income Tax and Deed Transfer Tax) to pay for the Highway Department operations, Land Use & Community Development, and the Recreation Department operations. The Sanitation Department is a separate utility (not unlike the Electric, Gas, Water, or Sewer Departments) and they keep the streets clean, free of leaves, and well swept. Highway construction projects are done with Highway Aid grant money, which is a grant from the State created by the sale of Liquid Fuels, and maybe if there is excess balances from prior year revenue. Our Highway Aid grant only pays for construction on Borough owned streets and not much of that at all. Keeping up with all highway maintenance on Borough streets without a dedicated funding source has always been very challenging. Street repair is extremely expensive and Highway Aid is very small.
In the 2021 budget, Town Council decided to spend down the cash reserves of the Borough, not knowing the impact of COVID-19 on future revenues. This turned out to be a wise decision as the Borough weathered the storm well. In fact, we did not finish 2020 in deficit, as we had feared. Furthermore, we do not believe that we will finish 2021 in a bad place either. Therefore, it remains our usual and typical system to deposit excess General Fund revenue into the Capital Fund for street paving expenses in the next year. We hope to make some type of deposit in December 2021 for use in the 2022 Budget. This document makes note of that practice again.
Total assessed value of taxable real estate, inside the Borough, for 2022 is estimated by the Borough to be $211,646,000; up slightly from last year. Therefore, the cash value of 1 mil would equal $211,646. However, when factoring in our average collection rate for any given year, we should expect that same mil to yield $196,831. This difference is a result of the average amount of taxes remitted on time, annually, versus the total that is levied. For a first year tax, like the Police Station Bond Tax, that will be the yield. However, for an older tax with some repayment of past year’s taxes due, the yield will be slightly higher.
Therefore, for budget purposes, 1 mil is equal to on average $216,238 in cash. If one assumes the typical percentage of current year taxpayers will fail to pay their taxes, 1 mil would equal $196,792 in cash. If you assume some old outstanding tax liens from previous years may pay their debts in 2022, 1 mil might equal $216,238 in cash. The value of a mil is therefore not precise.
The Average Single-family Home in Chambersburg will see a cumulative increase of about $22 per year, or $1.83 per month, in real estate taxes, because of the increased value of assessed property, which also increases the assessed value of the Average Single-family Home, and the imposition of the new Police Station Bond Tax.
Of course, most likely, the assessed value of YOUR home did not change, as the County has not undertaken a reassessment of real estate since 1962; the last County in the State to do this required recalculation. No, your value did not change, the average changed due to new construction. Therefore, assuming your assessed value did not change, the imposition of the new Police Station Bond Tax would result in an increase of $17 per year in new taxes or $1.42 per month. This assumes you did not pay early and get the standard discount on your taxes. This also assumes you did not get the full 100% rebate due you on your Federal income taxes (up to $10,000 in State and Local taxes).
Finally, we have heard a growing skepticism that these numbers presented do not represent the actual average real estate tax burden. To that end, let us clarify:
Go to https://gis.franklincountypa.gov/taxparcelviewer/ to check your home. We did it for a home recently bought by the Borough. This year, Town Council approved the purchase of the owner-occupied single-family home at 138 S. Second Street. This home had an assessed value of $9,130.00. Therefore, the annual Borough tax bill would be $273.90 per year before discount. That is significantly below the average single-family home tax bill of $538 per year before discount.
Town Council purchased the Gehr House in 2021 to be incorporated into the Police Station Project site.
In conclusion, the cost of the tax increase for the new Police Station Bond Tax for the average single-family home in Chambersburg will be $17 per year before discount. That is not an exaggeration. In addition, township property owners do not pay property taxes to the Borough of Chambersburg whatsoever.
Chambersburg is the only town in Pennsylvania to have an electric, gas, water, sewer, sanitation, and storm sewer utility.
The 2022 Budget includes a 1 mil tax increase due exclusively to the Police Station project.
If not for the renovation of the Borough Police Station on South Second Street, there would have been no change in taxes proposed for 2022.
This is only the fourth time there has been any Borough tax increase in the last 16 years.
Real Estate Taxes – the Borough of Chambersburg collects four types of property taxes from landowners inside the Borough:
Police Tax 2022 – No change
There is no change in the Police Tax; 100% of this tax goes to support the Police Department.
Fire/Ambulance Tax 2022 – No change
There is no change in the Fire Tax; State Law requires a split of this tax with 2.5 mil for apparatus & 0.5 for firefighting.
Recreation Bond Tax 2022 – No change
Approved in 2016, this tax pays down this specific bond only and does not pay for any of the operations of the Recreation Department. This is the bond that built various Rec. Department community assets.
Police Station Bond Tax 2022 – NEW TAX
Proposed for 2022, this tax pays down this specific bond only and does not pay for any of the operations of the Police Department. Anticipated to rise in 2023 based on interest rates and the project’s final construction.
The average single-family home in the Borough pays $538 in real estate taxes to the Borough per year. Half pay less. This is what the average single-family home inside the Borough actually pays per year before discount. Commercial properties may pay more. Assessed value is not fair market value. Township properties pay no tax to Borough. Visit the Franklin County Tax Assessment Office to learn your property’s assessed value at 272 N. Second Street, Chambersburg, 17201.
Only 17¢ of every $1 paid in real estate taxes will go to the Borough of Chambersburg. The balance, 83¢, will go to support the school district, the county, and the library system. In fact, 66¢ of every dollar goes to the Chambersburg Area School District. They send their own tax bill.
Average burden on a single-family type home inside the Borough of Chambersburg based on assessed value.
The budget and tax rates for the Chambersburg Area School District are set by the independently elected School Board and not the Borough. The Borough has no say in these issues.
The budget and tax rates for Franklin County & the Library are set by the independently elected County Commissioners and not the Borough. The Borough has no say in these issues.
Unless you own property inside the Borough, or have a job inside the Borough, you pay the Borough no taxes. Further, if you just have a job in the Borough you pay only $1 per week to the Borough and nothing else. In fact, almost no township residents contribute any tax money to the Borough. For example, the Sales Tax collected at stores inside the Borough all goes to support others, not the Borough.
The other state mandated taxes are set by law and are not changed year-to-year. They include the Local Services Tax, which is a $1 per week tax on workers inside the Borough; the Earned Income and Wage Tax, which is a set tax on wages earned by those who live inside the Borough; and the Deed Transfer Tax, which is a set tax when property inside the Borough is sold or transferred.
Together, along with fees and fines, these categories make up the only revenues of the Borough. In addition, the Electric Department and the Gas Department make a Payment in Lieu of Gross Receipts Taxes (PILOTs) to the General Fund. If these two departments were private corporations, they would pay taxes to the Commonwealth. As such, they are tax exempt. So instead, they pay their taxes to support your General Fund (police, fire, ambulance, highway, and recreation) activities.
State law prohibits the levy of taxes as a fee on persons (called per capita taxes) so we cannot invoice directly for police and fire services. Instead, the law allows us only to use property as the sole means to determine how much tax to collect. So, if you rent your property, your landlord will pay the real estate tax and it will be reflected in the rent you pay. There is no other system allowed. The Ambulance Club is not a tax or fee; rather, it is more like a service. You provide us a gift and in exchange, we accept assignment from your health insurance company if you need to use the Borough ambulance service.
Although Borough non-exempt real estate owners pay for the police and fire, they do respond to police and fire calls in the townships. State law requires that emergency services respond to all dispatches for health and safety. The Borough’s emergency services will always support our township neighbors regardless of money issues. We also enjoy the support of the various volunteer fire companies from the townships and the Pennsylvania State Police. Mutual aid is a very important principle in public safety.
However, can the Borough afford police officers and fire fighters when the money to pay for them can only come from such a small group of taxpayers? Unfortunately, the statewide system is broken. We can envision nothing but painful tax increases in the future to pay for growing police and fire expenses.
The local townships do not have police departments. They rely on the Pennsylvania State Police. They do not have township employee fire departments. They rely on the generosity of volunteer firefighters. All of the Borough’s local real estate taxes go for these functions. Moreover, while we might wish to not have paid police and fire departments, unfortunately we cannot go back.
Therefore, under the authority of state statutes, the Borough levies the following taxes:
Real Estate Property Tax bills are distributed on or about March 1st of each year. Payment is due at a 2% discount by April 30th, at face value by June 30th, or at a 10% penalty after June 30th of each year. Payment is to be remitted to the Borough's elected Tax Collector - Brenda Hill, 401 Lincoln Way East, Chambersburg, PA 17201. (717) 263-6565.
- Local Services Tax (LST) - Determined by Town Council, and collected by the Franklin County Area Tax Bureau.
The LST is assessed to all individuals working in the Borough, earning over $12,000.00 annually. The purpose of the LST is to assist with funding
for the Borough's emergency services that are available to individuals who spend their work day in the Borough. The LST is withheld and submitted
by the employer, at a uniform rate per pay period, over the course of the calendar year.
For more information regarding the Earned Income & Net Profits Tax and/or Local Services Tax (LST), please contact the Franklin County Area Tax Bureau directly:
443 Stanley Avenue, Chambersburg, PA 17201, (717) 263-5141, www.fcatb.org
2022 Sample Borough Tax Bill