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
In 12 of the last 17 budget years, the Borough of Chambersburg had not raised local Borough taxes.
The 2023 budget includes a 1 mil tax increase due exclusively to the Police Station project.
The 2023 budget includes a 1 mil tax increase due exclusively to Police Department operations.
The 2023 budget includes a ½ mil tax decrease for the 2016 Recreation Bond Tax.
The total tax increase in this year’s budget is 1.5 mil or a 4.8% tax increase entirely to pay for the Police Station project and funding the operation of the Chambersburg Police Department. None of this increase will be used for any other operation, project, or employees.
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, 2022, and the increase in 2023.
In recent history, in most years Chambersburg has not raised the real estate tax rate. Other entities 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, 2022, and now in 2023, 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 2023, 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In 2020, Town Council repealed the Ambulance Tax.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. Beginning in 2023, there will also be an increase to the monthly Ambulance Fee, which appears on utility bills. The surcharge, unlike a real estate tax, is broad-based. Utility customers of the Borough will continue to pay this flat fee.
The Ambulance Fee will rise from a flat $7.50 per month per water service connection to a flat $9.50 per month per water service connection. This fee supports the EMS service, but it is clearly not a tax because tax-exempt property owners pay it on their monthly water bills.
Only 73.6% of properties pay real estate taxes (as measured by assessed value). 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 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 2021, the Borough refinanced this debt to a lower interest rate. As a result, the annual debt payments dropped and a small tax decrease was possible.
In 2022, Town Council approved 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 was established by the 2022 budget to pay off that bond. Construction is well underway and the renovated and expanded Police Station (as well as the clock tower renovation) will be done in 2023.
The 2022 Budget included selling the bond, establishing the bond tax, and undertaking the project. When the bonds were sold, the interest rate was better than originally estimated. As a result, the tax resulted in a low cost for the debt to finance the project than was in the previous budget.
The project costs and the taxes to pay off the debt are kept separate from the balance of Borough finances, just as was done for the 2016 Recreation Bond, and the ongoing Recreation Bond Tax.
The debt issued by the Borough pays for the Police Station Renovation Project and the Temporary Police Station Project both. The facility on 1540 Orchard Drive is owned by the Chambersburg Area Development Corporation and is rented to the Borough. The Borough has used debt to invest in infrastructure, not to balance the budget, which is considered good debt. “Good debt is investment debt that creates value,” says Eric Gelb, CEO of Gateway Financial Advisors and author of “Getting Started in Asset Allocation.” The latest example is the sale of the 2022 Police Station Bond(s), which will finance the construction of a new Police Station for the town. A dedicated real estate tax liquidates the bond, not to run the Police Department, but to pay for the construction loan and the costs associated with the Temporary Police Station.
Paying a tax for a bond issue, as was decided by Town Council, is not the same as paying a tax for the operation of the Borough. For example, it is a similar difference to opening a mortgage to buy a house or fix the roof, in contrast to using a credit card to pay the telephone bill. Debt should only be used to add asset value. The Police Station Bond Tax, the new tax that started in 2022, is not to pay for any Police Department operations. It will pay off, over years, the debt to build the new Chambersburg Police Station at City Hall and the Temporary Police Station expenses.
These projects will serve the community for generations and this is how in business and industry, this recommended practice grows the value of corporations. With adoption of last year’s budget, Council has now done this twice. First, with the 2016 Recreation Bond and then in 2022 with the 2022 Police Station Bond(s). Staff is committed to not using debt unless it provides asset value to the Borough.
This budget includes the initial planning for another large-scale construction project in the future. Over many years, the Borough has acquired space along Wayne Avenue to someday consolidate and relocate the public works, trash, sewer, water, and fleet operations of the Borough of Chambersburg. That site sits dormant (except for storage) awaiting a plan and approval from Town Council. In 2022, a small office building adjacent to this site, on S. Fourth Street, was renovated to be the field office of the Water & Sewer Department street crew. However, no plans yet exist for the main functions of this public works campus. In this 2023 Budget, there exists money to begin the planning process. The goal is to have a construction plan by 2024 or 2025 for Council to consider, for construction likely in 2026.
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 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 2023, we will still only use real estate taxes to support police, fire, and to pay off the 2016 Recreation Bond and 2022 Police Station Bond(s). 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 administration are paid using real estate taxes.
In addition to the other types of taxes currently set at the maximum allowed by State Law, 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.
What of the Police Tax in 2023?
In our area, Chambersburg is the only municipality with a full service, round the clock, local police department. It is a professional and successful law enforcement organization. In 2016, Town Council appointed a new Police Chief. Ron Camacho joined the Borough in mid-2016; a highly qualified law enforcement professional, he has installed a series of upgrades in the organization and their standard operating procedures since joining Chambersburg. In 2021, Council supplemented the Police Department leadership by adding a Police Inspector to the squad, in addition to the Chief and the Lieutenant. In 2023, it remains very expensive to operate a high performing police department, but unlike our neighbors who have chosen to rely on the Pennsylvania State Police, the Chambersburg Police Department plays a much more proactive role in public safety within the corporate boundaries of the Borough.
Chambersburg remains an incredibly safe community with very low crime rates and the Chambersburg Police spend more time battling disinformation about our community than battling crime. In fact, with their intense crime-prevention and crime-solving tools, a record decrease in crime is the single biggest accomplishment of the Police Department. Many township residents have no idea that they have no local police in their community. I have nothing but respect for the Pennsylvania State Police, but they are not a local police force and they cannot provide the exact same response or services provided by the Chambersburg Police Department to the Borough.
Until 2014, 100% of the real estate taxes collected by the Borough were used exclusively to support the Chambersburg Police Department. In 2014, a small share was added to support the Chambersburg Fire Department. While the Police and Fire tax rate grew in 2018, this remains the sole operational use of real estate taxes. Perhaps this explains why Greene, Guilford, Letterkenny, and Antrim townships have no local real estate tax. The Borough collects almost enough Police Tax to pay for the cost of operating the Police Department. Every dollar of designated revenue from the Police Tax is used wisely by the Police Department.
In 2022, the separate Police Station Bond Tax was added. This tax is not to be used to fund police activities, but rather only to pay off the Police Station Bonds. It was started in 2022 and will be increased in 2023, as was originally planned.
In January 2023, this budget recommends an increase in the Police Tax from 24 mil to 25 mil; the first such increase since January 2018. Overall, since December 2006, the Police Tax rate has risen from 17 mil to 25 mil. When averaged out over the sixteen years, that is a growth rate of a little over 2.4% per year. In 2023, it is the Borough Manager’s recommendation that the Borough change the Police Tax rate from 24 mil to 25 mil.
In 2023, it is estimated that the Chambersburg Police Department will cost $423,510 more to operate than the revenues collected. This includes shifting police pension subsidies from utility departments to help the Police Department as well as the estimated yield of 25 mil of Police Tax. To make the Police Tax cover this gap would have required an additional 2 mil increase, which we are not recommending.
As you can see, in 2022, it is estimated that the Police Department did not cover all their expenses with revenue generated including the Police Tax and the police pension subsidy shift.
If the Police Department runs a deficit, it is commixed with all the revenue and expenditures in the General Fund. The General Fund miscellaneous revenue must cover it as it does with all the General Fund departments including Fire, EMS, the Recreation Department, Land Use & Community Development, and general highway, which are all mixed together pursuant to the State recommended chart of accounts.
Therefore, in 2023, we are anticipating a deficit for the Police Department of $423,510; including a 1 mil increase in the Police Tax. Only in 2020, given controls on spending and a slight increase in tax yield, did the Police Tax generate enough revenue to pay for approximately 100% of the Police Department (when including other police related revenues such as the shift in pension subsidy). As is pointed out in this budget, it will be impossible to avoid future Police Tax rate increases. A deficit is not sustainable.
Please keep in mind that we are operating the Police Department with very little margin for error. Unforeseen costs such as a major detective caseload, a major public safety event, additional unforeseen overtime, additional training, or adding more employees in advance of other future retirements, can easily throw the Police Department budget into a more unstable place.
What of the Fire Tax in 2023?
The Borough once had no Fire Tax. In 2014, a so-called neutral arbitrator imposed upon the Borough and the International Association of Fire Fighters Local #1813 a labor pact (the infamous “Kasher Decision”). Town Council was forced to add a Fire Tax. That tax was set at 2.5 mil and has remained unchanged. In exchange for this tax, and implementing the Kasher Decision, there was relative labor peace for the years following this decision. In fact, twice since then labor negotiations have avoided going back to interest arbitration for a resolution to impasses negotiating new collective bargaining agreements.
In May 2017, the Borough and the International Association of Fire Fighters Local #1813 reached a negotiated labor deal thereby avoiding arbitration. We were able to avoid the cost of arbitration (lawyers, expert witnesses, and the Borough paying 100% of the arbitration panel expenses) by accepting a compromise. The 2017 deal, executed in the form of a Memorandum of Understanding, established a labor contract to fix the wages and benefits between the Borough and our professional firefighters for the years 2017 through 2021.
It was the hope of the 2018 Budget, that sufficient resources to hire and equip part-time and extra full-time firefighters would be offset by an expectation that the revenue that they generate on the ambulance would pay for all their costs. This plan failed mostly because we could not recruit part-time firefighters.
In 2018, the Borough added a small (½ mil) Ambulance Tax to supplement the existing Fire Tax; the maximum permitted by State Law (½ mil). In 2020, Town Council replaced that Ambulance Tax with the Ambulance Fee, a surcharge on water invoices.
Unfortunately, in 2020 the Borough concluded that the Fire Tax was insufficient to pay for the cost of the Fire Department’s ambulance service. There is no legal way to raise it. The Fire Tax cannot exceed 3 mil and the now-repealed Ambulance Tax cannot exceed ½ mil under State Law. In 2020, Town Council repealed the ½ mil Ambulance Tax in its entirety and adopted the Ambulance Fee surcharge on water invoices in its place.
Recently, Town Council and the fire union entered into yet another new labor pact. The goal is to avoid arbitration again and to give up upon the concept that part-time paid firefighters will help support the operation of the department. As a result of the new labor agreement and this change in policy, the Borough is once again at a financial crossroads with respect to funding the Fire Department and its associated basic-lifesaving ambulance service. The cost of these operations, coupled with the inability to collect all ambulance use-fees incurred, and a state-imposed cap on the Fire Tax, has left the Borough in a precarious fiscal position. Meanwhile, the cost of Fire Department operations continues to rise.
There is no change in the Fire Tax for 2023 because an increase is not possible. State law places a limit on the Borough at a very low tax rate for the purpose of paying for the Fire Department. Not that we like taxes, but the 1965 State Law makes no sense. The Borough is prohibited from levying more than 2.5 mil (the 2023 equivalent of about $527,500) in Fire Tax, but it must be used for apparatus/truck expenses and not for firefighters. Further, the Borough is prohibited from levying more than ½ mil (the 2023 equivalent of about $111,000) for all the firefighter wages and benefits. In Chambersburg, firefighter wages and benefits cost the Borough well over $4 million per year. Obviously, this artificial limit in place since 1965 does not envision a mostly paid and experienced professional fire department, as we have here in Chambersburg.
There is no logical or practical alternative and staff is at a loss how to pay for the Fire Department in the future. One alternative is to begin to rent the department to our township neighbors, assuming that their supply of volunteer firefighters disappear. This seems to be a logical assumption.
The long term funding issue of the Chambersburg Fire Department is not identical to the issue of the Chambersburg Police Department. The main difference is that the Fire Department brings in significant revenue. Specifically, the Fire Department is a regional provider of Basic Life Support (BLS) ambulance service inside the Borough and in parts of the surrounding townships. While less than 50% of ambulance invoices are paid (and mostly by insurance), those payments are significant. In addition, the Fire Department acts as the Borough’s Fire Code safety inspection service. Done on a tri-annual basis for most commercial businesses (and annual basis for some types of businesses), this service results in fewer fires or loss of life, and provides some income for the Fire Department.
While the revenue from the ambulance service and the Fire Code safety inspections is not enough to pay for the cost of operating the Fire Department, this and the Fire Tax combined, are counted as a very respectable effort to close the gap in costs. The balance of the Fire Department operating expenses is closed by undesignated General Fund revenue above and beyond the Fire Tax. Every dollar of undesignated revenue used to close the gap between these revenues and the Fire Department budget is one less dollar that can be used for parks or recreation, highways or streets, or other functions such as economic development or new initiatives in community development. In 2023, it is estimated that the Chambersburg Fire Department and EMS will cost $1,323,405 more to operate than the revenues collected. This includes shifting fire pension subsidies from utility departments to help the Fire Department as well as the estimated yield of ½ mil of Fire Tax permitted to be used for operations. There is no way permitted to raise the Fire Tax (approx. 6.3 mil more) to cover this deficit.
The Borough uses the Ambulance Fee to help cover the EMS portion of the deficit. If the Ambulance Fee was used to cover the whole deficit, it would be set to $18.52 per month instead of $9.50 per month as is approved for 2023.
In addition to the Ambulance Fee, if the Fire Department runs a deficit, it is commixed with all the revenue and expenditures in the General Fund. The General Fund miscellaneous revenue must cover it as it does with all the General Fund departments including the Police Department, the Recreation Department, Land Use & Community Development, and general highway, which are all mixed together pursuant to the State recommended chart of accounts.
The world of EMS is in such flux, we do not see any reason to not stay the course and give the process another year to unfold. Many believe the entire EMS system is on the verge of catastrophic failure.
More concerning than our fiscal status, or the delays in finding part time firefighters, is the abject failure of volunteer ambulance companies (and some paid companies) to find employees/volunteers to staff ambulances and answer calls. There is reason to fear that the entire EMS system in Pennsylvania is on the verge of a breakdown. If such a prophecy comes to fruition, Chambersburg would remain in a strong and safe position. As a result of our commitment to professionalism, our use of firefighter personnel and our willingness to use taxes and fees to supplement EMS operations, our community and our citizens are somewhat insulated from, what may turn out to be, a breakdown in emergency medical operations regionally or statewide. This is a very real fear throughout Pennsylvania.
How this may impact us is both in an increased demand for our ambulance(s) to leave the Borough and provide regional mutual aid; and, second, by seeing a need to once again explore with whom the Borough contracts for Advance Life Support (ALS) paramedic services. As you know, the Chambersburg Fire Department provides only Basic Life Support (BLS) services. Last year, for the third time, our partner, Holy Spirit EMS, a division of the Geisinger Health System, which provides ALS paramedic services for the Borough, was sold. Last year the Geisinger Health System merged with the Penn State Hershey Medical System. While that entity operates the Life Lion and University EMS systems, the future of our ALS partnership remains unclear. Life Lion may choose to leave the Chambersburg market.
In 2023, we hope that these relationships, and our partnership, and the other BLS providers in our neighboring communities, all remain strong and stable. We hope, but we are prepared to act, just in case someone falters and we must act to protect the emergency medical systems in Chambersburg. Therefore, while no one wants to pay a new fee to support ambulance services, please understand that such a fee is increasingly important. There are no alternatives. If there is a regional or statewide collapse of the EMS system, it will be Chambersburg and our commitment to funding, which will allow us to protect our residents and businesses. If the system collapses, we are prepared to pick up the slack and spend resources.
In 2023, it is suggested that Town Council support initiatives in Harrisburg to reform and change the EMS system in Pennsylvania. Support reforms that bring resources, clarify billing rules, increase billing options, and force regionalism of ambulance systems. In addition, urge Washington to fix EMS billing rules in Medicaid and Medicare. These rules, debated often by professionals and Congress, are hurting systems throughout our country.
How much does 1 mil of real estate tax yield in 2023?
Total assessed value of taxable real estate, inside the Borough, for 2023 is estimated to be $211,976,053; up slightly from last year. Therefore, the cash value of 1 mil would equal $211,976. However, when factoring in our average collection rate for any given year, we should expect that same mil to yield $197,138. This difference is a result of the average amount of taxes remitted on time, annually, versus the total that is levied.
Therefore, for budget purposes, 1 mil is equal to approximately $211,976 in cash. As explained, if you assume the standard percentage of taxpayers will fail to pay their taxes, 1 mil would equal $197,138 in cash. If you assume some old outstanding tax liens from previous years may pay their debts in 2023, 1 mil might equal $211,976 in cash. The value of a mil is therefore not precise.
The Average Single Family Home in the Borough has a 2022 assessed value of $17,511.12. It will see a total increase of about $38 per year, or $3.17 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 addition of one mil for the Police Station Bond Tax and 1 mil for the Police Tax. Further increases are being reduced due to a reduction of ½ mil of Recreation Bond Tax. Your payment of taxes for your property, rather than the average home, is based on Franklin County’s determination of your home’s assessed value.
Despite the fact that the average home changes every year, the assessed value of YOUR home likely did not change as the County has not undertaken a reassessment of real estate since 1962. We are the last County in the State to do this required recalculation. The average changes year-to-year due to new construction, improvements to properties, and assessment appeals. Therefore, assuming your assessed value did not change, the imposition of the additional 1 mil of Police Station Bond Tax, 1 mil of Police Tax, and the reduction of ½ mil in the Recreation Bond Tax, would result in an increase of $25.50 per year (rather than $38) in new taxes or $2.13 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:
With this 2023 budget, the average single family home in the Borough will see their annual Borough real estate tax bill rise from $536 per year (before discount) to $574 per year (before discount).
Go to https://gis.franklincountypa.gov/taxparcelviewer/ to check your home, your assessed value and your Borough tax bill.
Folks Say that They Pay More Than That in Borough Taxes, But Do They?
Here is the typical single-family home with the average assessed value of the average home in the Borough:
|This house sold in 2020 for $120,000.
However, it has an assessed value of $17,550.
The house next door is the same age and size, but has an assessed value of $15,510. There is no logical explanation.
Regardless, with an assessed value of $17,550 this is the average home in the Borough.
The annual Borough tax bill for this home would be $570.38 for 2023 (before discount). This is a real home and that is their actual tax bill.
Chambersburg is the only town in Pennsylvania to have an electric, gas, water, sewer, sanitation, and storm sewer utility. These utilities are never funded by local tax money.
This budget includes a 1 mil tax increase to help pay for the Police Station project.
This budget includes a 1 mil tax increase to help pay for the operations of the Police Department.
This budget includes a ½ mil tax decrease for the Recreation Bond Tax. The net real estate tax increase to property owners inside the Borough is a 1.5 mil increase.
Real Estate Taxes – the Borough of Chambersburg collects four types of property taxes from landowners inside the Borough. Each year the annual MIL rate is set by Council:
Police Tax 2023 – A 1 mil increase to fund only the operation of the Chambersburg Police Department.
First annual rate increase since 2018; 100% of this tax goes to support the Police Department.
Fire/Ambulance Tax 2023 – 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. The Fire Department collects other fees including inspection fees and the Ambulance Fee.
Recreation Bond Tax 2023 – A ½ mil decrease in this tax, which goes to pay off the Recreation Bond only.
Started 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 facilities. This bond was refinanced by Council in the beginning of 2022 to a lower interest rate; therefore less tax is needed.
Police Station Bond Tax 2023 – A 1 mil increase in this tax, which goes to pay off the Police Station Bond.
Started in 2022, this tax pays down this specific bond only and does not pay for any of the operations of the Police Department. This is the bond that is paying for this project. The forecasted tax rate was lowered from original expectations because the Borough received generous grant assistance and a lower interest rate on debt.
The average single-family home in the Borough will pay $574 per year ($25.50 more than 2022) in real estate taxes to the Borough. Half will pay less.
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:
- 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
2023 Sample Borough Tax Bill