Franklin tax collection threatens budget

FRANKLIN — A dip in Franklin's tax collection rate could throw a wrench in the Borough's budget calculations, members of the Borough Council said Tuesday.
According to Councilwoman Dawn Fantasia, a Finance Committee review of the tax collection rate found the figure has steadily dropped through the first three quarters of the year and could drop further in the fourth quarter.
Fantasia said the collection rate stood at 97.99 percent in the first quarter and dipped 0.7 percent to 96.68 percent in the second quarter. A more substantial drop of 3.43 percent occurred in the third quarter, Fantasia said, when the collection rate dropped to 93.25 percent. The third quarter concluded on Aug. 31, she said.
Fantasia said the tax collection rate generally slumps in the fourth quarter around the holidays, meaning a further slide is possible this year.
To meet the borough's 2016 budget projections, Fantasia said the tax collection rate needs to hover around 97 percent.
In addition to affecting the current budget, Mayor Nicholas Giordano said a lower-than-expected tax collection rate would also be reflected in next year's budget in the form of the borough's state-mandated reserve for uncollected taxes. The reserve is to ensure the area schools receive their portion of the borough budget before the borough can spend the money, Giordano said.
“Basically the lower the percentage of collection the higher the reserve for uncollected taxes has to be and that's a non-negotiable figure with the state,” Giordano said. “That will result in levy increases if it's low or it would hold back what would be a potential decrease if it's not right. So, the closer we are to 100 percent the better off we are.”
Fantasia said she was hopeful Borough Administrator Alison McHose will be able to bring her authority to bear on delinquent accounts via collection calls to help raise the collection rate.
McHose said her calls will initially target properties that are still delinquent on their taxes or water and sewer bills from 2015 ahead of the forthcoming Oct. 5 borough tax sale. After those calls are complete, McHose said she would start in on delinquent taxes from this year in hopes of raising the fourth quarter rate.
“If in 2015, you had not paid your property taxes or you were delinquent on water and sewer in 2015, that rolls over and now there will be a tax sale on your property if you don't pay up,” McHose said. “I'm trying to make those calls in advance and hopefully people will come in and we won't have much activity on the 5th.”
The council on Tuesday also said the bridge on Route 631 by Franklin Pond was completed ahead of schedule and is expected to reopen this week.
The Franklin Recreation Committee is also planning to host a Halloween Hullabaloo on Oct. 29 at the Franklin Fireman's Pavilion following the annual parade. The event will include food trucks, beer from the Fire Department and a bon fire, the council said.