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 Borough of Chambersburg did not raise real estate taxes between 2007 and 2013; then there was an increase in 2014, a second increase in 2016, and a third in 2018. 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, and 2018, 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 2020, 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, this budget proposes a small tax decrease, and a shift from an Ambulance Tax to an Ambulance Fee. A fee can be charged for this service under State Law. This is not always true. A Police or Fire fee is specifically prohibited. However, emergency medical services is different. There will be a further explanation of the new proposed fee going forward. However, the fee, unlike a real estate tax, is broadbased. Utility customers of the Borough will pay this new flat Ambulance fee on their utility invoice. Similar to when the State added an E-911 service charge to telephone bills a generation ago.
Taxes, especially real estate taxes, are paid by a smaller percentage of our citizens and businesses than fees. Under State Law, 26.4% of all properties inside the Borough are exempt from paying real estate taxes. So only 73.6% of properties will pay a real estate tax. Whereas, 100% of utility accounts will 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. That is not a possibility under State Law.
No Tax Increase in 2020
This budget includes no tax increase. In fact, it offers a small decrease and shift of funding from a tax to a fee. With respect to taxes, it includes the same basic tax structure as all budgets in the recent past. It maintains the Police Tax, unchanged for a second straight year. It maintains the Fire Tax, unchanged for a second straight year. It maintains the Recreation Bond Tax, unchanged for its third year. Finally, it recommends the repeal of the Ambulance Tax, a small tax, which had provided some emergency medical services funding in prior years.
The entire 2020 Budget is available on the Borough Transparency Page.
Chambersburg real estate taxes remain earmarked only for police and fire operations. No other department or employee is funded through real estate taxes. In fact, the Recreation Bond Tax is specifically for paying off the 2016 Recreation Bond, one can reliably say, “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 for using real estate taxes. The only use of these taxes are police and fire, and to pay off the 2016 Recreation Bond.
In 11 of the last 14 budget years, the Borough of Chambersburg has not raised local Borough taxes.
“Good debt is investment debt that creates value,” says Eric Gelb, CEO of Gateway Financial Advisors and author of “Getting Started in Asset Allocation.”
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. Whether citizens agree with the Town Council or their decision to not hold a referendum in 2016, the basic fact remains, the Recreation Bond Tax, the new tax started in 2018, is not to pay for any Recreation Department operations. It will pay off, over twenty-five years, the debt to build the new Chambersburg Aquatic Center at Memorial Park and other playground and park improvements.
Debt to increase asset value is a smart use of debt, is common in business and industry, and is actually a recommended practice. This new tax and its approval of Council is a decision that was made in 2016. In 2019, it will be year two of the collection of this new Recreation Bond Tax. Otherwise, the collection of the tax and its rate will be unchanged from the initial year, 2018.
For background purposes, in 2016, the Borough Manager and consultant Kevin Post of Counsilman-Hunsacker Aquatics discussed a variety of options for the design of the new Aquatic Center and the financing of the proposed 2016 Recreation Bond. At the Town Council meeting on February 22, 2016, Laura Kurtz from Eckert Seamans, and Financial Advisor John Frey from PFM, advised Town Council that a voter referendum, under the laws of the Commonwealth of Pennsylvania, would be non-binding; but ultimately it was Council’s decision whether to move forward with a bond issue. On May 23, 2016, Town Council authorized the 2016 Recreation Bond sale and approved the new Recreation Bond Tax to begin in 2018.
In Chambersburg, our citizens pay no dedicated Recreation Tax, no dedicated Highway Tax, and no taxes at all to support any of the Borough’s operations, utilities, or utility support departments other than police and fire/EMS. Our taxes are very limited, yet misinformation is abundant on this topic.
Until 2014, 100% of the real estate taxes collected by the Borough of Chambersburg were used exclusively to support the Chambersburg Police Department. In 2014, a small share was added to support the Chambersburg Emergency Services Department. This includes ambulance operations.
In 2018, the Borough Manager recommended, and Town Council approved, an increase in the Fire Tax for use by the Fire Department and its Ambulance operations; as well as an increase in the Police Tax. This small increase (½ mil) is proposed to be reversed out, in order to shift Ambulance funding from this tax to a broad-based fee on utility invoices. In this 2020 Budget, the Borough Manager is recommending no additional changes to taxes or tax rates other than this small decrease.
Within the Borough, all the real estate taxes collected are for the Police Department and the support of the Chambersburg Emergency Services Department; none of this revenue used to support any other department or operation. As of 2020, we will still only use real estate taxes to support police and 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, paid for using real estate taxes.
Of course, there are other types of taxes other than real estate taxes. However, they are set by the State, cannot be adjusted, and are currently 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 normally done with Highway Aid grant money (a grant from the State created by the sale of Liquid Fuels) and maybe if there money is left over from the previous fiscal year. 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.
No Tax Increase in 2020 – In fact, a small tax decrease with elimination of the Ambulance Tax; and shift to an Ambulance Fee
($7 fee per month on each utility invoice of the Borough).
Real Estate Taxes – the Borough of Chambersburg collects three types of property taxes from landowners inside the Borough:
Police Tax 2020 – No change
The proposed budget eliminates the Ambulance Tax in 2020; 100% of this tax goes to support the Fire Department & apparatus.
Fire/Ambulance Tax 2020 – Slightly lower
There is no proposed change in the Police Tax; 100% of this tax goes to support the Police Department.
Recreation Bond Tax 2020 – No change
Approved in 2016, earmarked to pay off the bond only, tax does not pay for any of the operations of the Recreation Department.
Commercial and industrial property owners may pay more real estate tax as tax is based upon the assessed value of property.
Government, educational, nonprofit, and township property owners pay no real estate taxes
The Borough receives no sales tax, liquor taxes, business taxes, or any other local taxes and they are not an option under State law.
Township residents pay no taxes to the Borough other than the Local Services Tax if they work inside the Borough.
The average single family home in the Borough pays $512.92 in real estate taxes to the Borough. Half pay less.
The average house changes every year, but your assessed value generally stays the same. The assessed value of your home is set by Franklin County and the Borough uses that value to determine your property tax bill.
Only specific taxes at specific tax rates are permitted under State Law
Only 16¢ of every $1 paid in real estate taxes will go to the Borough of Chambersburg. The balance, 84¢ 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.
These are the only taxes you pay to the Borough of Chambersburg.
The average single-family homeowner pays $512.92 per year in Borough taxes; half of all homes pay less.
The Council has no say on school taxes, county taxes, or the library tax. Yet, low utility rates help everybody in Chambersburg.
An electric and gas customer inside the Borough system may save as much as $1,000 per year per household for having Borough utilities. Even with the imposition of new Ambulance Fee, utility bill payments save more money per family than is paid in taxes.
The 2020 Budget includes capital projects, street paving, and a bond to finance Water System Improvements and a Public Works Building. The 2020 Budget contains only design expenses towards the future goal of renovating the Police Station in 2021-2022.
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. Also, 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 the police and fire are paid for by Borough non-exempt real estate owners, 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.
But, 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. And 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
2019 Sample Borough Tax Bill