Tax collection changes present opportunities for cost savings
During last year's campaign, Barack Obama promised that his administration would comb the federal budget line by line. He vowed to eliminate programs that do not work and that cannot be cost justified.
President Obama says that taxpayers deserve a government that delivers services with the most efficient use of tax dollars, and that means a careful review of all spending.
That's especially true in this most daunting economic crisis since the Great Depression.
Following the new president's lead, a similar cost analysis should be happening at the state and local levels.
In Butler County, there is evidence of such a cost-focused approach in the county commissioners' plan to review payments to elected tax collectors.
There are two obvious reasons for taking a critical look at the tax collector structure: Tight budgets demand that all spending be justified, and modern technology has made the elected tax collector system, for the most part, obsolete.
By taking a hard look at reducing the compensation for each tax card processed by tax collectors, the commissioners have the opportunity to save taxpayers $150,000 or more a year.
Since tax collector compensation can be changed only once every four years, in order to allow candidates for the elected position to know their expected pay, the potential cost savings is $600,000 or more during the next four-year cycle.
The deadline for setting tax collector compensation for 2010-13 is Feb. 15.
It is appropriate for the commissioners to study the options, and the associated cost savings to taxpayers. Reducing the processing rate to $2.50 per card would be a good place to start.
Eventually, based on how most other tax collection systems work in other parts of the country, tax collection could be centralized in the county treasurer's office.
The trend toward consolidation was advanced at the state level last year, when Gov. Ed Rendell signed Act 32, which consolidated the collection of the earned-income tax from 560 collectors down to just 66 collectors, with districts generally defined by county boundaries.
It was predicted that the move to consolidate collection of earned-income taxes would save much of the $237 million estimated to be lost due to an inefficient collection system.
Across individual counties and school districts throughout the state, the potential savings are smaller, but still significant.
This county's commissioners are right to look at tax collection expenses and efficiencies. The commissioners also are right to consult with the people in county government who know most about the subject. They are Diane Marburger, county treasurer, and Ed Rupert, director of property and revenue.
Marburger said she supports a lowering of the per-card rate. And Rupert did not express an opinion, noting it was up to the three commissioners to render a decision.
However, Rupert did confirm the potential cost savings of lowering the per-card rate and ultimately moving in the direction of centralized tax collection.
While the tax-collection analysis is going on at the county level, taxpayers across the county should be urging their elected representatives on school boards or with their local municipality to look at lowering the cost of collecting taxes.
Given today's technologies and the ability to centralize tax collection, the potential for savings is substantial.
And, if changing the way taxes are collected allows a future tax increase to be avoided or minimized, voters will see clearly the rationale for making changes.