City shouldn't forgive penalties, interest for late business taxes
Butler City Council shouldn't opt for an amnesty plan for collecting past-due business-privilege taxes. Instead of waiving interest and penalties, the council should schedule a deadline for settling accounts with the city, whether paying all delinquent amounts in full or arranging a strict payment plan, or face costly collection proceedings.
It would be unfair to businesses that pay their taxes for others to be granted special considerations when they haven't paid.
Beyond that, city residents are justified in asking two questions:
Why has the city government allowed the problem to evolve by failure to pursue overdue taxes?
Why doesn't the city know how much in delinquent business-privilege revenue is owed?
The business-privilege tax rate is $7 per $1,000 of gross receipts.
City taxpayers shouldn't blame Treasurer Ralph D'Antonio. D'Antonio, who took office in January, inherited the business-privilege situation that he is trying to unravel.
But along the way, past and current council members should have been keeping abreast of the status of tax collections. It's now clear that they have been remiss - amazingly, during years when the city supposedly has been scraping for every dollar it can get its hands on.
While the city's budget crisis wouldn't be resolved on the back of 100 percent business-privilege collections plus interest and penalties on overdue accounts, the money would be of immense help.
None of that potential revenue should be written off. There could be costs to the city in the pursuit of the overdue money, but it would not be in the best financial interests of the businesses in question to have those proceedings in progress either.
The city's pursuit of the money could put some businesses that are on shaky financial footing in an even-more-precarious situation; in worst-case scenarios, it could even force a business closing.
However, it is not fair to look the other way in terms of some businesses' lack of compliance while expecting other businesses to carry the load.
The City of Johnstown opted for a one-time, two-month amnesty several years ago that resulted in $265,000 being collected. That was Johnstown's choice, but Butler should not follow in its footsteps.
D'Antonio rightly presented both sides of the collection issue to the council Tuesday evening, and it was clear he was torn in terms of how the city should proceed. The council was right in delaying a decision until at least May, when D'Antonio presumably will know the full scope of what is owed and by whom.
At the May meeting, D'Antonio should make available to the public a list of the delinquent businesses; the total amount owed, including penalties and interest; and the amount of time the taxes have been overdue.
City residents have a right to that information, since they too have tax obligations.
One of Johnstown's justifications for the amnesty was the bad feelings that it averted from those who were delinquent. But in applying the amnesty, the city probably caused many more bad feelings among on-time taxpayers.
Businesses are aware that they have tax obligations. While hard times are a fact of life in the business world, as well as in private households, city operations and city services continue, and their sources of funding must continue, unimpeded by a pay-as-you-please policy.
Unfortunately, by not aggressively pursuing the overdue taxes in question, Butler has allowed a pay-as-you-please scenario to exist for certain businesses, and the city coffers have been coming up empty in terms of that duty to pay.
That must cease.
The council and D'Antonio must attack this issue; they would be derelict now to ignore it. Giving in to delinquents in any way is not the answer, despite the city's need for quick cash.
What the city is owed in taxes, interest and penalties is what the city should be paid - with no exceptions.
- J.R.K.
