FOX TWP. - "It turned out to be a fiasco," said Charles Bloam III, tax collector for the City of St. Marys, in describing the realization of Pennsylvania's Act 32 requiring counties to consolidate the collection of earned income tax (EIT) to a single collector.
The recent breakdown of the county's contract with CENTAX, the firm contracted to collect and disburse earned income tax to local municipalities and school districts, has highlighted difficulties associated with the state's Act 32 legislation.
In a special meeting of the Elk County Tax Collection Committee on Monday in Fox Township, chairman Brent Rhoads said $219,000 has yet to be distributed by CENTAX to municipalities and school districts in the county. In addition, Rhoads said with the average annual EIT total for Elk County roughly $1.25 million, several thousand dollars have yet to be accounted for.
The failure of CENTAX to follow through on provisions in the contract, including providing monthly written statements and distributing funds in a timely manner, has led the committee to seek an alternative collector, an announcement made at Monday's meeting of the committee.
Rhoads said the situation with CENTAX was fraught with problems from the beginning, particularly the failure of the company's computer programs and subsequently the electronic payment system.
"It was supposed to be all electronic as far as the employers were concerned and right before the end of April they sent an email out saying, 'We can't do it.' There's been issues, they just handled the transition badly," Rhoads said.
Public backlash against the company peaked when county residents began receiving forms mailed by CENTAX requesting personal information, including Social Security numbers.
Rhoads cited a lack of transparency and communication on the part of CENTAX, adding that the committee was unaware that any such letters were to be issued.
"First of all we, as a county group, didn't know they were sending them out and we started getting them in the mail and people were calling us asking, 'What are these?' There was no explanation with it. It was handled badly, they just sent a form out," Rhoads said.
Bloam said that while CENTAX officially began operations in Elk County on Jan. 1, 2012, they received the contract nearly two years earlier, providing what he said was in his opinion ample time to prepare.
As EIT applies primarily to business owners who withhold the one percent tax from employee wages and submit the sum quarterly, Bloam said the letters should have been sent only to business owners so that "everybody and retired people and deceased people wouldn't have gotten these notices."
Bloam said that while he is not a part of the Elk County Tax Collection Committee, as the tax collector for St. Marys, he has been on the receiving end of many inquiries and complaints surrounding the difficulties with CENTAX.
"If they [state government] would have kept it the way it was, they wouldn't have had all this trouble and my phone just rings off the hook with all these problems and I don't have anything to do with it," Bloam said.
Pick up a copy of the Thursday, July 12, 2012 edition of The Ridgway Record for more.