Homeowners faced with massive real estate tax hike

Scranton pays up owed income plus interest to city employees

City employees in Scranton who earlier this month saw their pay slashed to paid minimum wage over a dispute between city leaders will soon get the money owed them, plus interest.

Last Friday, the mayor and city council, all of whom are Democrats, reached agreement on a financial recovery plan that among other things calls for a minimum 33 percent increase in real estate taxes. Pending state approval, the plan paves the way for Scranton to almost immediately receive more than $2 million through in a state loan and a grant.

Read more:

www.foxnews.com...


Well, isn't that all well and good for those on the government payroll, but I hope people notice, this is a glimpse of what is coming. Deficits reaching trillions of dollars each year, no talk of decreasing entitlements, bailouts for too big to fails - there is only one source of revenue left. The average person just trying to get by.

Just think, the total tax rate during the American Revolution was 2%.

reply to post by MidnightTide


To put this in perspective from the real estate angle, the average taxes on a $250,000 home in Scranton is $540.00 a month. This is taxes alone, this doesn't include what a person pays for their mortgage. A 33% increase on that is roughly $180.00, putting the new tax bill at $720.00. If were a homeowner, I'd look into whether a municipality can legally raise property taxes without an assessment being done first. Especially if the homeowner owns the property outright.

I'm not going to go into minute details here, but a blind man can see that what the city of Scranton is doing is prolonging the inevitable. Robbing Peter to pay Paul is simply a transfer of debt. It doesn't get rid of the debt, and if Scranton wants to get out of debt it has to cut it's budget. Any business owner knows this but, since the city isn't your typical business, you can't cut the pay of workers, no matter how creative you get with the methods, and not pay legal consequences for it. There are contracts and unions to deal with.

Remember what Detroit did? Shut off some of the city street lights to save on their utility bill to help balance their budget? Scranton needs to cut the deadwood out of the picture, and that doesn't mean the employees who help the town function. That's just idiotic.

No wonder they're in debt, they don't make very sound business decisions.

I wonder how many management types in Scranton city Gov't are running 6 figures and higher and how many really work as hard as they really could, in terms of combining some of those high dollar manager positions every city seems to have.

Hmm.. How many of them are on generous pensions and how generous? Bell, California should have been a wake up for all on wondering and looking deeper when the whole city seems to be falling apart for finances. Just my opinion.

In my state an increase is capped at 10% if no improvements have been made. Guess PA doesn't have a low cap.

ETA: I just occurred to me the cap is on appraisal. The rate can be set to what those in charge desire, To large and the might not get reelected.

I am from that area and my parents still live there. This is a long and complicated mess. The property assessments in PA are not re done every year. Most of the counties have not been done since the 60's, everything is way out of whack and people have been paying unbelievably low property taxes for years and now are getting hit with these real time assessments that are shocking to them. Talk about a screwed up system. No wonder the towns are gong broke.

As far as salaries...I would have to look that up...I would be surprised if there are any 6 figure salaries in Scranton.
They haven't kept up with the rest of the country as far as house prices and salaries.

Aww hell, this has been going on since values first started to drop.

Every municipality has been nudging up property taxes everytime the real estate values nudged down,... and it wont happen the other way around when the market takes some recovery steam.

Its called buying low, and selling high.

This is why the city is broke:


$16.98

Avg. property tax rate per mill
($1000 of Value)

And the Average assessed value of a home in Scranton is $11,000 eleven thousand dollars.

Does this make any sense?

Here is the link to the PA property tax info...maybe someone else can figure it out.

www.lowtaxrate.com...

www.lowtaxrate.com...

reply to post by timetothink


11 grand? Are houses there really cardboard boxes? Can't even do a full bathroom renovation for that....

reply to post by TKDRL


You have to read the link and the crazy way they figure it....look...

The board of county commissioners in each county is empowered to set the county predetermined ratio. This ratio of assessed to market value may not exceed 100 percent. The county predetermined ratio is then applied to the base year value or the current market year value to calculate the assessed value of properties throughout the county. An assessment, then, is a percentage of the market value of the property. The assessment is the foundation which the taxing authorities use to determine the amount of real estate taxes based on their tax rates.

For example: If the current market value or base year value of Property A is $100,000 and the county’s predetermined ratio is 40 percent, then the assessed value is $40,000 [$100,000 x 40 percent].

Hypothetically, the county may levy five mills for the real estate tax; the township in which the property is located may levy ten mills for the real estate tax; and the coterminous school district may levy 20 mills for the real estate tax. The owner of Property A would, therefore, be liable to pay real estate taxes in the amounts of $200 to the county [$40,000 x .005], $400 to the township [$40,000 x .01], and $800 to the school district [$40,000 x .02]. This is the general method by which property is valued and assessed throughout the Commonwealth.

MARKET VALUE X COUNTY PREDETERMINED RATIO = ASSESSMENT ASSESSMENT X MILLAGE RATE = TAX BILL

Lackawanna County must be even lower because a $100,000 house assesses at $11,000? Then the millage rates are low.


My aunt pays $1500 for 2 acres with 2 houses on it....PER YEAR!


Holy cow!

So when they say a 25% increase in taxes it's nothing! At least compared to what of us pay. I pay $10,000 a year for ONE house on a 1/4 acre.

Cities have been getting raw deals from the tax structure for YEARS.

In my parts, federal and provincial (state) income taxes are ridiculously high compared to property taxes. Remember that only one household pays property tax. Everyone pays income tax. Also there is a federal 5% sales tax on everything purchased. ADD to that another 5% provincial sales tax on everything purchased.

Our liquor, cigarettes, and gasoline is taxed at nearly 1000%. eta; I'm guessing on the exact figure but reality is a pack of cigarettes and case of beer will cost over $40. Pretty much all cost is hidden 'sin' tax.

Now all this money and tax being gleaned is RARELY seen by city administrations. Transfer payments (from above tiered gov'ts) are minimal. Meanwhile infrastructure is crumbling, public power grids are maxed, sewer lines, roads, bridges, are all falling apart everywhere because they have passed the estimated life expectancy.

My question is....where does all this tax money go?? Seriously?? I rarely see ANY benefit for any tax EXCEPT for my property taxes which half go to cities and half to public education.. These I can see, use, and feel. The federal taxes just seem to vanish at the Capital. We really need LESS centralized gov't as it just drains resources that can be used at the local level.

You Americans do not know the meaning of Tax lol. Try visiting north of 49.

Originally posted by timetothink
Lackawanna County must be even lower because a $100,000 house assesses at $11,000? Then the millage rates are low.


My aunt pays $1500 for 2 acres with 2 houses on it....PER YEAR!


Holy cow!

So when they say a 25% increase in taxes it's nothing! At least compared to what of us pay. I pay $10,000 a year for ONE house on a 1/4 acre.

10k a year in PROPERTY taxes?????? I have 9 acres and pay 900 a year, another house is 450 a year.

reply to post by timetothink


I paid about 800 a month I think it was in property taxes back in NY
Our town estimated values super high, the raised ranch I had when I lost it was at 400k. Was 200k when I put the down payment on it 8 years earlier. The town was attempting to make it a rich person only town.

Up here a comparable house, and more land is about 400 a year.

reply to post by Goldcurrent


Sounds like here in NB lol. Beer prices are nasty, I brew my own mostly.

Our power grid seems OK for now, we lose it maye 4 times a year, and rarely for more than an hour. Sewers are fine. The roads and highways suck ass though.

Originally posted by MidnightTide
there is only one source of revenue left. The average person just trying to get by.

Just think, the total tax rate during the American Revolution was 2%.

Not the only "source of revenue"....You shuold never take Fox at it's word..

SCRANTON, Pa. -- A tentative recovery plan for the financially struggling city of Scranton includes a commuter tax and increased contributions from nonprofits as part of the measures intended to increase revenue.

The plan submitted Friday to the state Department of Community and Economic Development would also increase real estate taxes 33 percent and establish a sales tax and raise other fees while cutting city department budgets.

Scranton's financial woes gained national attention last month when Mayor Chris Doherty temporarily cut almost 400 workers' pay to the federal minimum wage of $7.25 per hour because the city didn't have cash on hand to meet its payroll obligations.

www.sacbee.com...

They are raising taxes...while cutting budgets...

If they chose not to cut budgets...that would be "liberals gone wild"

If they chose to no longer fund thier city government through taxes...that would be "far right crazy" and the city would look like a wasteland and everyones home values would fall off a cliff, jobs would vanish etc.

And the city obviously chose to eliminate the debt rather than file for bankruptcy.

Looks to me like they took the middle course...

Curious what your solution would have been??

Plus like I said..they are paying 1960 rates in property taxes and that's why they are all upset about a hike...they don't want to be brought up to today's rates....the county and state screwed up by not fixing this mess years ago.

The state is giving rebates to seniors and those making under $30,000 a year since the state is trying to fix this over the last couple of years, so at least there is some help.

reply to post by Gridrebel


Yep, and that's on a $250,000 house, nothing fancy at all. just average for NY.

Can't move until my husband retires, 5 more years...I can't wait!!

reply to post by timetothink


Thank you for the first hand information. I was thinking of NJ anyway, not PA.

But yeah, that city really needs to get with the times. I'm being nice here. The average assessed value of a home may be $11,000 ( For tax reasons) but that's certainly not the case if you want to buy or sell a home.

www.homes.com...

ao.lackawannacounty.org...

Something isn't right with this picture. The taxes stated in the sales information from Homes.com don't match what the county records say. And if they distribute the tax money based on the information in the county complex, then......... Say I bought that house ( Sweet huh? ) and paid the $506 in monthly taxes. Say the Mill levy's (taxes) for that house totaled $100 a month which, by all accounts, is realistic. And from the way I understand it, that one levy is the grand total of 3 or 4. Meaning that 100 dollars is getting split 3 ways. The county pays what it needs to pay with that 100 dollars, city employee salaries included, but where is other $406 going? Am I missing a part of this equation or is someone downtown making some extra money through "creative accounting?"

I understand assessed values are always going to be a portion of the real market values, but the difference here seems to be elevated to a disparity. Meaning that they really need to get someone out there and re-appraise this property so it's more in sync with what the real market value is. How long has it been you said? 50 years?. Besides which, whatever the taxes are that are stated on the county records should be the same amount that is seen in a real estate listing. The property I listed here was bought in 1979 for $80,000 and the taxes still reflect that amount.

Somebody correct me if I'm wrong here, but instead of hiking the taxes 33%, maybe Scranton should just scrap the way they do this and get a more modern accounting system.

www.lackawannacounty.org...

reply to post by Taupin Desciple


That 500 a month figure in that link seems way off...and this millage thing really confuses me..so I could not begin to figure it out.

SCHOOL BORO/TWP/CITY GRAND TOTAL
SCRANTON
School .11136
Boro .096701-L
Twp .021030-I
City .2630611-L
Grand Total .187390-I

reply to post by timetothink


Same here.

Maybe I need to start paying attention to real estate east of the Mississippi because there are places, I guess, who do things skewed from the norm. Usually when you have disparities from these sorts of transactions, property taxes that don't cover the expenses they're designed to, it's usually something market driven. Like a drop or rise in real estate values which, in most cases I've seen, will bring an appraiser out which in turn will adjust the taxes accordingly. Never have I seen a town go through something like this because their accounting methods were so antiquated.

Actually, this might be kind of interesting to watch to see how it all pans out.