Luzerne County’s administration has again requested $550,000 in 2018 to cover refunds to property owners who challenge their real estate assessments and obtain reductions.
The county will hit or come “very close” to spending this year’s $550,000 allocation, county Budget/Finance Division Head Brian Swetz told council during this week’s budget presentation.
A total of 493 assessment challenges are pending, including a notable appeal involving the Mohegan Sun Pocono casino in Plains Township that is scheduled for trial later this month, Swetz said.
According to officials familiar with the case, the casino’s appraisal concluded the property is worth approximately $140 million, while the Wilkes-Barre Area School District’s dueling appraisal pegged the value around $270 million.
The county assessed the casino complex at $152.5 million. Owned by Downs Racing LP, it includes four parcels totaling 264 acres with a hotel/convention center and other amenities, records show.
The casino is the second-highest valued commercial property in the county, topped only by the nuclear power plant in Salem Township owned by Susquehanna Nuclear LLC, which is assessed at $248 million, records show.
Under current tax rates, Downs Racing pays a total $3.84 million in real estate taxes: $2.66 million to the Wilkes-Barre Area School District, $911,248 to the county and $270,000 to the township.
The casino’s overall tax bill would decrease to $3.53 million if the assessment is reduced to $140 million.
Refunds date back to the year a challenge was filed, which would be 2016 for the casino, officials said.
The high number of pending cases stems from the county’s efforts to force resolution of stale cases. A series of larger commercial appeals, some filed in the wake of the 2009 countywide reassessment, have strained county budgets in recent years.
Clearing out this backlog will eliminate the compounding effect of multiyear refunds, Swetz said.
Councilman Harry Haas is optimistic that addressing outstanding cases head-on is prudent.
“It’s been a sore spot in the budget for years, and I think as these big-ticket items start to really disappear, you’ll see a windfall,” Haas said.
Recouping money
The repayment of incorrect homestead tax breaks also came up during Swetz’s presentation.
The county ended up receiving a total of $202,023 in 2016 and 2017 from property owners who received discounts on multiple properties, even though the law allows the break for only one owner-occupied primary residence per property owner, according to the budget.
The impacted property owners were billed based on a list of potential errors formulated by the assessor’s and controller’s offices following the March 2015 discovery that several past and present officials had received too many discounts.
Participants saved $45 to $57 on their county taxes annually from 2009 until the county-funded break ended in 2015.
Swetz told council he did not budget additional receipts in 2018 because most outstanding cases were resolved. Lingering unpaid bills may be turned over to the county tax-claim office, which would impose additional penalties and proceed with a tax sale if the delinquency remains for more than two years, he said.
Overall, the county budget/finance division is requesting $3.27 million in 2018, an increase of $93,200. This covers tax collection and the budget/finance, treasurer’s and assessor’s offices.
The proposed budget counts on $124.01 million in revenue from Swetz’s division, an increase of $2.75 million.
The lion’s share comes from real estate taxes, budgeted at $112.2 million in 2018. The administration’s proposed 2 percent tax increase would bring in $2.2 million more, while another $700,000 is expected from the expiration of tax breaks and the addition of new construction and missed properties to the tax rolls, Swetz said.
His division is budgeting $8.64 million from delinquent real estate taxes collected by tax claim operator Northeast Revenue Service LLC, which is the same amount as 2017.
Northeast Revenue has been running the tax claim office since May 2010, when previous officials opted to privatize the operation to reduce general-fund operating expenses and improve collections. The contract was renewed in 2014.
County Manager C. David Pedri told council Northeast Revenue’s contract extension runs through 2018, which means the opportunity to handle tax claim must be publicly advertised next year.
