{"id":14972,"date":"2012-10-20T18:38:20","date_gmt":"2012-10-20T22:38:20","guid":{"rendered":"http:\/\/theredphoenixapl.org\/?p=14972"},"modified":"2012-10-20T18:38:20","modified_gmt":"2012-10-20T22:38:20","slug":"privatization-madness","status":"publish","type":"post","link":"https:\/\/redphoenix.news\/es\/2012\/10\/privatization-madness\/","title":{"rendered":"Privatization Madness"},"content":{"rendered":"

\"\"<\/a><\/p>\n

Now Private Companies Are Collecting Our Taxes<\/strong><\/span><\/p>\n

by Dave Lindorff<\/span><\/p>\n

I went into my local township building Monday to settle up my local income tax bill. I had filed for an extension of my federal and state taxes back in April because of my father\u2019s unexpected death a few weeks before the tax filing date and the need to deal with his funeral and with arranging for care for my widowed mother, who has alzheimers, had taken up all my time.<\/span><\/p>\n

I paid my local tax bill on time though, because at 1 percent of income it is a relatively small amount and was easy to get out of the way. I just made a rough estimate and dropped a check with the one-page form in the mail, figuring I\u2019d settle the amount due after my federal taxes were completed. So, after finally getting my federal and state taxes done, I went to the town hall to settle up. It turned out I\u2019d overpaid my local taxes by $165.<\/span><\/p>\n

Ordinarily if I\u2019ve overpaid my local tax, for example by paying too much in the four required estimated tax payments, the township simply applies the overpayment to my next tax year\u2019s estimated payment. Not so this year. I was told that the collection of taxes by all the townships in Montgomery County had been privatized \u2014 taken over by a private accountancy firm called Berkheimer Tax Administrator, a company expressly created to bid for outsourced collection operations of local towns, school districts and counties, for a fee.<\/span><\/p>\n

The immediate problem for me resulting from this astonishing privatization of a fundamental local government activity \u2014 the collection of taxes \u2014 was that the local township office said they could not credit my overpayment as before. \u201cBerkheimer is in charge of the money,\u201d a township official told me, \u201cand they will send you a check for the overpayment.\u201d<\/span><\/p>\n

\u201cBut that means I will be late in filing the first two quarterly estimated payments for 2012,\u201d I said, adding, \u201cbut I\u2019m really not late, because they already have my money!\u201d<\/span><\/p>\n

\u201cYou\u2019ll have to call Berkheimer,\u201d she told me. \u201cWe can\u2019t do anything about it.\u201d<\/span><\/p>\n

After calling Berkheimer (and waiting through 15 minutes of listening to god-awful Muzak), I finally got a tele-clerk, who told me that there was nothing she could do. I would be issued a check for the overpayment, and would be charged a late fee for my late quarterly payments. She said I could write and explain about my father\u2019s death and see if they could \u201cdo anything,\u201d but she didn\u2019t sound optimistic. I\u2019m not either, and I sure don\u2019t want to go through any more of those 15-minute Muzak experiences (which seem calculated to deter callers)!<\/span><\/p>\n

I learned that for taking over the role of collecting my taxes for my local town, Berkheimer gets paid 1.39 percent of whatever taxes it collects. That\u2019s a pretty cushy deal, given that nearly all of the local taxes collected ($6.4 million a year, in the case of my town), are automatically withheld by employers and then paid over to the taxing authority \u2014 in this case Berkheimer. Talk about a cushy arrangement: $13,900 for every $1 million in taxes mailed in by employers! Even where it comes to self-employed taxpayers like me, it\u2019s not a hard job. Send me a tax bill once a quarter, and book the check when I send back the payment coupon and a check. (Except that Berkheimer can\u2019t even do that right: they\u2019ve been sending out estimated tax forms in envelopes that say nothing about local tax documents, and that just have Berkheimer in the return address, leading most people, like me, tossing them out as junk mail solicitation letters from some accountancy firm trolling for clients.)<\/span><\/p>\n

This tax privatization business is sure nice work if you can get it. And Berkheimer got it because the professional association of CPAs in the state lobbied the Pennsylvania state legislature heavily in 2009 to get a law passed mandating (got that? mandating!) that all townships in each county in the state get together and hire one organization to collect all their taxes. My county, Montgomery County PA, which opposed the bill, hired Berkheimer. So did a lot of other counties. The company, created expressly to capitalize on the new law, has 17 offices dotted around the state according to their website, to collect the taxes for hundreds of towns, school districts and other local entities.<\/span><\/p>\n

How much are they getting paid in total for all this \u201cwork\u201d? That would be hard to ascertain. The company is private, and is not subject to any sunshine laws. Think about that. Local taxation has always been one of the bright spots of open government until now. You could go into the registrar\u2019s office and find out what someone\u2019s house was taxed, or find out exactly what taxes were being paid by a local company. Since no government agency is monitoring Berkheimer\u2019s activities or those of other similar privatizers of the tax collection business, though, doing that kind of research now is almost an impossible task. A reporter trying to dig up this information would have to go to each taxing authority to find out how much their residents and local businesses owed in taxes each year, and then find out how much of a percentage cut Berkheimer was getting in that county for collecting all that money (the local jurisdictions got together in each county as an adhoc committee to negotiate a deal with the company, but good luck locating anyone from that committee who\u2019d be able to tell what the terms were.) I lucked out: The chair of the committee in my county was the township manager for Montgomeryville, PA, and he gave me the 1.39% figure.<\/span><\/p>\n

Now the proponents of privatization always argue that it is a more efficient way of doing things than having \u201coverpaid\u201d public employees do that job, so I wondered: is this privatization of a basic function of local government saving money? I called the tax collection office at my town and asked Ed Shay, the head of that office. \u201cWell, they\u2019re laying off two people this year,\u201d he said. \u201cOne of them is me. I\u2019m gone at the end of December.\u201d That\u2019s two employees, and possibly a third after the transition is completed sometime next year.<\/span><\/p>\n

Jonathan Bleemer, Finance Director for Upper Dublin, says that the township, which also opposed the new state law, estimates that prior to this mandated privatization, it had been paying about $125,000 a year for the staff that collects the annual $6.4 million in town income tax receipts. At 1.39%, Berkheimer will be doing the same job for just shy of $90,000. That $35,000 difference might seem like a small savings, at least, but as Bleemer points out, the township has been very aggressive about pursuing delinquent taxpayers. \u201cWill Berkheimer be as effective at that part of the job?\u201d he asks. \u201cWe don\u2019t know. They still only get the same 1.39% for collecting from delinquent taxpayers, which is not very good compensation since it\u2019s a harder job, but it\u2019s what we\u2019re stuck with by the state law.\u201d (Remember, if the diligent \u201coverpaid\u201d public tax department workers chased down and collected just one corporate delinquent taxpayer\u2019s bill of $35,000 in a year, they\u2019d have broken even with Berkheimer.)<\/span><\/p>\n

He also agreed that he had heard a lot of reports from residents about poor service from Berkheimer.<\/span><\/p>\n

As the soon-to-be-furloughed tax director Shay added, \u201cIt\u2019s always better if your tax collector is closer to the people paying the taxes.\u201d He explained that this proximity makes it easier to catch cheating, and also easier to help taxpayers when there are problems (like mine). Just one example: figureing out one\u2019s local tax bill can be complicated \u2014 for example, someone who works in nearby Philadelphia, and pays a 4% tax to that city, can have that payment deducted from the local bill, thus wiping out any local tax completely, but this can be hard for a number-challenged resident. The friendly tax staff at the township were always happy to do the work right in front of you at the counter \u2014 for free. Berkheimer isn\u2019t even located near the township, and offers only a website to work with.<\/span><\/p>\n

So what\u2019s ahead? Republican legislatures are mandating privatized tax collection for local taxing authorities. We already have privatized prisons, privatized schools, privatized highways, privatized police. Will things move upwards now to the state and federal level? How long before the Berkheimer-type companies are collecting our state taxes? And with some Republicans pushing for an end to the IRS, how long before some Berkheimer clone gets the gig for collecting our federal taxes?<\/span><\/p>\n

By then, I would suspect that when you call the company with a complaint about your taxes, you\u2019ll get someone with a strong Indian accent calling him or herself Richard or Marilyn answering from a phone center in Bangalore.<\/span><\/p>\n

Fuente <\/span><\/a><\/span><\/p>","protected":false},"excerpt":{"rendered":"

Now Private Companies Are Collecting Our Taxes by Dave Lindorff I went into my local township building Monday to settle up my local income tax..<\/p>","protected":false},"author":1,"featured_media":39310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[158,166,97],"tags":[],"class_list":["post-14972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-environment","category-government","category-us-news"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/redphoenix.news\/wp-content\/uploads\/2026\/04\/privatization_14972_01803.jpeg?fit=351%2C259&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/posts\/14972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/comments?post=14972"}],"version-history":[{"count":0,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/posts\/14972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/media\/39310"}],"wp:attachment":[{"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/media?parent=14972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/categories?post=14972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/redphoenix.news\/es\/wp-json\/wp\/v2\/tags?post=14972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}