Intelligencer Journal/Lancaster New Era
Ruling reduces MCC tax burden
County officials' decision could mean $37K less in revenue for Ephrata school district Ruling reduces MCC tax burden BY KIMBERLY MARSELAS, Correspondent
The Akron-based Mennonite Central Committee could see its local tax bills drop by $55,000, following a controversial decision by county officials.
A decision issued by the Board of Assessment Appeals on Jan. 15 partially or fully exempts five parcels owned by the international service organization.
While reducing MCC's tax burden, the decision could mean $37,000 less in revenue for the Ephrata Area School District and $5,500 less for Akron Borough. MCC's county tax bill also would be lower.
The MCC buildings involved in the decision include the agency's headquarters at 21 S. 12th St., Akron, and four nearby residential facilities used largely to house the organization's volunteers.
Tina Mast Burnett, MCC's director of administrative services, presented the request to the appeals board in November. She estimated the ruling could save her organization about $55,000 annually. Though she did not ask for specific tax-exemption percentages for each building, she said she expected some would be partial based on the uses.
Mast Burnett said MCC decided to ask for the relief to reduce administrative costs and redirect contributions "as much as possible to carry out our ministries of disaster relief, sustainable community development, and justice and peace-building."
"MCC's support comes from its constituents, church members and others, who give to our ministry," she wrote in an email Jan. 31. "It is our responsibility to use those dollars as carefully as possible to meet the ministry to which our donors give."
But Akron Solicitor Kenelm Shirk argued at last year's hearing that MCC should not be exempt at all. Shirk said on Jan. 31 that the request had been "unclear at best."
Denise Elliott, an attorney representing the Ephrata Area School District, said a letter sent to the assessment board following the hearing argued that MCC "failed to meet its burden" in demonstrating that it is a purely public charitable organization.
Officials with the school district's business office estimate that the loss in tax revenue would total $37,091 annually. Shirk said Akron faces a $5,500 loss.
Officials in both local jurisdictions have the right to appeal the county's decision.
Akron council is expected to discuss the matter at its next meeting on Monday.
Ephrata school board members discussed the exemptions at a committee meeting Monday, but a spokesperson said the district is still weighing its options.
In a statement made before Monday's meeting, Ephrata school board president Tim Stayer made the following comments:
"First and foremost, we take no issue with MCC and their ability to file an appeal of their property values and assessments. They are simply following and making use of existing law and procedures to the benefit of their ministry and operations.
"However, the $37,000 reduction in their tax rate is a $37,000 loss of revenue to the Ephrata Area School District. This amount may seem minuscule in relation to our overall budget, but we are living in the days of which every penny counts.
"The district is facing several increases in its operating expenses for the 2013-14 school year. We are facing increased expenses from PSERS, special education, health care and transportation costs that will exceed two million dollars in increased in expenses.
"Per Act 1, we are limited to a 2.10 percent tax increase, or approximately $700,000 if we were to raise taxes to our maximum limit. As a result of this limitation, we cannot raise sufficient revenue to cover those costs as a result of the tax limitations set by Act 1.
"So yes, the loss of this revenue will impact our budget. The administration and board will need to thoroughly review the budget and look for additional savings and reduction in our spending as a result of this lost revenue."
The county's decision on MCC effects the following properties:
n A portion of the administrative offices at 21 S. 12th St., previously taxed at 25 percent, which will now be taxed at 11 percent. Mast Burnett said 11 percent of the building is rented to an outside group.
n 22 S. 12th St., which will be fully exempt.
n 10 S. 12th St., which will be 67 percent taxable.
n 1100 Main St., which will be fully exempt.
n 1109 Broad St., which will be 50 percent taxable.
Burnett said that most of the houses covered by the request will be used to lodge MCC volunteers on a short-term basis. She said two have apartments that are rented out to local families.
The county's decision is effective beginning this year for the county and Akron Borough, and for the 2013-14 school year for the school district.