School board upset by York City's collection of tax
The York City School Board's vice president on Monday expressed concern over the city's decision to collect its half of the real estate transfer tax, ending a years-long "gentleman's agreement" that sent all of the tax proceeds to the district.
Mayor Kim Bracey late last month signed the city's 2016 budget where the council approved the city's collection of the tax, which usually brings in about $600,000 annually.
One percent of the 2 percent tax — which is collected on the transfer of real estate — goes to the state, while the remaining one percent is to be split by local municipalities. The city and the school district should have been splitting the tax, but in a "gentlemen's agreement" made years ago, the city agreed to let the school district have its share, said the York City schools' solicitor Jeff Gettle.
Vice President Michael Miller said the council's decision was "unfair," and it was "taking away money from the school district that is very much needed."
Because there was no formal contract written up, the city is within its rights to collect the tax, Gettle said.
"I don't believe the school district is in any position to say, 'You can't do that,'" he said. "It's not the district's money, per se."
The council voted to give notice that it will begin collecting its share of the tax money in July.
Richard Snodgrass, the school district's business manager, said the impact to the district will vary, as the amount of funds collected depends on the amount of real estate transactions each year.
The tax would put about $150,000 into the city's coffers in 2016 and about $300,000 each year thereafter, he said.
— Reach Jessica Schladebeck at email@example.com.