WILKES-BARRE — The city of Wilkes-Barre believes more than half of the city’s $2 million budget shortfall this year is directly related to the collapse of a company called Centax.
Centax is the company hired by the county to collect all the earned tax revenue.
City officials in Wilkes-Barre now say their budget shortfall for 2012 can be partly blamed on the failure of Centax. Centax was chosen by the Luzerne County Tax Commission to collect and distribute earned income taxes for the county’s municipalities.
Centax went into bankruptcy and never handed out the collected tax money to the municipalities. The Luzerne County Tax Commission then hired Berkheimer, a firm to oversee the taxes collected by Centax.
“The situation is, people were not getting money. Municipalities and school district were not getting their money in a properly-timed fashion which Centax should have been doing from the beginning of the year January, 2012,” said John Bolin, chairman of the Luzerne County Tax Commission.
Wilkes-Barre mayor Tom Leighton wants city employees to take voluntary furloughs to help make up the tax money it never received. Those possible furloughs include people who work in emergency services like police, fire, and EMS.
“We never anticipated an earned income tax — which is collected from employers from people that live in the city — has not been forwarded us in a timely manner,” said Mayor Leighton.
Dozens of communities in Luzerne County are owed taxes, but they could be waiting for some time before the tax money is distributed.
The latest delays came when Green Tree, a borough in western Pennsylvania, went to court and filed an injunction against Centax. That stopped all that Berkheimer was doing to try to get municipalities in Luzerne County the tax money owed to them.
“We have been concerned. We have been watching this over the last seven months as we watched it trickle in. We`re concerned and watching it and do what we need to do to get to the year end,” said Leighton.
Luzerne County Tax Commission officials said a judge in Allegheny County is expected to lift that injunction Tuesday, allowing Berkheimer to resume the work getting tax money out to the communities in Luzerne County.