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HomeMy WebLinkAbout549 SuhyMs. June T. Suhy 6881 Old State Road Edinboro, PA 16412 Re: 85 -140 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 549 DECIDED JAN 3 0 1987 14A1 LEDFVF3 ._a $$7 Dear Ms. Suhy: The State Ethics Commission has received a complaint regarding you and a possible violation of Act 170 of 1978. The Commission has now completed its investigation. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you, tax collector in Franklin Township, violated Section 3(a) of the Ethics Act which prohibits a public employee's or public official's use of office or confidential information gained through that office to obtain financial gain, in that from 1979 to 1981 you collected commissions relating to taxes collected by you which were in excess.of the commission percentages allowed by law, and by receiving F.I.C.A benefits from 1970 through 1984 paid for with township funds. A. Findings: 1. You are the elected talc collector in Franklin Township, Erie County, Pennsylvania and as such, are subject to the provisions of the State Ethics Act. 2. Franklin Township Ordinance No. 1, effective March 3, 1960, established a township tax on salaries, wages, commissions and other compensation earned by township residents. a. This tax was levied pursuant to the Local Tax Enabling Act. 53 P.S. §6901 et. seq. h. Ordinance No. 1 vested the authority for the collection of this tax in the receiver of taxes. Ms. June T. Suhy Page 2 c. The receiver of taxes was to be appointed by the township board of supervisors and was to be compensated at a rate to be fixed by the supervisors. 3. On May 9, 1978, the Franklin Township Board of Supervisors established an Occupation and Privilege Tax. a. This was levied pursuant to the Local Tax Enabling Act. 53 P.S. §6901 et. sec. b. The Franklin Township Tax Collector was authorized pursuant to the ordinance to collect and enforce this tax; 4. The minutes of the Franklin Township Board of Supervisors indicate as follows: a. September 12, 1978 - Motion by Cyril Ley, second by Henry Horn to set commission rate at 4% for the collection of the Occupational Privilege tax. Unanimous. b. January 2, 1979 - Motion by Cyril Ley, second by Henry Horn to appoint June Suhy as the 1% wage tax collector for 1979. Unanimous. c. January 7, 1980 - Motion by Robert Herman, second by Henry Horn to appoint June Suhy to collect the Occupational Privilege Tax at the same rate as last year. Unanimous. d. January 7, 1980 - Motion by Henry Horn, second by Robert Herman to appoint June Suhy to collect the 1% wage at the same rate as last year. Unanimous. e. January 5, 1981 .- Act 511 Tax Collector: Motion by Robert Herman, second by Henry Horn to appoint June Suhy Act 511 Tax Collector. Unanimous. Motion by Henry Horn, second by Cyril Ley to pay the Act 511 Tax Collector the same rate as last year. Unanimous. f. January 4, 1982 - Act 511 Tax Collector: Motion by Henry Horn, second by Robert Herman to appoint June Suhy Act 511 Tax Collector. Motion by Robert Herman, second by John Sachar to set Act 511 Tax Collection rate at 5% across the board. Unanimous. 9. January 15, 1982, June Suhy asked for clarification on percentage she is being paid. As she is now collecting 81 wage taxes, will she receive 10%. The question is referred to Attorney Bolla. Ms. June T. Suhy Page 3 5. There are no minutes from 1978 or the prior years because a fire destroyed all of the township records in 1978. 6. The tax collector serving in office prior to your election in 1977, collected the same commissions that you received in 1978. 7. Prior to 1982, your commissions were as follows: Real Estate taxes 5% Per Capita Taxes 5% Occupational Privilege 4% Earned Income Tax 10% 8. According to figures developed through the records on file with the Secretary of Franklin Township, your commissions from the Earned Income Taxes collected during the years 1979 through 1981, amounted to: Year Taxes Collected Commission 1979 $28,638.37 $2,863.83 1980 $28,976.02 $2,897.60 1981 $23,272.43 $2,327.24 9. You maintain that you took no commissions and that all commissions that you received were awarded to you by the township supervisors. You stated that you turned all monies collected into the township secretary /treasurer and that at some later date, you would receive a check for your commissions on the monies collected. 10. You stated that the tax collectors previously in office received the same commissions and that tax collectors in some of the surrounding communities received more than the 5% commission that the above -law allows. 11. You advised that you primarily relied upon the manual entitled, Taxation Manual, produced and distributed by the Pennsylvania Department of Community Affairs, which contained a chapter entitled Local Tax Enabling Act, Act of December 31, 1965, P.L. 1257, No 511, and all amendments through January 1, 1984. You assert that this manual provides as follows: "The income tax officer shall receive such compensation for his services and expenses as determined by the overnin body.' Ms. June T. Suhy Page 4 12. You maintain that in accordance with the foregoing, the township supervisors could have awarded you any commission that they determined was warranted. You maintain that there are two separate and distinct taxing laws; one for t ":: tax collector, such as the real estate tax collector who is an elected official and one for the tax collecting officer who is appointed. You maintained that there is no limit on the commissions that can be paid to the latter. R. Discussion: As en elected tax collector in a second class township, you are clearly a public officials as that term is defined in the State Ethics Act. 65 P.S. §402. As such, your conduct must conorm to the requirements of that law. Domalakes, 85 -010. The Ethics Act provides as follows: Section 3. Restrictee activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Within the above provision of law, you may not use your position as a township tax collector in order to obtain a financial gain other than the compensation that is provided for by law. In the instant situation, we are called upon to determine if, in fact you have, through your public position, received a financial gain that was not part of your compensation. In order to determine if, in fact, you have so used your public position, we must first determine what is the compensation that is provided for a township tax collector in a township of the second class. The Second Class Township Code provides for the election of a township tax collector. 53 P.S. §65414. The powers, duties and responsibilities of such an elected official are also set forth in the Second Class Township Code which provides as follows: The tax collector of townships shall collect all county, township, school, irstitution district and other taxes levied within towiships by authorities empowered to levy taxes. He shall, in addition to the powers, duties and responsibilities enumerated in this act, have all the powers, perform all the duties, be subject to all the obligations and responsibilities for the collection of such taxes, as are now vested in, conferred upon, or imposed upon, tax collectors by law. 53 P.S. §65570. Ms. June T. Suhy Page 5 The compensation to be received by a tax collector for performing the duties established in the Second Class Township Code is enumerated in the local tax collection law which provides: The tax collector in boroughs and townships of the second class shall receive, as compensation for the collection of county, institution district, borough and township taxes, salary, wages or a commission on all such taxes to be fixed by the respective taxing authorities levying such taxes, not exceeding five per centum of the amount collected. In the case of school district taxes, the commission or compensation of the tax collector shall be determined by the board of school directors, and the total cost of such collection shall be reported annually to the Superintendent of Public Instruction, and shall be published in his report. For the collection of county, institution district, school district, borough and township taxes, the tax collector shall be allowed by the representative taxing authorities, actual and needful expenditures for printing, postage, books, blanks and forms. 72 P.S. §5511.35. (Emphasis added). As can clearly be observed from the foregoing, an elected tax collector in a township of the second class may receive compensation as set forth by the township board of supervisors at a rate not to exceed 5% of the amount of taxes collected. This provision, however, appears to relate to the collection of taxes which are levied pursuant to the Second Class Township Code and which are specifically, in relation to the duties and responsibilities set forth in that code as part of the office of elected township tax collector. In addition to the foregoing, however, we also note that the Local Tax Enabling Act authorizes townships:of the second class to levy taxes regarding persons, transactions, occupations, privileges, subjects and personal property within the limits of such political subdivision and upon the transfer of real property or any interest in real property situated within the political subdivision. 53 P.S. §6902. For the purposes of collecting such taxes, this law authorizes the local political subdivision to appoint an officer or collector who is charged with the duties and responsibility of receiving taxes assessed pursuant to this law. 53 P.S. §6910. This law also provides for the compensation of such officer and provides as follows: Ms. June T. Suhy Page 6 COMPENSATION OF INCOME TAX OFFICER The income tax officer shall receive such compensation for his services and expenses as determined by the governing body. 53 P.S. §6913 (VI). As can clearly be seen from the above, the compensation to be provided to this appointed collector of taxes for collecting the specific taxes set forth in the Local Tax Enabling Act is to be fixed by the. governing body without limitation as to the percentage in relation to actual taxes collected. Based upon the foregoing, there are different rates of compensation that may be applicable to the general elected tax collector who serves and acts pursuant to the local tax collection law and the income tax officer or collector who collects the taxes authorized under the Local Tax Enabling Act. A review of the facts, in the instant situation, indicate that you collected 5% or less on all taxes collected except for the earned income tax. hp until 1982, you received 10% of all taxes collected in relation to that specific tax. This particular tax, however, is assessed pursuant to the authority of a Local Tax Enabling Act rather than the Second Class Township Code. As such, the compensation to be paid to the individual who acts as collector for that tax is to be fixed by the governing body without reference to a percentage. In the instant situation, the minutes of the township clearly reflect that you were appointed as the collector of the 1% earned income tax. This appointment was made by the township board of supervisors. The minutes, however,-do not reflect what, if any salary you were to receive in this position during the years prior to 1982. The minutes do reflect that you are to receive the same salary as in previous years. The previous year of minutes, however, were distroyed by fire and there is no reference point from which to start. The prior tax collector has confirmed, however, that you received the same commissions as did she. As such, and based upon the available information, we believe that you were duly appointed to collect the earned income tax levied by the Franklin Township Board of Supervisors. We also believe that these supervisors fixed your compensation for that tax at a rate of 10% as evidenced by the prior collector's compensation. We believe that this compensation was provided for by law and, thus, we do not believe that there was any violation of the State Ethics Act. All of the compensation that you received as the elected tax collector appears to have been in accordance with the percentage requirement as set forth in the Local Tax Collection Law and was also appropriate under the Local Tax Enabling Act. Therefore, it was compensation provided for by law. C Conclusion: There was no violation of the State Ethics Act. The compensation that you received in your position as the elected township tax Ms. June T. Suhy Page 7 collector in Franklin Township, Erie County, Pennsylvania and as the appointed tax receiver for the same municipality was part of the compensation set forth and provided for by law. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final and will be made available as a public document 15 days after service (defined as mailing) unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code 2.38. During this 15 -day period, no one, including the Respondent unless he waives his right to challenge this Order, may violate this confidentiality by releasing, discussing or circulating this Order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). By the Commission, G. Sieber Pancoast Chairman