$467M in tax-free properties in Union County

Sept. 10--Union County measures at 318 square miles, fourth smallest in Pennsylvania, but packs $2.27 billion in taxable real estate within its borders.

There are 16,642 taxable parcels with a total assessed value of $2,275,111,480. A property tax bill is issued on each from the c sounty, one of four school districts and 12 of 14 municipalities that tax real estate.

As in all counties, not all properties are taxed. There are an additional 682 tax-exempt parcels -- 3.9 percent of total parcels in the county -- valued at a combined $467,594,900 whose owners don't get an annual bill.

Union County's tax-exempt properties are explored in the second in a four-part series by The Daily Item. A review of Northumberland and Snyder counties, where 4.9 and 5 percent of properties are exempted, respectively, are planned in the coming months. Exemptions in Montour, which accounted for 3.5 percent of properties, were explored in July and can be read at dailyitem.com.

Were no exemptions granted, Union County would bill for an additional $2,599,827 in property tax revenue, with additional billings from municipalities and school districts. The county collected $12,099,701 in property taxes in 2016.

That additional revenue is forgone out of favor to a variety of organizations based on charitable impact, as allowed by the Pennsylvania Constitution.

Bucknell University and Evangelical Community Hospital each qualify as a nonprofit.

There are 177 individual parcels owned by dozens of Union County churches and cemetery associations that are exempt.

Playgrounds in Mifflinburg, art galleries in Lewisburg, fire stations across the county and government owned properties -- from the White Deer Township municipal building to the federal penitentiaries in Lewisburg and Allenwood -- aren't taxed for assessed real estate value.

"I think here in Union County, we get a great deal in exchange for granting that exemption," said John Showers, county commissioner.

"How do we begin to put a price tag on what Bucknell University brings to our county in terms of jobs and more," Showers said, repeating the same for Evangelical.

Individual counties approve exemptions and preside over appeal hearings of property assessments. Appeals can proceed all the way to the state Supreme Court. The Constitution grants the state legislature power to allow exemptions and set standards and qualifications for local taxing authorities.

"The nonprofits like museums and civic organizations add to the richness and the fabric of our communities," Showers said, adding that some would find it difficult, if not impossible, to operate without the exemption.

Bucknell: Most parcels, highest value

Bucknell University owns the most tax-exempt parcels.

The university has 62, including residence halls, academic buildings, Christy Mathewson Stadium and Sojka Pavilion. According to county assessment data, the combined value of the exempt parcels is $168,874,000 -- 36 percent of the entire sum of exempt parcels across Union County. Bucknell claimed $1.26 billion in assets and turned a $9-million-plus profit at the end of the 2014 tax year, according to the latest filing available online.

All but one parcel is located in Lewisburg or East Buffalo Township. The exception is Bucknell's Brown Conference Center in Buffalo Township, about eight miles from campus.

The combined tax bill -- municipality, county and school district -- on all of the university's exempt parcels would total $5,527,825 in 2017.

Not all Bucknell University properties are exempt.

According to Mike Ferlazzo, director of media relations, Bucknell paid $342,038 in property taxes in fiscal year 2016-17 on eight parcels in Lewisburg and eight in East Buffalo Township.

That would include its golf course and baseball stadium west of Route 15. It also includes three downtown Market Street properties -- Barnes & Noble, Campus Theatre and the DeWitt Building.

Acquisition and renovation of the three along with the former federal building, now Bucknell Downtown Offices, which is exempt, was completed as part of a $26 million investment known as the Lewisburg Core Community Initiative. Bucknell accounted for $5.6 million, the rest invested by the state and federal government. It resulted in 130 full-time and part-time employees relocating to the downtown.

Entities that are exempted sometimes make PILOT payments to local governments -- Payments In Lieu of Taxes.

"Bucknell does not make PILOT payments, but the university has partnered with Lewisburg on various community initiatives -- most notably the Lewisburg Downtown Partnership Project, which restored the aforementioned buildings, and the Lewisburg Community Garden," Ferlazzo said. "Bucknell has partnered in the past and plans to partner in the future with the borough on various infrastructure improvement projects."

One such project is the Elm Street Project that includes restoration of portions of Fifth, Sixth and Seventh streets. Bucknell University provided $250,000 when the project launched a decade ago. The university since provided at least an additional $40,000 for streetscape improvements on Fifth and Seventh streets, according to Samantha Pearson, Elm Street manager.

Bucknell also partners with the borough and Lewisburg Neighborhoods in the ongoing Bull Run Greenway project, providing technical assistance. University students from multiple academic disciplines created studies in the past regarding parking and flood risk.

Mayor Judy Wagner spoke to the impact of having Bucknell University in Lewisburg.

There are approximately 3,600 students, 380 full-time academic faculty and hundreds more employees, full-time and part-time. Sales and employment taxes contribute to the tax base along with taxes from university employees' own properties.

Bucknell's Small Business Development Center launched local businesses, including Iron Front Cowork in the Chamberlin Building and Siam Restaurant, both on Market Street, along with a slew of web-based start-ups.

"A vibrant, safe, bustling downtown is a great asset to the university. On the same token, a vibrant university is a great asset to the borough," Wagner said. "I believe Bucknell makes up for not paying property taxes."

Health care exemptions

Evangelical qualifies for the hospital exemption. It has seven parcels at $53,939,200 that would be billed $1,272,425 in 2017 if the parcels were on the tax rolls.

Albright Care Services is exempted from paying taxes on three parcels valued at $15,986,800, which includes its Riverwoods facilities. Four additional parcels with a special assessment for potential development total $600,600. The company's bill would be $391,296.

Portions, but not all of, the Diakon Buffalo Valley Lutheran Village complex are exempt. Three parcels that include the assisted living facility are exempted at a value of $12,182,600. That would account for a bill of $430,411. The firm's retirement community property is taxed.

Like Bucknell, Evangelical isn't without property tax bills. It paid $436,000 in 2017 on 36 parcels in Union County, including administrative buildings and physician offices, according to James A. Stopper, CPA, the hospital's chief financial officer and vice president of finance.

In its latest tax disclosure available online, Evangelical claimed $272 million in total assets and turned nearly $29 million in profit in 2014.

And like the university, the hospital's impact on the community as measured in dollars far exceeds any hypothetical tax payments on exempted properties.

Stopper said Evangelical has a $240 million economic impact on the region which includes an $84 million payroll. It assumed $20 million in bad debt to Medicaid in unpaid health services for patients who can't afford deductibles and the like, Stopper said. The debt exceeds $30 million when including Medicare patients.

"We provide a lot of services to patients who can't pay us," Stopper said.

The hospital also donates to community organizations like the Central Pennsylvania Food Bank, Lewisburg Children's Museum, Ronald McDonald House and to Lewisburg Area School District for a science room in its new high school. Evangelical contributes $500,000 annually to charity care and eats $500,000 worth of low-cost or no-cost health screenings through its Community Health and Wellness program.

"For a small community hospital, I think we do as much as we can for the community," Stopper said.

Government share, others

The Pennsylvania Constitution's list of potential exemptions is long. It includes churches, burial grounds, hospitals, universities, courthouses, jails, public parks, public property, real estate owned by institutions of public charity, playgrounds founded and maintained by public or private charity, property maintained by public or private charity and used exclusively for public libraries, museums, art galleries or concert music halls, silos used for processing or storing animal feed on a farm and fire and rescue stations.

The state of Pennsylvania owns 38 exempted parcels in Union County, totaling 10,120 acres at a value of $23,194,500, according to county assessment data. Most of it is state game land or part of the Bald Eagle State Forest. It paid $81,000 to Union County in lieu of taxes for its game land and forest land.

Union County received an additional $21,266 this year in PILOT funds from public utilities, the Union County Housing Authority and SEDA-COG.

The federal government accounts for the Lewisburg penitentiary site's 947 acres, valued at $3,110,200. USNEP, a federal employee credit union, is listed as the owner for the Allenwood lockup -- 4,506 acres at $2,906,000.

The county's public schools are exempt.

The value of Lewisburg Area School District's exemptions for seven parcels tops $40 million. Its new high school on Newman Road comes in at an assessment of $21,944,600. Mifflinburg Area School District has five exempt parcels valued at $24,776,100; Milton Area School District, four parcels including White Deer Elementary, $3,079,500; and SUN Area Technical Institute, one parcel, $4,899,000.

Municipal and county governments account for 154 of the county's exempt parcels. That includes the Union County Courthouse, municipal buildings, sewer plants and playgrounds and some undeveloped parcels that make up Great Stream Commons in Gregg Township.

Target Corp. still owns 166 acres at the park where it scuttled plans to build a distribution center. Once exempted as a Keystone Opportunity Zone, the parcels have been taxable since 2014. Union County owns three parcels totaling 351 acres. KOZ designations for each have been extended to 2027. If the land remains undeveloped at the time and isn't sold, it would still be exempt since it is county-owned.

"It's an investment for us. That's how we treat it," said John Mathias, county commissioner, who said there's been investment interest in the property this year. "We've positioned it for anything from a big box distributor to manufacturing. If we had our druthers, if we could put some smaller buildings in for manufacturing, that would be our preference. Big distributors, warehouses, they don't employ that many people but take up a lot of space."

The county was paying more than $1,000 annually to Warrior Run in lieu of taxes and since upped its payment to over $7,800.

Lewisburg Borough owns 56 exempt parcels. Several are vacant lots along Bull Run near Hufnagle Park, where flooding led to necessary demolition. Others include borough buildings and public parks.

Wagner, the borough mayor, estimates 56 percent of borough property is taxable. That 56 percent carries the load of taxpayer expenses -- snow plowing and removal, road paving, maintenance and fire protection.

Exemptions had once gotten under her skin, she said, but no more.

"Yes, it's difficult," Wagner said. "Fifty-six percent have to make up the difference. But nonprofits contribute to the quality of life in town."

Also included among the approved exemptions is housing for disabled veterans. There are 24 such parcels in Union County valued at $2,647,700.

Eighteen parcels designated as historic buildings or museums are exempt, including Mifflinburg Buggy Museum and the old county courthouse at Market and Vine streets in New Berlin, home to the borough's heritage association. The combined value is $2,609,500.

Thirteen parcels exempted with the Amish schoolhouse designation total $1,543,900 in assessed value. Twenty-three parcels for fire stations are exempted at a combined $4,172,100.

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