Municipal Windfall: Taking Advantage of Association Governed Communities

Jun 17, 2011

The following letter to the editor was submitted to the Philadelphia Inquirer by CAI.

To the Editor:

A letter appeared in the June 10 issue of the Philadelphia Inquirer with the title “Doubly taxed seniors could opt for secession.” The author, Howard Jones, was referring to the fact that residents who own homes in association-governed communities – a cooperative association, condominium association, or homeowners association – often pay twice for municipal-type services that one expects will be provided by local government.

In Pennsylvania, as in most states, municipal type services such as refuse collection, recycling, snow removal, street lighting and street maintenance are provided by the local government and paid for by taxes levied on property. An owner in an association-governed community pays the same property tax rate as his or her neighbors who do not live in an association-governed community, yet oftentimes do not receive the same level of municipal services. In these instances, the association is forced to hire a private contractor and residents end up paying for the service twice. Meanwhile, the owners in the association-governed community receive no break on their property or other local taxes.  A perfect example of this is the City of Philadelphia’s refusal to adequately provide municipal trash collection to condominium and cooperative buildings in the city.

In his letter, Mr. Jones asserts that people who live in community associations, particularly age-restricted communities, “are troubled by what amounts to double taxation – paying for municipally provided services that we do not in fact receive. The township has received a windfall from our community.” He is absolutely correct.

Community Associations Institute’s Pennsylvania & Delaware Valley Chapter (CAI) has long advocated for a solution to this in-equity. CAI supports a rebate-type program which has been utilized in New Jersey for many years whereby the municipality can either choose to provide the municipal services usually denied to community associations, or offer a rebate back to the association based on a formula. The rebate is passed on to owners in the community through reduced association assessments.

It’s time for Pennsylvania’s state government to recognize the patent unfairness that occurs when a municipal government taxes association governed communities at the same rate as all residential property owners, and reaps the profits when it refuses to provide the same level of service in return. To paraphrase Mr. Jones, this municipal windfall is wrong. Legislation is pending in City Council that would put an end to Philadelphia’s decades-long trash saga. CAI supports this legislation and other efforts to right this wrong.

CAI is a national association dedicated to fostering successful community associations. Our mission is to inspire professionalism, effective leadership and responsible citizenship, ideals reflected in communities that are preferred places to call home. To learn more about CAI’s positions on legislative issues affecting community associations in Pennsylvania, visit our website at www.cai-padelval.org.

Tony Campisi, Executive Director
Pennsylvania & Delaware Valley Chapter
Community Associations Institute


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