New Castle Mayor, Chris Frye, issued a statement today regarding the City of New Castle real estate tax bills that were mailed a few weeks ago. According to Frye, his office and other offices in the City have been fielding numerous phone calls and inquiries regarding the recently mailed tax bills for the City real estate taxes. According to the Mayor, despite there being no change in the real estate taxes in the adopted budget, some residents noticed a slightly higher tax bill than last year and some have seen a small reduction.
The Mayor explained that three factors have contributed to the slight changes. “First, the City of New Castle has a split real estate tax system in place which taxes the land at one rate and the building and improvements at a separate, and lower rate,” said Frye. “Specifically, in the 2022 adopted budget, the property tax rate on land is 36.815 mills and the tax on the building and improvements (that sits on top of the land) is only 10.435 mills. Because the assessed value of the land ($92.9 million) is much lower than the building assessed value ($393.6 million) in New Castle, the “split tax rate” becomes 15.476.” Frye explained.
The Mayor added that, “based on a formula set by the Pennyslvania Department of Community and Economic Development, the City’s split rate gets adjusted every year, even though the overall millage number does not change if there is no tax increase or decrease.” The Mayor’s statement explained that every year, some properties may realize a slight change, up or down, from the previous year’s tax bill, even when there is no millage tax change.
According to the Mayors statement, the “split tax rate” over the past few years were as follows:
- 2019 14.226
- 2020 14.226
- 2021 15.476
- 2022 15.476
“The second factor that contributes to variations in tax bills are the property assessments. When an improvement is made to a property the county eventually changes the assessment based on the value of the improvement. The change is not always made immediately. But once the county assessment changes, the City tax bills are also adjusted,” Frye stated.
Finally, according to Mayor Frye, the third factor which contributed to the changes was the result of a mistake discovered late last year by the 2020 audit. Frye explained, “As part of the 2020 annual audit, it came to the attention of the Administration and the Chief Financial Officer that the property tax bills for 2019, 2020 and 2021 were not billed correctly by the former City Treasurer. As a result every tax bill was recalculated for the tax years 2019, 2020 and 2021. Either a credit or debit was then applied to the 2022 property tax bills.”
Mayor Frye noted that the total net discrepancy to the City of New Castle for 2019, 2020 and 2021 as a result of the former Treasurer’s error, was $140,129.99.
“We hope that this will help the residents understand why they may see a slight change in their tax bills from last year to this year,” the Mayor said.
If property owners have any questions or want more specific breakdown of the adjustment for their property as the result of the former Treasurer’s error, they are directed to contact Brandi Zingaro at (724) 656-3546 or via email at citypropertytax@newcastlepa.org.