Give volunteers a tax break

All across Pennsylvania, there is a groundswell of support for a new law that would give tax breaks to volunteer firefighters and emergency medical personnel. We’re all for it, and we are delighted to report that a number of local municipalities are nearing implementation or at least talking about it.

House Bill 172 was introduced last year by Rep. Ryan Warner, R-Fayette, and co-sponsored by Doyle Heffley, R-Carbon, and Ryan Mackenzie, R-Lehigh and Berks. It took effect earlier this year and allows municipalities to offer a credit to a volunteer’s local earned income tax and a real estate tax credit. This applies only to the municipal taxes and would have no effect on school district and county taxes.

Municipalities enact a Volunteer Service Credit Program by passing an ordinance and developing policies supporting the program. Only volunteers who apply and qualify under the program enacted by a participating municipality are eligible for tax credits.

To be eligible, a volunteer must submit an application for certification to the fire chief or the supervisor or chief of the nonprofit emergency medical services agency where the volunteer serves.

Elected officials who want to implement the program should contact their solicitor or legal adviser to discuss creation of an ordinance and policies.

The National Fire Protection Agency reports that of the more than 1.1 million firefighters in the U.S., 70 percent are volunteers. Fire and municipal officials are hopeful that this program will be an incentive to reverse the dwindling number of volunteers who are willing to serve.

This is not only a problem in our five-county area, but it is a growing issue statewide. The number of volunteers has decreased dramatically in the past 40 years. Pennsylvania had about 300,000 volunteers in the 1970s; today, the number is closer to 50,000.

Officials believe this will be an incentive for prospective volunteers and help retain current volunteers who give so much to serve their communities. Others see it as a step in the right direction, although they are not convinced that this program alone will attract new volunteers.

Jim Thorpe is one of the communities that will take up the question at its December meeting. “This is a thank you to the volunteers,” said Jim Thorpe Councilman Jay Miller, also a volunteer firefighter. “I think it will end up being a 95 percent retention tool and maybe help attract some new people.”

Mahoning Township has passed the tax break, but the board of supervisors is working out the logistics. For the first year, board members want to offer the earned income tax credit, though they hope to include the property tax option in subsequent years if the process works smoothly.

West Penn Township is among other local municipalities considering the legislation, as are Lower Macungie Township, the borough of Alburtis, both in Lehigh County, and Allen Township in Northampton County.

The issue was brought up at a recent Heidelberg Township supervisors meeting, and there is interest in discussing a proposal to look into the state law or to come up with an alternate, local proposal that might accomplish the same thing. Since the four Northwestern School District townships (Heidelberg, Weisenberg, Lowhill and Lynn) often adopt similar policies in matters such as these, having a uniform policy would make sense.

Only residents of a municipality who are active volunteers are eligible for the tax credit. A nonresident option is not available. Officials recommend that efforts be made to persuade adjoining communities where volunteers reside to adopt the tax breaks, too, especially in those communities which share services.

Volunteers must meet criteria annually to qualify for credits. These include the number of emergency response calls, the level of participation in formal training and drills and the amount of time expended by a volunteer on administrative and other support services, such as providing facility and equipment maintenance.

The Pennsylvania Municipal League, the Pennsylvania State Association of Boroughs, the state Association of Township Commissioners and the state Association of Township Supervisors have prepared a blueprint and sample ordinance to guide municipalities on implementation of the ordinance.

They did so in collaboration with the state fire commissioner and the Department of Community and Economic Development.

Each municipality can choose whether to offer the earned income tax credit, the real estate tax credit, or both. The real estate tax credit is limited to 20 percent of the municipal real estate tax liability for residential property owned and occupied by an active volunteer.

The earned income tax credit must be set at a flat amount. If a volunteer’s tax liability is less than the flat amount, his or her credit is limited to the total tax liability. The law also provides a $2,500 fine for any person who makes a false service report.

By Bruce Frassinelli | tneditor@tnonline.com