Politics & Government

Settlement Requests Tax Exemption Relief from Township

Settlement Music School looks to find retroactive relief from real estate taxes incurred in 2010 and 2011.

Executive Director Helen Eaton requested retroactive tax relief for its Willow Grove branch at the Sept. 26 Finance and Administrative Committee meeting.

Speaking before the committee, Eaton explained that the school received a 2010 Interim School Real Estate Tax for $31,171.55, and a 2011 Interim County and Township Real Estate Tax for $17,553.09, which the school paid for by the Aug. 13 deadline.

Eaton also said that a 2011 School Real Estate Tax was given, and is due Nov. 7.

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Eaton also went before the to request retroactive relief and tax exemption at the Sept. 20 Budget/Finance Committee meeting, and while the committee requested more information, the consensus of the committee suggested the requests would be denied.

“They appeared sympathetic, but eventually said that they would follow the county,” Eaton told the township Finance and Administrative Committee. “I respectfully request that the township follow a different course of action.”

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The music school paid its Aug. 13 deadline taxes, as to not be in violation, Eaton said. On June 23, the school also filed an application for exemption of the real estate taxes with the county.

By Aug. 17, the Montgomery County Board of Assessment Appeals approved the school’s exemption request. The exemption, however, would take effect Jan. 1, 2012, making the school liable for the 2010 to 2011 taxes.

All three taxes would amount to $132,093.92.

According to Eaton, none of Settlement Music School’s five other branches, located in Philadelphia and New Jersey, pay real estate taxes, due to the school’s nonprofit status.

She further explained that applying in time for the 2010-2011 real estate tax exemptions did not occur, as the $8 million facility in Willow Grove was still under construction during that application’s deadline. Settlement didn’t take possession of the facility until December 2010, and didn’t start accepting students until Jan. 3, 2011.

“These tax bills will be extremely devastating to the school,” Eaton said, adding that Settlement is already operating on a lean budget. “Paying the tax bill will affect services to the broad community.”

As a nonprofit, Eaton stressed that Settlement accepts students, regardless of their ability to pay. Each year, the school annually provides $2 million in financial aid and scholarships to 40 percent of its student body. Of that figure in financial aid and scholarships, the Willow Grove branch has given $125,000 to students this year.

Eaton also described strong community outreach programs, including partnerships with the Upper Moreland Middle School, local senior service centers, its physical therapy program and the Willow Grove community’s invitation to utilize the new facility’s recital hall.

“We’ve always been [tax exempted],” Eaton said, “the entire history of Settlement all of our 103-year history.”

At the committee meeting, it was stated that Settlement is currently taking further legal action at the county level for fully recognizing Settlement’s tax-exempt status in 2010-2011.

According to township solicitor Kate Harper, the committee had two options for recommendations: The township could reimburse the paid real estate taxes now, or hold the reimbursement until the county makes a decision on Settlement’s appeal for retroactive relief on its tax-exempt status.

Should Settlement fail in its appeal, and the township reimbursed the school, Settlement would have to give back the money.

Ward 6 commissioner and chairperson of the committee Sam Valenza said that the committee would draft a resolution, forgiving the real estate taxes owed to the township, but contingent upon the county’s decision on Settlement’s appeal.

Ward 7 commissioner James McKenna, speaking from the audience, state that he was in favor of the committee’s recommendation.

McKenna, who sits on the Willow Grove Settlement Board, added that the township also helped with the school’s construction, by reducing the amount needed in escrow.

Ward 1 commissioner Lisa Romaniello, who also sits on the Willow Grove Settlement Board of Directors, said that it was unfortunate the way the process has been run with the county, as far as the circumstance the school has been put in.

“They moved from Jenkintown in the same county, eight miles north. There’s no reason why they should not be exempt,” Romaniello said. “I’m glad to see the committee is doing the right thing.”


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