Upper Moreland School Board Considers Settlement Music School’s Tax Exemption Request

The Upper Moreland School Board discussed a tax exemption request from Willow Grove’s at the Budget/Finance Committee meeting Sept. 20.

Helen Eaton, executive director of Settlement Music School, brought the request to the board’s attention. Eaton asked the board for retroactive relief and to exempt the nonprofit music school from paying non-assessed property tax for 2010 and 2011.

The board decided to push the discussion item until more information is available, but made it clear that the board would not grant exemption.

“We [the board] generally follow what the county [Montgomery County Board of Assessment] says when it comes to tax assessments,” said Richard Latta, treasurer, “If you have an appeal with the county, then it should be dealt with at the county level.”

According to Jerry Goodman, trustee and member of the Central Board of Settlement Music School of Philadelphia, the nonprofit organization has received tax-exempt status for 2012. However, the school filed for tax exemption June 23, 2011.

“We just filed with the county for relief last week, and someone from the county said they would go along with the school board,” Goodman said. 

Goodman said that the property tax was assessed in November 2009, and Settlement received its certificate of occupancy in 2010. Classes started in January.

On April 15, Settlement received a 2010 Interim School Real Estate Tax in the mail for $31,171.55. Then, a second letter posted $17,533.09 for an Interim County & Township Real Estate Tax. Both were due Aug. 13, 2011.

Easton said Settlement representatives had a hearing in Norristown Aug. 3. At that time, the institution remains liable for all three real estate tax bills at $132,093.92.

“I request school board grant us retroactive relief,” Eaton said. “Being required to pay the tax would be devastating to the school, which runs on an extremely lean budget. Eighty-eight percent of our budget is tied to fixed cost.”

The Settlement branch is located on 318 Davisville Road in Willow Grove. In the fall of 2010, Settlement began building a new branch in Willow Grove, and in January 2011, the Willow Grove Branch replaced the leased facility in Jenkintown.

“[The] process is confusing,” Eaton said. “These are exceptional circumstances. We ask you to reconsider and didn’t expect this. This tax would be a serious blow to us.”

David Hakes, school board president, then asked what was Settlement’s overall financial situation. Eaton responded that school takes in approximately $600,000 and shells out $125,000 in aid.

“Last year was a tough year, and we’re in a lean state,” Hakes added. “If we cut a check now, what programs would we have to cut with our kids?”

Goodman said that Settlement paid all of its taxes when the Willow Grove site was a vacant lot. He only asked for relief for years the site was being used for nonprofit purposes.

“This puts us in a binding case,” Donald Warner, school board vice president, said. “If we grant an exemption now, we open the floodgates. If the county says yes, we definitely will pay it all back.”

Superintendent Robert Milrod suggested having Montgomery County Board of Assessment come in for a presentation to clear up some tax assessment issues.

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Read more about Settlement Music School

For more information on Settlement Music School, visit www.smsmusic.org or call 215-320-2630.