PEL: Scranton Faces $20 Million Deficit Next Year; Needs To Raise Taxes

Map of Pennsylvania highlighting Lackawanna County

Map of Pennsylvania highlighting Lackawanna County (Photo credit: Wikipedia)

Scranton city government’s budget outlook for next year continues to worsen as the city now faces a possible deficit of nearly $20 million for 2014, according to the city’s financial-recovery coordinator.

That state-appointed Act 47 coordinator, Pennsylvania Economy League, also urges the city to craft a “realistic and responsible” budget for next year that closes the structural deficit and lists as options unspecified hikes in both the real-estate (property) and earned-income (wage) taxes, and an increase in the city’s annual garbage fee.

“I think the letter speaks for itself,” Mr. Cross said in a phone interview. “It shows where the city is in terms of recovery-plan progress and shows the challenges that we always spoke of for 2014 being a challenging year.”

Read the letter here

City Business Administrator Gina McAndrew said the 2014 budget is in the works. She would not rule out any increases in taxes or fees but declined to say what may be under consideration.

Read more: http://thetimes-tribune.com/news/pel-scranton-faces-20-million-deficit-next-year-needs-to-raise-taxes-1.1566385

Reading City Council, Administration Haggle Over Several Issues At Budget Meetings

A 1947 topographic map of the Reading, Pennsyl...

A 1947 topographic map of the Reading, Pennsylvania area. (Photo credit: Wikipedia)

How essential are the nine full-timers and three part-timers that Mayor Vaughn D. Spencer wants added to the proposed 2014 budget, including a media manager, a post that was so controversial last year?

Does the city want to keep $500,000 on reserve yet another year for the Central Pennsylvania African-American Museum’s proposed expansion, or use that money to spruce up parks?

Is the city’s outside consultants’ report – on Spencer’s plan to shift the property tax to a land-value tax – an endorsement of that plan?

Should the city drop earned income and commuter taxes by 0.1 percent as planned, or keep them flat because of coming budget woes?

Read more: http://readingeagle.com/article.aspx?id=515907

Wilkes-Barre In Better Financial Shape Than Last Year

Map of Pennsylvania highlighting Luzerne County

Map of Pennsylvania highlighting Luzerne County (Photo credit: Wikipedia)

WILKES-BARRE, PA — More than halfway through the fiscal year the city is in better financial shape compared to the same period in 2012, officials said Friday.

Revenues are up by more than $7 million, largely because of a 25-mill property tax increase and the payment of 2012 wage taxes that had been delayed by problems at CENTAX, the former collection company.  As a result, there are no plans to furlough workers to make up for a revenue shortfall.

“There is no manufactured financial crisis by a collection mishap by a third-party vendor,” said Drew McLaughlin, the city’s municipal affairs manager.  “Revenue projections are holding steady so far, so we are very, very cautiously optimistic in terms of our financial position this year.”

Still, he cautioned things could change should the weather bring on an unpredictable expense caused by flooding from a tropical storm or snow in the winter.  “We’re at the mercy of Mother Nature there and we proceed cautiously,” he said.

Read more: http://www.timesleader.com/news/local-news/759265/Wilkes-Barre-in-better-financial-shape-than-last-year

Reading City Council Closer To 2013 Budget, Size Of Tax Hikes

A 1947 topographic map of the Reading, Pennsyl...

A 1947 topographic map of the Reading, Pennsylvania area. (Photo credit: Wikipedia)

The city on Wednesday inched closer to a 2013 budget that would raise earned income and commuter taxes and reduce a property tax hike.

However, officials are facing critical deadlines this month to finish the deal.

“We’re close,” said Councilman Jeffrey S. Waltman Sr., who added that the budget could be wrapped up with a few more sessions. “We can’t miss those deadlines.”

Not so fast, said Council President Francis G. Acosta and Councilwoman Donna Reed, chairwoman of the Finance Committee.

Read more: http://readingeagle.com/article.aspx?id=426039

Reading Considers Consultant’s Proposal For Budget

The city of Reading and its outside consultants have come up with a new tax plan using a complex and untested state law to pay for the 49 percent hike in pension contributions the state is requiring it to make in 2013.

Essentially, Act 205 says cities facing sudden dramatic pension-cost increases can levy a so-called distressed pension tax, either as a separate property tax or a separate earned income tax. But every nickel collected has to be used to pay off that obligation, not spent anywhere else.

At City Council’s Wednesday night budget session, the consultants recommended applying it to the earned-income tax – using the same rate for both residents and commuters – since the administration and council don’t like the 15 percent property tax hike that’s already in the budget.

Gordon Mann, a consultant for Public Financial Management who is leading the team, said the tax cap is based on a complex formula comparing pension contributions and city payroll for three years.

Read more: http://readingeagle.com/article.aspx?id=424643

Reading Now Eyeing Bigger Increase In Property Taxes

Mayor Vaughn D. Spencer’s administration said Monday that the Reading’s 2013 budget might need not only increases in the earned-income and commuter taxes but also a higher property tax hike: 20 percent instead of 15.

City Managing Director Carole B. Snyder said she doubts the city will need all three increases.

But she also said it’s better to get enabling ordinances ready now and cut them later if circumstances allow because the taxes can’t be raised later without starting the process over.

“We’re setting the stage, so we can get a balanced budget,” Snyder said.

Read more: http://readingeagle.com/article.aspx?id=422741

$2 Million Drop In Reading Revenue Predicted

Reading’s outside consultants told City Council on Monday that total city revenues likely would drop by $2 million from 2013 to 2017, largely because of shrinking property tax money and a recovery plan calling for cuts in the earned-income tax rate.

The property tax, at $18 million, and the earned-income tax, at $13 million, are the two largest city income sources, said Gordon Mann, senior consultant with Public Financial Management Inc., Philadelphia, which is leading the state-hired Act 47 financial recovery team.

He said the problem with the property tax is that assessments essentially are flat, but about a half-percent of city properties go tax exempt each year.

More than 30 percent of city properties now are tax exempt.

Read more:  http://readingeagle.com/article.aspx?id=415184