HARRISBURG — People who work in Scranton and other distressed municipalities could see a $52 annual tax triple under a new Senate amendment.
Lawmakers want to steer Act 47 municipalities to levy a higher local services tax as an alternative to a commuter tax.
The distressed cities legislation cleared a first Senate hurdle Wednesday with a comprehensive amendment added by the Local Government Committee.
The committee’s action is the latest step in an effort to overhaul the Act 47 program for fiscally distressed municipalities. Scranton, Nanticoke, West Hazleton and Plymouth Twp. have Act 47 status. Shamokin is seeking to enter the program.
Map of Pennsylvania, showing major cities and roads (Photo credit: Wikipedia)
All 53 of Pennsylvania’s third-class cities share common bonds, and one state senator believes legislators who represent those cities should band together to help address their common challenges.
“Sprawl, changing demographics, public safety concerns and archaic tax structure have drained the vitality of our once-vibrant downtowns,” state Sen. John N. Wozniak, D-Johnstown, wrote in a letter to his colleagues. “Since the causes are not unique, we can’t stand by and ask local government officials to stem a tide that is overwhelming their capacity and authority to innovate.”
Wozniak noted in the letter to colleagues from both parties in the Senate and House that while the state’s historic downtowns are unique, the fiscal problems they face are not. With that in mind, Wozniak is proposing the creation of a bipartisan “Third-Class City Caucus.”
“We can no longer afford to consider the plight of our cities as a concern that is separate from the overall welfare of our Commonwealth,” he said.
Scranton City Council on Thursday tabled a revised recovery plan but set a public hearing on the proposal for next week and a vote for adoption for the following week.
Council President Janet Evans said efforts are under way to further revise the consensus recovery plan. It was reached July 27 by her and Mayor Chris Doherty after months of stalemate, but raised concerns from the city’s Act 47 recovery coordinator, Pennsylvania Economy League, that much of its revenue was speculative.
“There are adjustments being made to it, and it’s ongoing,” Mrs. Evans said. “I’m hoping that all changes are complete prior to the public hearing.”
At the Aug. 2 meeting, Mrs. Evans said the mayor/council consensus plan was a “take it-or-leave it” proposition for PEL. Asked after the meeting if she had backed away from that stance, Mrs. Evans said no.
The City of Scranton, Pennsylvania’s seventh largest city, is a distressed municipality under Act 47. Further hampering Scranton’s recovery efforts are the 40-year-old property assessments being used by Lackawanna County. These out-dated assessments are literally starving Scranton for cash. Scranton is facing a $5.2 million dollar deficit in 2011 and $5+ million dollar deficits for several more years down the road. In the last 16 years the assessment value of city properties has increased less than one percent while market values have risen 35%!
The other sad part of the story is the nobody has the $8 million dollars to pay for the reassessment implementation. The reassessment has been completed and it will take about six months to get an acceptable range. However, this is useless information until funding is secured.
Scranton and Lackawanna County need to find a way to pay for the implementation. As the largest city in Lackawanna County and the Scranton/Wilkes-Barre Metropolitan Area, Scranton can not be allowed to go under. The burden of a failed city will fall on every taxpayer in Lackawanna County and beyond. We all will have to pay through increased taxes and fees.
As a distressed city under Act 47, where is the Commonwealth of Pennsylvania in all of this? Some help is needed here if we ever want Scranton to recover and get off Act 47. Our cities are vital to the prosperity of Pennsylvania. Considering some of the crap in the state budget, I would think we could find money to fund or partially fund something as important as this.
Just a few short months after the City of Reading was accepted into Act 47, the Borough of Dunmore is teetering on the brink. Dunmore, which is an adjacent suburb to the City of Scranton, has a population of 14,000 and is on the verge of bankruptcy. Dunmore has accumulated $14.5 million in long-term debit and is facing an increase in expenditures for 2011 of $550,000.00.
Evidently the Commonwealth has reached out to Dunmore for over a year but those overtures fell on deaf ears. Many on Council did not even know that help was offered. Sounds like some Sunshine Law violations, but we digress.
In another interesting coincidence, the City of Scranton is also under Act 47 and has been since 1992! Dunmore and Scranton are contiguous.
Dunmore’s Council is debating whether or not to go the way of their much larger neighbor and seek protection under Act 47 or come up with their own recovery program.
Pennsylvania’s 5th largest city (Reading) has been accepted into Act 47 which is a program for financially distressed municipalities. Ironically the announcement was made at a breakfast at the Berkshire Country Club this morning.
George Cornelius, secretary of the Department of Community and Economic Development met with Reading Mayor Tom McMahon and adminstration officials Wednesday evening. Cornelius wanted to meet with Reading City Council Wednesday night as well. However City Council refused to meet with Cornelius in a closed meeting stating it would violate the Sunshine Law.
Act 47 provides the distressed municipality with help in formulating a recovery plan as well as less restrictions in terms of operating regulations, taxing and negotiating powers.