PEL: Scranton Needs More Than 12% Tax Hike

Map of Pennsylvania highlighting Lackawanna County

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

Scranton‘s state-designated recovery coordinator, Pennsylvania Economy League, has told city officials they need to raise property taxes next year higher than the 12 percent that the city budget for 2013 proposes. Exactly how much higher was not stated.

In a letter received Thursday, PEL Executive Director Gerald Cross notes that the city has not dedicated a tax millage toward paying for the city’s second unfunded debt package approved by a court this year, of $9.75 million. In that case, Judge Peter O’Brien, a senior visiting judge from Monroe County, on Oct. 31 ordered that a tax millage be dedicated to paying back this unfunded debt.

It was the same arrangement the city sought and received in January, when a different judge, Senior Monroe County Judge Jerome Cheslock, approved the city’s first unfunded debt, of $9.85 million, and ordered that this amount be paid back with a dedicated tax millage over 10 years.

The first unfunded debt package translated into the 12 percent tax hike in the proposed budget for next year, city officials have said.

Read more:  http://thetimes-tribune.com/news/pel-scranton-needs-more-than-12-tax-hike-1.1413187

Reading City Council Approves Budget, Tax Hikes

Editor’s note:  For those folks in Pottstown, please note that Reading is 4 times as large as Pottstown, yet their budget is only twice as big.

City Council on Monday adopted a $77 million budget for 2013, as well as the increases in property, local earned income and commuter taxes needed to make it work.

• The property tax will rise by 9.45 percent, or 1.355 mills, to a total of 15.689 mills.  An owner with a property assessed at $50,000 will pay an extra $67.75.

• The local earned income tax on city residents will rise by 0.2 percentage points to 3.6 percent.  That rate includes the Reading School District‘s share.

• And the commuter tax will rise by the same 0.2 points, to 0.3 percent.

Read more:  http://readingeagle.com/article.aspx?id=431486

Scranton Mayor Proposes $109 Million Budget For 2013; 12 Percent Tax Hike

Scranton Mayor Chris Doherty presented Thursday to city council a $109.6 million budget that contains a 12 percent real-estate tax hike.

Though formally proposed by the mayor, the budget had been prepared jointly by his administration and the council.  Cooperation between both sides on the budget proposal was a change from the prior two budgets that were marked by heated battles, council revisions, mayoral vetoes and council overrides of vetoes.

Read the Budget HERE

“This is the first step in our financial blueprint as we move the city forward, and I appreciate the cooperation of council,” Mr. Doherty said.

A precursor of the budget had been hashed out earlier this year during the mayor/council war over revising the city’s Act 47 recovery plan, which called for a 12 percent real estate tax hike on city residents and various other tax increases and/or new taxes, such as commuter and amusement taxes.

Read more:

http://thetimes-tribune.com/news/scranton-mayor-proposes-109-million-budget-for-2013-12-percent-tax-hike-1.1404066

Scranton Eyes $20 Million In Borrowing And Second Dedicated Tax Hike For 2013

Scranton City Council on Thursday unanimously introduced a $21 million bond ordinance to fund new debt and an increase in mandatory pension contributions and refinance old debt.

While the introduction was unanimous, council had questions about the bond proposal and agreed to ask administration officials to attend an upcoming caucus to explain it.

Mayor Chris Doherty wanted council to adopt on an emergency basis this legislation and another ordinance for a dedicated tax increase to pay for $9.75 million in unfunded debt, council President Janet Evans said.

However, because council received the ordinances late Wednesday, she said, council and its solicitor, Boyd Hughes, had not had enough time to review them and refused to enact them on an emergency basis – which requires introducing, advancing and adopting them all at the same meeting.

Read more:  http://thetimes-tribune.com/news/scranton-eyes-20-million-in-borrowing-and-second-dedicated-tax-hike-for-2013-1.1401050

Pittsburgh Targets Ending Financial Oversight (Act 47)

English: Senator Bob Casey (D-PA) meets with P...

English: Senator Bob Casey (D-PA) meets with Pittsburgh Mayor Luke Ravenstahl. (Photo credit: Wikipedia)

After eight years of austerity, the city of Pittsburgh today will argue before a state panel that it has clawed its way to financial recovery and needs fewer mentors looking over its shoulder.

A public hearing on ending the city’s financially distressed status, and disbanding one of its oversight groups, begins at 4 p.m. in the city council chamber.

As of Friday, officials hadn’t decided whether to televise the hearing.

Mayor Luke Ravenstahl and his team will have 20 minutes to argue that establishing a trust fund for retiree health care, improvements to the capital budget process and bond rating upgrades, among other factors, warrant the city’s exit from Act 47, the law that imposes monitoring and financial restrictions on distressed municipalities.

Read more: http://www.post-gazette.com/stories/local/state/pittsburgh-targets-ending-financial-oversight-659655/#ixzz2AjL63Hnp

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

Budget Rift Deepens Between Reading And Act 47 Consultants

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

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

The rift between the city and its outside consultants, hired by the state to enforce the city’s Act 47 financial recovery plan, got deeper Wednesday as Mayor Vaughn D. Spencer’s administration and City Council worked on the proposed 2013 budget.

The community development department wants to spend more money next year, offset by higher fee revenues.

The consultants, led by Philadelphia-based Public Financial Management Inc., have told the city to work harder on cutting expenses before seeking new ways of raising money.

“Do we need PFM’s permission to do that?” city Auditor David M. Cituk asked of the higher spending plan.

Read more: http://readingeagle.com/Article.aspx?id=421732

$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

University Of Scranton Refuses To Pay New City Parking Tax

The University of Scranton is suing the city over a new tax city officials enacted this year on parking garages and parking lots and is refusing to pay it until a judge weighs in.

The university filed suit in Lackawanna County Court on Friday, asking a judge to declare the university – a nonprofit – exempt from the city’s 15 percent tax on parking facilities where patrons pay to park.

City officials have said the tax is critical to bringing in more revenue for the financially distressed city.  Council’s 2012 budget estimates the tax will bring in $500,000.

If a judge ruled in the university’s favor, city Business Administrator Ryan McGowan said the city would lose out on a “substantial amount” of revenue from the tax.  He could not immediately provide specific numbers when contacted about the suit Friday afternoon.

Read more: http://thetimes-tribune.com/news/university-of-scranton-refuses-to-pay-new-city-parking-tax-1.1369775

Scranton’s Payday Hinges On Loan Closing

Scranton‘s next employee payday on Friday hinges on a loan closing on Thursday, city officials said.

Mayor Chris Doherty expressed confidence that the closing between the city and Amalgamated Bank of New York and Washington, D.C., would occur as scheduled Thursday and payroll would be made Friday.

“Everything seems to be on track” with the loan and payroll, Mr. Doherty said.

On Aug. 23, the mayor and council President Janet Evans announced the city had secured a $6.25 million tax-anticipation note loan from Amalgamated Bank, which bills itself as the largest union-owned bank in the country.

Read more: http://thetimes-tribune.com/news/scranton-s-payday-hinges-on-loan-closing-1.1365473

Scranton Gets $6.2M Short-Term Loan; State Sets Public Hearing On Plan For Today

Editor’s note:  We are pleased to see that the mayor and council president have put aside their differences and are working together.  It’s making a difference!

Like dominoes falling, Scranton has finally adopted a revised recovery plan, and because of that the city now will receive a $2.2 million state aid package and a $6.25 million short-term bank loan that will allow the city to pay bills and payrolls while continuing to seek long-term borrowing to fund its 2012 budget.

The flurry of separate, yet related, developments has bought the city some time to resolve its short-term financial crisis, however the city still needs to secure other borrowing to end the year in black, Mayor Chris Doherty and council President Janet Evans said.

The stage was set with the city’s proposed revised recovery plan having received approval in recent days from its Act 47 recovery coordinator, Pennsylvania Economy League.  That approval will allow the city to receive the $2.2 million state aid package from PEL’s overseer, the state Department of Community and Economic Development.  With PEL and DCED on board with the city’s recovery plan and the state aid package on the way, the city was able to secure on Wednesday night a $6.25 million tax- anticipation note from Amalgamated Bank of New York and Washington, D.C., the mayor and Mrs. Evans announced late Thursday afternoon in front of City Hall, shortly before the council meeting.

“This buys us time,” Mr. Doherty said of the bank loan and state aid package.  “With the recovery plan being passed, it sends a positive message for our future borrowing.”

Read more: http://thetimes-tribune.com/news/city-gets-6-2m-short-term-loan-state-sets-public-hearing-on-plan-for-today-1.1363190

Scranton City Council Holds Hearing On Recovery Plan

In a first in several years, Scranton Mayor Chris Doherty on Thursday attended a city council meeting that was a public hearing on their joint revised recovery plan.

The mayor – who usually bears the brunt of a barrage of negative comments and criticism from council and some regular attendees at weekly council meetings – had not attended a council session in about six years, council President Janet Evans said.

However, the city’s financial crisis has finally made for some strange bedfellows between the mayor and council majority, who usually are mortal political enemies. After months of a bitter mayor/council stalemate over revising the city’s Act 47 recovery plan that would be acceptable to banks and the city’s recovery coordinator, Pennsylvania Economy League, the mayor and Mrs. Evans reached an accord July 27. As a result, she said she asked the mayor to attend the hearing, and he agreed.

“It was a milestone,” Mrs. Evans said of the mayor’s appearance. “We’re very pleased to be working with him.”

Read more: http://thetimes-tribune.com/news/scranton-city-council-holds-hearing-on-recovery-plan-1.1360066

Bipartisan Effort Shapes Action On City Distress Issues

HARRISBURG – While the city of Scranton struggles daily with cash-flow problems, key state lawmakers see any unveiling of comprehensive legislative proposals to help fiscally distressed cities as being months away.

A rollout of bills is anticipated early next year with the start of the new legislative session, said Sen. John Eichelberger, R-30, Hollidaysburg, chairman of the Senate Local Government Committee.

A bipartisan group in the Senate and House is working on a host of related issues, including an overhaul of the Act 47 program for fiscally distressed municipalities, municipal pension benefits, collective bargaining for public employees and the role of nonprofit institutions clustered in cities.

Since four legislative committees held joint hearings last fall on the future of Act 47, lawmakers involved in the effort to find solutions to the problems cities face with eroding tax bases and increased demand for services have emphasized its bipartisan nature.

Read more: http://thetimes-tribune.com/news/bipartisan-effort-shapes-action-on-city-distress-issues-1.1357868

Businesses Worry Over Scranton’s Deepening Financial Crisis

Between sips of soda at Sal’s Pizza on Linden Street, Nick Noll recounted his time as a Scranton business owner.

His business, Keystone Granite and Marble, was on Diamond Avenue in Scranton but moved to Old Forge earlier this year as he saw deepening financial problems and grew tired of the business privilege tax.

“As soon as I moved to Old Forge I felt like I received a raise,” Mr. Noll said. “It no longer became a question of whether or not I should pay my taxes or take my family on vacation.”

Mr. Noll said the increase in the gross receipts tax proposed in the city’s revised recovery plan from 0.75 percent to 1 percent is “counterproductive” to bringing business back into the city.

Read more: http://thetimes-tribune.com/news/business/businesses-worry-over-deepening-financial-crisis-1.1354898

Scranton Embroiled In Dispute Over Another Short-Term Loan

Facing yet another cash-flow crisis, Scranton is trying to borrow a $2.75 million tax-anticipation note to pay routine daily bills and payroll.

The city administration has been negotiating with Landmark Community Bank for the TAN, but city council has balked at the bank’s demand that, in exchange for a TAN, the city must back an unsecured $2.95 million loan that the bank gave to the Scranton Parking Authority last year, council members said at Thursday’s meeting.

TANs are fairly routine, short-term loans that municipalities borrow to cover cash-flow gaps until tax revenues come in. However, the TAN dust-up is another example of how little is routine when it comes to the city’s long-standing fiscal challenges and divisions between the administration and council.

City held hostage?

Read more: http://thetimes-tribune.com/news/scranton-embroiled-in-dispute-over-another-short-term-loan-1.1293590#ixzz1qqTjMwfK

Harrisburg Moving Closer To State Financial Takeover

The Pennsylvania House of Representatives voted 185 – 9 in favor of a bill that will allow a state-appointed receiver to take control of Harrisburg’s finances.

It is also very liked this bill will overwhelmingly pass in the PA State Senate!

Harrisburg is a financially distressed community under ACT 47.  City Council has refused to comply with recommendations made by the Act 47 team and the mayor’s proposal was also vetoed.

PA State Senator Jeff Piccola is leading the charge for a state takeover.  Harrisburg is hundreds of millions of dollars in debt from a failed incinerator retrofit.

Governor Corbett is expected to sign the bill when it reaches his desk.

Harrisburg Mayor Linda Thompson’s Recovery Plan Gets Cool Reception From City Council

Harrisburg, Pa — It may be a difficult road ahead for Harrisburg’s latest financial recovery plan, as several council members tonight voiced significant concerns over Mayor Linda Thompson’s Act 47 alternative.
 
Councilman Brad Koplinski complained that the mayor did not explore the potential of implementing a 1 percent, county-wide sales tax, nor did her plan include any concessions from bond insurer AGM…
 
To read the rest of the article and other coverage of Harrisburg’s Act 47 status, click here:
 
 

Camden, New Jersey: Enter At Your Own Risk

Camden, New Jersey is one of the poorest citie...

Image via Wikipedia

Camden, New Jersey was just ranked the second most dangerous city in the United States.  A 2009 estimate census showed Camden’s population at 78,790.  Camden has a police force of 373 or one officer for every 211 people (This figure does not include civilian employees). The US average is one officer per 333 people.  The land area of the city is 8.8 square miles. 

Six months ago, 50 new officers were hired to beef up security for the beleaguered city.  Now it appears that on January 18th, up to 180 officers could be laid off.  Camden is financially distressed and is asking the officers to take a 20% pay cut.  Police sources say the pay cut approaches 35% with all total concessions.  Some of the new officers are wondering why they were hired in the first place.  On a positive note, there are other cities lining up to recruit any laid off Camden cops.  Nashville, Atlanta and Norfolk are interested in hiring any Camden law enforcement budget casualties. 

Camden has been in a free fall for decades.  Major employers like RCA, Campbell’s Soup and New York Shipbuilding employed well over 50,000 people.  Camden’s population peaked in 1950 at 124,555 residents.  The 2009 estimate shows a net loss of 45,765 residents since 1950 or about 37%.  By comparison, the state of New Jersey’s population has nearly doubled since 1950. 

41.7% of Camden residents lived in poverty in 2008.  Camden was ranked as American’s poorest city in 2006 when 52% of its residents lived in poverty.  By contrast, New Jersey had the nations second highest per capita personal income in 2008, the highest percentage of millionaire households and is second in the US for towns/cities with per capital incomes above the national average (76.4%).

Camden’s median household income was estimated at $24,283 per year in 2008 (NJ $70,378).  The estimated per capita income for Camden in 2008 was $10,771.  In April 2010 the unemployment rate in Camden was 18.1%, compared to 9.6% for the state of New Jersey.  

Camden scored a 967.6 crime index on City-data.com for 2009.  There were 34 murders.  In 2008 Camden scored 1114.6 and had 54 murders.  As we learned in my earlier post about crime stats, a score of over 700 is considered HIGH and a score about 1000 is considered VERY HIGH.

So what will become of Camden if, worst case scenario, 48% of their officers are laid off!  Or even if only 25% are laid off.  I shudder to think!

Enter at your own risk! 

(Demographic data taken from Wikipedia and City-data.com.)

Harrisburg Authority Plays Tooth Fairy To City

Streetscape of 1400 block of 2nd street in Har...

Image via Wikipedia

The Harrisburg Authority has unanimously approved a payment to financially distressed Harrisburg City in the amount of $3.8 million dollars! 

The Authority, you may remember from earlier posts, created the $288 million dollar debt on the incinerator which has all but sent the capital city of Pennsylvania to the poor-house.  By some stroke of luck or Divine Intervention, the Authority has funds a-plenty in its water division.  The Authority is assuring the public that their “gift” to Harrisburg will not raise water rates for 2011, exhaust reserves or threaten capital projects

Seems only fitting that the Authority comes up with the money.  This infusion of capital reduces the city’s year-end deficit to a more manageable $1 million dollars. 

The $3.8 million dollars will be used toward city payroll and a big stack of unpaid bills!

Kudos to The Authority for doing the right thing by the citizens of Harrisburg!

Harrisburg May Not Make Payroll For City Employees

Recreation of the flag of the city of Harrisbu...

Image via Wikipedia

A bad situation is getting worse by the minute.  Harrisburg has 557 employees and the payroll is $1.2 million.  Payroll is due next week and the city has $492,000.00 in the bank.

Fast Eddie and Linda Thompson are scrambling to find lenders to cover the payroll gap but lenders are skittish about investing in Harrisburg.  Not just because of the incinerator debt but also because of the fighting between the mayor and council.  There is no clear plan in place to get Harrisburg out of the mess they find themselves in.  There is a lot of rhetoric and finger-pointing but no good solutions seem to be forthcoming.

 Somebody needs to take control of this rapidly deteriorating situation!