Pittston eyes 4 mill tax hike

PITTSTON – City Council Wednesday night proposed raising real estate taxes 4 mills next year to help pay for fuel, health insurance and other increasing expenses.

The increase is part of the tentative $7.4 million budget for 2008. Council has until Dec. 31 to adopt a final spending plan.

The additional 4 mills would increase the tax rate to 47 mills. A mill is a $1 tax on each $1,000 of assessed property value. One mill generates $31,000 revenue for the city.

Higher fuel costs, health insurance, vehicle insurance on two new fire department trucks, the loss of money on the city’s towing contract and the loss of an estimated $75,000 on a quarterly payment on the $52 local services tax are being blamed for the higher tax rate. The fire trucks are being purchased using grant money.

Two mills will be dedicated to pay the city’s debt, another 2 mills is dedicated to the general fund. The latter 2 mills requires approval by Luzerne County Court.

Council voted to allow the solicitor to request the tax increase. Municipalities must get an increase approved by the court when the tax rate rises above 25 mills.

“We have done everything in our power to cut down on expenses,” Mayor Joe Keating said.

The city never filled three police positions in the last two years when officers left the department. The city also eliminated a traffic control officer for a savings of $33,000 and the cleaning service company for a $15,000 savings. Public works department employees now clean the city’s facilities. The city also saves money by paying City clerk Ron Mortimer a part-time salary with no benefits.

The 2008 budget is an $838,034 increase from the 2007 budget, but only $160,000 of that is an increase in actual expenses, he said.

The city is hoping to take out a $3 million tax anticipation note next year, which must be repaid by the end of 2008. The loan has not yet been approved, but Keating said the city has sent letters to area banks requesting the short-term loan.

Officials are putting that money to work by investing it into a money market account at M&T bank.

The city took out a $2 million tax anticipation note this year, but by putting it into an interest paying account, the city made $60,000 in interest on the loan, Keating estimates. The loan must be repaid by the end of the year.

With Pittston’s tax rate at 47 mills, most of it – 27 mills – will fund general expenses; 11.35 mills goes to pay the city’s debit; 7 mills goes toward pensions, 1 mill goes to the library; 0.65 of a mill goes to the parks.

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Fuel, insurance expenses blamed for increase; court must give approval.

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