News

November 25, 2008

Taxpayers group questions aid to Boscov’s

One member said bolstering retail business may not provide an economic boost.

By RALPH NARDONE Times Leader Correspondent

SCRANTON -- Members of the Scranton-Lackawanna County Taxpayers & Citizens Association discussed concerns with the recent restructuring of the Boscov’s Department Store chain at a meeting on Monday night.

They said the $35 million state loan and $3 million loans from the cities of Scranton and Wilkes-Barre constitute another “bailout.”

Association President Robert “Ozzie” Quinn said the loans are another example of quid pro quo politics.

Gov. Ed Rendell, Scranton Mayor Chris Doherty and other local politicians received campaign contributions from Albert Boscov, Quinn alleged.

“It is ethical to use taxpayers’ money for a bailout of Mr. Boscov?” he asked.

Officials have said the loans would be financed through a U.S. Department of Housing and Urban Development program that allows governments to guarantee loans for economic development with federal Community Development Block Grants.

Association member Bill Jackowitz said bolstering a retail business may not provide a real economic boost. He cited research from the state Department of Labor and Industry that showed 111,000 full-time retail employees in the state earn approximately $17,000 per year, netting about $1,000 per month.

“Who can afford to live on that?” he said. Retailers aren’t doing very well in Northeastern Pennsylvania, Jackowitz said.

The only winners will be the ones who have money already, he added. If the stores do well, the Boscov family gets richer, he said. If they fail, the Boscov family walks away and the taxpayers take the hit, he said.

Quinn said politicians intimidate the public with the threat of lost jobs to justify the bailouts and set the precedent for future requests from failing companies.

In other discussions, association member Marie Schumacher painted a dire picture of the upcoming assessments in Lackawanna County. The same firm that conducted Luzerne County reassessments, 21st Century Appraisals, will be hired for Lackawanna, she said.

The reassessments may be finished in 2011, she said; however, she warned local residents may want to be prepared for “significant errors.”

She said one-third of the properties in Luzerne County were assessed too high, one-third too low, leaving only one third viable.

Quinn said the last reassessment in Lackawanna County took place in 1968, which adds to the difficultly of getting fair reassessments.

The association also touched on the $400 million state sewer bond recently approved by taxpayers. Quinn said a study of 183 municipalities that require sewer infrastructure upgrades estimated the cost to upgrade around $1.4 billion.

Due to the difference between the $400 million bond and the actual cost, local sewer customers can expect a significant rate hike, he said.

In December, the association will host officials from the sewer authority to discuss the plan in more detail.

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