Where is promised tax revenue, Urban asks

The explosion of new development along Highland Park Boulevard and at the Arena Hub Plaza in recent years is generating tax revenue – about $700,000 for Luzerne County last year alone – but the windfall is still being used to fund infrastructure improvements.

County minority Commissioner Stephen A. Urban said it’s time the county starts receiving its share because the amount of money that was supposed to be set aside under the original 1998 tax diversion agreement has already been collected – and then some.

The 1998 Tax Incremental Financing plan – approved by the county, Wilkes-Barre Area School District and Wilkes-Barre Township – called for $4.7 million in tax revenue from new development in that area to be used to help fund improvements to Mundy Street, Highland Park Boulevard and Coal Street.

About $5 million in collected revenue is in the bank, which should be more than enough to cover debts still owed for Mundy and Highland and significant work on Coal Street, he said.

Roughly $1.6 million remains on the $4.7 million loan to fund the projects, Urban said.

Officials were quoted in 1998 news articles promising that taxing bodies would get to keep the tax revenue if the $4.7 million loan and interest were paid within 13 years.

Urban said the county can’t afford to keep forgoing tax revenue for Coal Street, and he said it’s not the county’s fault if the amount specified in the original agreement is not enough to cover future work on the stretch.

“I believe the idea of extending Coal Street is obsolete and will have no significant economic benefit to the county,” Urban said. “Here the county is raising taxes and there’s $700,000 the county could be saving.”

City officials have said the Coal Street project will provide a direct link from Interstate 81 to the city’s downtown by making the roadway five lanes, eventually connecting it to Union Street.

The tax diversion issue has surfaced because county officials recently learned that the Wilkes-Barre Area School District stopped turning over its revenue for the program in 2006, Urban said.

Garry Taroli, solicitor for the county Redevelopment Authority that oversees the tax diversion program, said the school district had stopped payments, arguing that it had already fulfilled its obligations under the original agreement.

Commissioners were recently asked to approve a tax diversion program amendment that would allow the district to pay a settlement of $3 million through 2013. The amendment says the county will continue turning over its share through 2013. Wilkes-Barre Township’s contribution had been capped at $315,045 under the original agreement.

Commissioner Maryanne Petrilla and former commissioner Greg Skrepenak approved the amendment last month, but Petrilla said county solicitor Vito DeLuca is reviewing the matter.

DeLuca said Petrilla was led to believe that the school district was paying the $3 million in addition to covering payments from the period that the district had stopped paying.

The amendment also wasn’t furnished to DeLuca in advance for his review by the Redevelopment Authority, Wilkes-Barre or the school district, DeLuca said.

“I’m compiling all documents and at some point will recommend to commissioners if this is a good deal or something they should consider rescinding,” DeLuca said.

Urban estimates that the school district failed to turn over $4 million to $8 million during the time it stopped paying, and he faults the redevelopment authority for failing to inform the county and township when the school district’s payments stopped.

Taroli said the authority will carry out any agreement reached by the county, school district and township, as long as there is enough money to cover debt incurred to date.

“The authority literally doesn’t have a dime in this, so whatever the parties want to do, we’ll sign off on, so long as they don’t leave us without money to cover what must be paid,” he said.