Property Reassessment

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
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Why should you care about Luzerne County’s upcoming 2009 budget?

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If commissioners don’t get spending on track next year, they will be free to raise county taxes as much as they want in 2010.

Taxpayers didn’t have to stress too much about county tax increases in recent years because the county was at its maximum millage. Commissioners only had power to go to court to get an additional 5 mills, and they haven’t done that since 2003.

But that millage restriction ends with reassessment. The only limit is the first year after reassessment, when revenue may increase 10 percent.

Commissioner Chairwoman Maryanne Petrilla said Thursday that she is determined to prevent 2010 county tax increases “at all costs.” Electrical prices are expected to increase for some area residents in 2010, when rate caps on electrical utilities are lifted, she said.

“With deregulation of utilities, the last thing people will need is a tax increase, too,” she said.

Petrilla said the public should not interpret the postponement of layoffs as a sign that the county will relax a vow to come up with a realistic balanced budget next year.

“While I was very happy and relieved to see the relief on workers’ faces that there’s not a layoff in 2008, I still have a pit in my stomach knowing that layoffs have to be a reality next year in order for us to recover financially,” she said.

County taxes are expected to be about 4.5 mills next year, closer to 5 mills if the county seeks the allowable 10 percent revenue increase. County taxes are currently 94.9 mills, but the millage must be reduced to compensate for the growth in assessed value from reassessment.

A mill is $1 tax on every $1,000 in assessed property. With a 4.5-mill county tax, a property owner with a parcel worth $200,000 would pay $900. The tab would increase to $1,000 at 5 mills.

County Budget/Finance Chief Tom Pribula is already counting on the 10 percent revenue increase to make the budget balance next year. Commissioners would have to vote separately for the increase, and all three say it’s too early to commit.

A 10-percent increase would bring in about $7.7 million. Even with that additional revenue, county officials say spending must be cut 20 percent to make ends meet.

To put it into perspective, a 20 percent cut equates to $29 million of this year’s $146.88 million general fund operating budget.

However, cuts might have to go deeper because of this year’s deficit, Pribula said Thursday.

The 20 percent directive factored in an expected $14 million from debt restructuring next year, but that estimate has been reduced to about $10 million because some restructuring had to be done early to offset this year’s deficit, he said.

Another $6.5 million in carried-over bills were also not included in the 20-percent cut plan, Pribula said. That debt comes from an estimated $4.2 million that must be borrowed from other agencies and a $2.3 million employee pension fund subsidy.

Petrilla said some departments are responding to the county’s predicament. Recent layoff discussions prompted several departments to submit proposals with “substantial budget cuts” next year, she said. The county is scheduled to present a proposed 2009 budget on Nov. 26.

“Some of the agencies have really sharpened their pencils, but we’re still not down to where we need to be,” she said.

While commissioners are aggressively seeking new revenue, cuts will be necessary in all county departments, including row offices and court branches, Petrilla said.

Spending on court branches and row offices made up roughly 31 percent of the county’s operating budget this year.

Pribula estimated that 75 percent of the general fund goes to salaries and benefits.

Row officers and court officials already have hinted that they will pursue legal action if commissioners pass a 2009 budget with severe cuts, arguing that they wouldn’t be able to carry out the duties of their offices.

Petrilla said the county can’t spend money it doesn’t have, and she said the courts must realize that the state continues to ignore its mandate to fund court branches, including court-related row offices.

“Until the state takes over the courts, the courts are going to have to be part of a fiscally responsible team,” Petrilla said.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.