Luzerne County property taxes will rise 8 percent next year, preventing a projected 194 layoffs that would have been necessary with no tax hike, a council majority decided Tuesday.
An estimated 38 employees are still expected to be cut to close a remaining $1.4 million 2014 budget deficit without union health care concessions.
Leaders of half of the county’s 10 unions tentatively agreed to the concessions to switch to one insurance provider, increase copayments and add a $500 hospital stay deductible. However, acceptance wasn’t obtained from five unions covering about 45 percent of the county’s 1,450 employees — the prison union and four Teamsters Local 401 unions representing Children and Youth, Aging, Mental Health and assistant public defenders/district attorneys.
The vote for the plan was 6-5. The 8-percent hike increases the county’s tax millage rate from 5.32 mills to 5.7456 mills. That means the owner of a property assessed at $100,000 would pay $42.56 more, with a bill increasing from $532 to $574.56.
The vote for county Manager Robert Lawton’s proposed 8-percent hike — the maximum increase permitted by home rule — was attainable because county Councilman Harry Haas had a change of heart. He recently said he could not imagine raising taxes 8 percent but said after Tuesday’s meeting he has concluded the increase is necessary due to outstanding debt repayments that will total $27 million next year.
Haas also said an 8-percent increase will allow the county to start building a reserve needed to obtain an investment-grade credit rating, which would allow refinancing of future debt at lower interest payments.
“People put their faith in me to make very difficult decisions,” Haas said.
Council members Jim Bobeck, Tim McGinley, Rick Williams, Linda McClosky Houck and Eugene Kelleher also supported the tax increase, with no votes from Rick Morelli, Stephen A. Urban, Elaine Maddon Curry, Stephen J. Urban and Edward Brominski.
The vote for the budget was swift and without comment, though some council members stated their positions earlier in the meeting.
Williams also referenced the need to build a reserve and cover expenses to obtain a credit rating. He said the county’s debt tripled from $100 million to $300 million due to borrowing from 2003 to 2010, and much of that money was treated as a “credit card” to cover operating expenses.
“It’s with a heavy heart that I will be supporting a tax increase. It’s not something I take lightly, but I think it’s necessary for the future of Luzerne County,” Williams said.
Kelleher echoed their sentiments about the debt, saying legislators must allow counties to start imposing a sales tax or some other more “inclusive” revenue option that ends or reduces reliance on property taxes.
“Somehow we have to face this debt head-on,” Kelleher said.
McGinley said he and many others are not pleased with the budget.
“This is the stark reality we face at this time,” he said.
Bobeck said the budget vote would reveal which council members are public servants who make decisions as opposed to politicians who make statements.
Morelli said he’s not afraid to raise taxes when necessary but said council should have been more proactive developing potential savings and new revenue throughout the year. He pointed to council’s decisions to provide one-time bonuses to non-union employees who haven’t received raises in several years and to increase the controller’s salary.
“We are a dog-and-pony show up here,” Morelli said.
Council members agreed they will discuss options to get a better handle on the budget and started by voting to make the administration provide monthly budget reports instead of quarterly ones.
Stephen A. Urban, a former commissioner, said he opposed much of the past borrowing and said a lot of the money went to provide pay increases and other benefits in union contracts, which is why he would support mass layoffs now.
Stephen J. Urban said the income of property owners isn’t keeping pace with the growth of government, and he would only support a budget with no tax hike.
Brominski criticized Lawton, saying he hired him because his resume cited his success cutting expenses and increasing revenue in other areas.
“You’re the manager. You manage, and not by raising taxes or cutting people,” Brominski told Lawton.
Brominski also challenged Bobeck’s right to vote on the budget because it partially funds county human service division contracts with Step By Step Inc. Bobeck’s father, James, is president and chief executive officer of the organization, which provides community support services to people with mental illnesses and intellectual disabilities.
Bobeck said the county ethics commission dismissed two past complaints against him regarding this issue and said he welcomes another complaint. He has maintained he was permitted to vote on the budget because it contained a bulk allotment for mental health that didn’t require council members to decide which providers were funded.
During public comment before the vote, Kingston resident Brian Shiner said he believes some of the procedural actions regarding the budget process did not comply with the county’s home rule charter and said legal action will be filed if council does not correct them. Council did not take any action in response to his assertion.
County Assistant District Attorney Jim McMonagle complained about comparisons of private-sector benefits to those of county employees, saying he receives significantly less pay as a public servant because he is committed to his county work.
McMonagle said many are willing to wait in line for hours to spend hundreds of dollars on the latest electronic gadget but complain about paying the equivalent of $4 a month more to effectively run county government.