2014 budget unveiling is today

Last updated: October 14. 2013 11:37PM - 4925 Views
By - jandes@timesleader.com

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A tax increase and more layoffs are expected in the proposed 2014 Luzerne County budget that county Manager Robert Lawton is unveiling today, according to a source familiar with the budget preparations.

Lawton and county fiscal staffers were at the courthouse on the Columbus Day holiday Monday working on the budget but declined to comment on layoffs or a tax hike, or provide any preliminary details about the spending plan until it is delivered to council.

A proposed tax hike and staff cuts could inject lively debate into the Nov. 5 race for five of 11 county council seats.

Voters may reject candidates who express a willingness to increase taxes, while county workers, who are known to show up at the polls, would be resistant to another round of layoffs.

The four council members seeking re-election won’t be forced to take a position before the election because council’s budget approval vote is not until Dec. 10.

This timing wasn’t by design. The county’s home rule charter prohibits any budget vote before Nov. 15.

The post-election budget vote prevents the seven non-incumbent contenders from critiquing the budget vote of incumbents and means all 11 candidates may be pressed to weigh in on the budget situation.

Can be amended

Council newcomers could have a say in the budget because the charter allows council to amend the budget and tax rate before Feb. 15 in the year after an election.

County taxes are currently 5.32 mills, or $5.32 for every $1,000 in assessed value on a property. For example, the county tax bill is $399 for a property assessed at $75,000 and $798 for one valued at $150,000. Property owners who signed up for the homestead tax break receive $50 off county taxes on their primary residences.

The county’s home rule charter put a cap on tax increases by saying budgeted property tax revenue can’t be more than 8 percent higher than the previous year unless a county judge approves a higher increase. This year’s budget factored in $90.5 million in receipts from property tax revenue.

As of last week, the administration was contemplating a 5-percent tax increase, the source said, but it’s unclear if that’s what Lawton plans to include in his budget.

A 5-percent increase would raise the millage to 5.586, which means taxes would rise $26.60, from $532 to $558.60, on a property assessed at $100,000.

Layoffs pending

The number of proposed layoffs is unknown. Some of the staff cuts also could stem from council’s directive to switch all workers to 37.5-hour work weeks by Jan. 2, except in situations where union contracts must be negotiated to allow the change. Lawton promised to cut workers to cover the cost of paying some to work more hours.

Many employees argue there’s no more room for cuts. Layoffs, outsourcing and unfilled vacancies in recent years have reduced the county workforce to around 1,450 full-timers, compared to around 1,630 employees at the start of 2011.

This is Lawton’s second budget since he became the first home rule manager in 2012.

At this time last year, Lawton promised council a 2013 budget with no tax hike, but he has not made that pledge for 2014.

Though this year’s $121.9 million budget kept taxes flat, it covered a $4.3 million void with a cash advance on unpaid delinquent taxes if necessary — an option known as monetization that has not yet been executed.

Lawton’s inclusion of a tax increase in the 2014 budget may be a means to prevent the county from becoming too reliant on monetizing, though that may be a back-up option if council resists raising taxes or imposing further cuts.

Council had rejected monetization in the 2012 budget because interest and fees are involved in the loan required to provide the up-front cash.

Instead, council imposed a 2-percent hike in 2012 along with about 60 layoffs. That budget also tapped $1.4 million in past-borrowed funds to help repay debt — a one-time fix rejected this year.

Budgeting duties

Once Lawton submits his proposal, council is free to alter spending and revenue as long as the overall total revenue amount is not increased.

Approving a budget is one of the essential duties of the 11-member, part-time council because it sets spending limits for the administration for a year.

The manager doesn’t have to come to council for approval on purchases if he has enough budgeted funds to cover them unless the expenditures would cost the county $25,000 in a future year or $75,000 in two or more years, the charter says.

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