Fiscally distressed Luzerne County municipalities identified in new report

By Jennifer Learn-Andes - [email protected] | November 16th, 2017 10:56 pm

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The 286-page Pennsylvania Economy League report has been posted at www.pelcentral.org.

After crunching fiscal and population data from 2,388 local governments across the state, the nonprofit Pennsylvania Economy League gauged the financial distress of municipalities by categorizing them into one of five levels.

The verdict in Luzerne County:

A dozen municipalities were in the bottom group of those most distressed, including all four cities — Hazleton, Nanticoke, Pittston and Wilkes-Barre.

The others were Ashley, Edwardsville, Nescopeck, Plymouth, West Hazleton and three townships — Hanover, Newport, Plymouth.

Those ranked at the bottom had falling revenue, shrinking real estate tax bases and a decline in households, according to the organization’s analysis of data from 1970, 1990 and 2014.

At the other extreme were the healthiest municipalities exhibiting prosperity, with low taxes due to revenue from new development and a limited demand for services, according to the report, which was summarized by the PEL during a gathering at the Westmoreland Club in Wilkes-Barre on Thursday.

Fifteen county municipalities landed in this most favorable group: Harveys Lake, Laflin, Nuangola and the following townships: Bear Creek, Dennison, Dorrance, Exeter, Fairmount, Fairview, Franklin, Jackson, Lehman, Rice, Sugarloaf and Union.

The findings here and statewide revealed much of the wealth has shifted from urban centers to suburban areas, PEL Executive Director Gerald Cross said at Thursday’s session.

For example, the average median household income in county municipalities that made it into the top group deemed fiscally healthy: $69,467.

In comparison, the income was $37,527 in the dozen categorized as most distressed.

“When people move out, they do not take the streets, the sewers, the houses with them,” Cross said during the presentation. “They take their wealth. They take the tax base with them. They leave behind the legacy cost of older infrastructure, older requirements, older homes and the services that have been in place for years to pay for them.”

Another 22 county municipalities were placed in the second lowest category due to evidence of a gap between revenues and expenditures and total municipal revenues beginning to decrease: Avoca, Courtdale, Duryea, Exeter, Forty Fort, Freeland, Kingston, Larksville, Laurel Run, Luzerne, New Columbus, Shickshinny, Sugar Notch, Swoyersville, Warrior Run, West Pittston, West Wyoming and these townships: Plains, Wilkes-Barre, Conyngham, Foster and Hazle.

In the middle group were municipalities experiencing minimal tax base increases and/or ancillary service reductions. The eight municipalities in this category: Hughestown, White Haven, Yatesville and five townships — Black Creek, Kingston, Nescopeck, Pittston and Salem.

The final category, a notch below the most appealing slot, included municipalities with citizen demands for more services and a slowing of new development to boost their strong tax bases. The 13 county municipalities in this group: Conyngham, Dallas, Dupont, Jeddo and these townships: Butler, Dallas, Hollenback, Hunlock, Huntington, Lake, Ross, Slocum and Wright.

The organization did not assess municipalities if it was unable to extract uniform data for all three sample years.

Police a big factor

Cross stressed his organization is not advocating tax increases.

Instead, he urged state legislators to allow municipalities flexibility to customize a menu of taxes based on their demographics, rather than relying primarily on real estate taxes and an earned income levy that is capped and must be split with school districts.

The state also should make it easier and provide an incentive for municipalities to regionalize departments and share services, said PEL spokeswoman Lynne Shedlock.

Backed against a wall, some of the more distressed municipalities have been forced to raise real estate taxes, sell assets and tap one-time revenues to maintain services and “survive in the system the state has created,” Cross said.

The state enacted laws in the early 1800s granting municipalities power over services provided within their borders, he said.

“The flip side of that is, you only have the ability to pay for the services you can afford within your boundary,” he said. “Our laws assume that the wealth and our population is still concentrated in urban areas.”

A significant change in local government taxation options has not been enacted since 1965, Cross said.

Police coverage is another factor.

Municipalities with their own force have twice the tax burden of communities that rely only on State Police coverage, the report said, indicating slightly more than half of municipalities statewide completely rely on troopers.

Seventy percent of municipalities that have their own police department ranked in the bottom category for distress statewide.

Meanwhile, 75 percent of municipalities that rely on State Police coverage were in the top tier for having higher tax bases and lower tax burdens statewide.

The organization encouraged legislators to modernize the “unfair, antiquated system for providing police” in the state. Gov. Tom Wolf and state legislators have proposed a fee for municipalities that rely on troopers full time, Cross said.

Cross
http://www.timesleader.com/wp-content/uploads/2017/11/web1_Gerald-Cross.jpgCross

By Jennifer Learn-Andes

[email protected]

VIEW THE REPORT

The 286-page Pennsylvania Economy League report has been posted at www.pelcentral.org.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.


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