WILKES-BARRE ‚?? What feels like a pinch to the city budget could be a wallop to some merchants downtown when 110 employees of Frontier Communications leave for the Back Mountain by the end of the year.
The company last week said that after 11 years it was relocating to consolidate operations at its complex along state Route 309 in Dallas Township, where it had a vacant building and ample parking.
The move comes after the Wilkes-Barre Center building where the company leased six floors lost its designation nearly two years ago as a Keystone Opportunity Zone.
The company‚??s vice president and general manager of Pennsylvania Paul Quick said the expiration of the KOZ was not a factor in the decision to move.
The lifting of the KOZ protection allowed the city to collect its 3 percent wage tax on Frontier employees who are residents. The tax brought in $77,446 in 2010 and $67,199 in 2011, said Drew McLaughlin, city spokesman.
This year‚??s figure was unavailable.
The revenues were miniscule in the city‚??s budgets of $43.8 million in 2011 and $44.8 million in 2012 and won‚??t prompt a drastic rewriting of next year‚??s. The wage tax accounted for $10.9 million in revenue in 2011 and $11.1 million this year.
‚??I don‚??t think it would change budgetary assumptions,‚?Ě McLaughlin said.
But it could force merchants to adjust.
‚??That‚??s where there‚??s more of an immediate impact. Those 110 people have buying power in your city,‚?Ě McLaughlin said.
A short walk through a hallway from their office building led Frontier employees to Pronto Via Pizzeria.
‚??We get a lot of them,‚?Ě Ricky Shkreli, a pizzeria employee said.
‚??It‚??s going to affect the lunch,‚?Ě Shkreli said.
The pizzeria has been open for nearly two years.
Maers BBQ, farther down on South Main Street, opened in January.
‚??Lunch is our busiest time,‚?Ě Rob Burns, co-owner said.
He acknowledged he couldn‚??t say whether Frontier employees patronize the restaurant, adding, ‚??It might affect us.‚?Ě
The loss to the city still meant less revenue for operations.
A review of the city‚??s 2012 budget identified expenses and revenues comparable to the $67,199 in wage taxes collected from Frontier the previous year:
‚?Ę City council salaries, $67,495.
‚?Ę Maintenance of vehicles for the patrol division of police, $65,000.
‚?Ę Urban Redevelopment & Housing non-uniformed salaries, $67,026.
‚?Ę Maternal & child health services salaries, $66,618.
‚?Ę Interest payment on 2008 bond for Coal Street, $66,125.
‚?Ę King‚??s College, payment in lieu of taxes, $61,050.
‚?Ę Wilkes University, payment in lieu of taxes, $63,916.
McLaughlin said the city was working with the property owner Humford Equities and Frontier to fill the space under lease until 2016.
‚??We want to identify sublease applicants,‚?Ě he said.