HAZLETON – Mayor Joe Yannuzzi on Tuesday made his case for enacting an 83-percent property tax increase in 2013.
The situation that Hazleton is in is very serious and I just thought we should have the administration have the opportunity to explain our side and discuss the budget in a different setting than the other night (at a council meeting). There was a lot of shouting and not much got accomplished, Yannuzzi said at an impromptu press conference at City Hall.
Yannuzzi and newly hired city administrator Steve Hahn reiterated that a $580,000 decrease in the annual installment payment from the sale of city land to a developer in 2013 coupled with the loss of $300,000 in sewage transmission fees next year necessitate the brunt of the proposed tax hike.
The state Department of Environmental protection required the city (and other municipalities) to turn over responsibility for sewage transmission to the Greater Hazleton Joint Sewer Authority next year. Because the city can no longer collect sewage transmission fees, $300,000 of that revenue the city had been using to repay a loan for work on sewer lines will disappear.
And, the city has to make a $426,000 payment on a $5.6 million loan taken out in 2011 to pay back tax anticipation notes and old bills. The 2012 payment on that loan was made with part of the $5.6 million that was borrowed in 2011.
There's an old saying: Don't shoot the messenger. I am the messenger. I'm bringing this to the public. This situation is the way it is in the city of Hazleton, Yannuzzi said. Also, don't blame the employees of Hazleton. I notice most of the stuff that's being written now is blaming them, and they are not part of it.
Yannuzzi said the city tax rate was frozen by state law at 25 mills from 1973 to 2010, after the Luzerne County reassessment.
What we did is we had creative ways to create revenue. … We supplemented taxes by selling assets like the amphitheater land at $600,000 a year. That was a great move. It saved the taxpayers millions of (dollars in) taxes for those years. That has come to an end, Yannuzzi said.
Yannuzzi said former Mayor Lou Barletta proposed selling the assets of the Hazleton City Authority Water Department when Yannuzzi was council president.
At that time, we told the public that someday you're going to get a big tax increase if we don't (sell the water company assets). Well, today, Hazleton has hit the fiscal cliff. Something drastic has to be done in 2013, Yannuzzi said, adding that he believes the sale should be considered in 2013 so the city can benefit in 2014 and subsequent years.
If this budget is not approved, the consequences will be far reaching. It will affect our ability to get a tax anticipation note, which we need for next year or any other loans in the future. That was stated to us by the banking industry, that if we don't have a taxing budget in place, we're not going to receive any consideration for loans, he said.
The mayor also said all city departments are at bare bones.
Yannuzzi supplied a handout showing 2012 budget amounts for other cities.
Similarly sized Lebanon, with a population of 25,477, had a budget of $24.9 million compared to Hazleton's $7.7 million. The cost per resident in Hazleton, with a population of 25,340, is $302 compared to $978 in Lebanon. Wilkes-Barre has 41,498 residents, a budget of $44.8 million and a cost per resident of $1,080.
Yannuzzi also supplied a handout comparing property taxes between cities.
Last year, at 3.11 mills, Hazleton received $311 in property taxes for every $100,000 in assessed home value in the city. Nanticoke, with a population of 10,465, taxed $444 per every $100,000 in home value; Altoona, with 46,310 residents, taxed $798 per every $100,000 in home value; York, with 43,718 residents, taxed $1,755 for every $100,000 in home value.
Hahn said the proposed increase of 2.58 mills doesn't seem to be quite as much … when you compare that tax number to other communities and look at what you get for that … fire protection, police protection and the basic necessities of a well-rounded community.
And Yannuzzi said the community will suffer without a tax increase, which amounts to about $258 more in annual taxes on a $100,000 home, because layoffs will be necessary.
Council is set to vote on the first of three readings of the budget at a meeting at 5:30 tonight.
The state of the City of Hazleton really will deplete if this budget isn't passed. If we have to take $2 million out of $7 million, it will be overrun by unwanted people. … You'll call the police and they won't come. That's what's going to happen because at the demand they are at right now, they're just about keeping up with the calls they have, he said.
We're at the point where we're just surviving, we're keeping the town safe. But we're stretched. If anything changes that, any reduction changes it, the residents and the city are going to suffer, he said.