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Luzerne County’s proposed 2018 budget unveiling is a week away, and the administration has not ruled out a suggested tax hike.
“All options are on the table right now,” county Manager C. David Pedri said Monday. “Obviously we take this very seriously, and we would not ask for a tax increase lightly.”
Pedri said he will present his proposed budget at county council’s Oct. 10 meeting instead of waiting until the Oct. 15 submission deadline in the county’s home rule charter.
This year’s $134.85 million general fund operating budget included a 4-percent real estate tax increase.
The administration has been attempting to come up with a plan to absorb several unavoidable spending increases in 2018, Pedri said.
He cited health insurance as one example, reserving the specifics until his council briefing. This year’s budget earmarked $10.58 million for employee health coverage.
The employee pension fund subsidy also is projected to rise by $800,000 in 2018, Pedri said.
The county paid $8.1 million to shore up the pension fund this year, which did not include contributions from other departments that receive outside funding, officials said. The subsidy has increased hundreds of thousands of dollars annually and is pegged at nearly $9 million in 2018, Pedri has said.
“We made great strides financially, but we’re not out of the woods,” he said.
Division heads will continue working with Pedri over the next week to identify cuts and new revenue, he said, stressing council members have the final say.
Council has scheduled several work sessions before the Dec. 12 budget adoption.
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.
“What we present is a starting point,” Pedri said of his proposed budget.
The owner of a property assessed at $100,000 pays $597.54 in county taxes under the current rate, which is 5.9754 mills. A mill is $1 tax for every $1,000 in assessed value.
This year’s tax increase, which boosted revenue $4.2 million, was necessary to strengthen services and cover rising health care and pension costs and union-negotiated raises, the administration had argued.
A council majority previously voted to raise taxes twice since the customized home rule government structure took effect in January 2012.
The first was a 2-percent hike in 2012 — part of a package that also included approximately 60 layoffs and the tapping of $1.4 million in past-borrowed funds to help repay debt. That amended budget replaced a version inherited by prior commissioners that contained unattainable revenue, required 140 layoffs and would have prompted litigation from court branches over deep cuts, the administration said at the time.
An 8-percent tax increase in 2014 — the maximum hike permitted by home rule — was blamed heavily on debt repayments from past borrowing and needed to avoid a projected 194 layoffs, officials had said.
In 2012, the county’s millage rate was 5.32, which means the owner of a $100,000 property paid $532, or $65.54 less than today.
Council last year also permanently ended a county-funded homestead tax break for owner-occupied residences that had been halted in 2015 because county officials did not identify $4.7 million to fund it annually. Homestead participants had saved $45 to $57 on their county real estate taxes annually through the break that started in 2009.