Pedri details proposed no-tax-hike 2021 Luzerne County budget

Luzerne County Manager C. David Pedri cited real estate tax base growth as a major reason he was able to propose a no-tax-hike budget for 2021.

Two factors have led to a $2 million increase in county real estate tax revenue next year, Pedri said in a budget message presented to council Tuesday night: $82.2 million in new construction — mainly in industrial parks — and the expiration of past tax breaks granted on properties assessed at a combined $42.7 million.

The properties with expiring breaks had been participating in the Keystone Opportunity Zone (KOZ) and Local Economic Revitalization Tax Assistance, or LERTA, programs. Pedri said a list of these properties will be presented when the assessor’s office presents its budget to council.

Among the other spending reductions or revenue increases he highlighted during the virtual council session:

• $100,000 more in receipts from employee health insurance contributions.

County workers pay 10% to 15%, and most are now at 12%.

• $300,000 in prior-year credit toward the county’s Children and Youth match based on budget and audit reviews.

• $100,000 in savings from switching to in-house probation department handling of pre-trial services for the county prison.

• $250,000 in expenditure decreases in county correctional services.

A “constant effort to recruit and retain” correctional officers will allow a $150,000 cut in overtime, while $100,000 less will be budgeted for outside inmate housing based on anticipated need, Pedri said.

• An across-the-board reduction, in some cases 75%, for meetings, conferences and training in many departments as virtual learning has become standard during the pandemic.

• $250,000 in workers’ compensation fund reductions due to effective claims management.

Major expenses

The employee pension fund actuary has determined the county’s payment into the fund can remain at $14.5 million, Pedri said.

Also not increasing is the county’s $20.71 million budgeted expense for health insurance.

However, debt repayments will rise $1.85 million, for a new total payment of $26.35 million.

Next year’s non-health insurance premiums have doubled “based primarily on market uncertainty,” Pedri said, noting that rates have escalated for most local governments across the country.

Personnel

Union workers will collectively receive $322,938 in raises next year, excluding detectives still negotiating a contract to replace one that expires the end of this year, Pedri said.

On the non-union side, Pedri has proposed allocating funds to provide 1.5% merit raises. The allocations for raises would be $90,210 for non-union workers under his supervision, $90,249 for court branches, $12,770 for the district attorney’s office and $2,047 for the controller’s office.

The average budgeted raise for county employees is less than $1 per day, he said.

In all, the budget covers 1,564 positions.

Pedri is not requesting additional staff and said the proposed budget has six fewer positions due to the consolidation of five and elimination of a $27,550 mechanic position that could not be filled after repeated requests for applicants.

The proposal also includes $10,000 for a potential stormwater fee payment to the Wyoming Valley Sanitary Authority. Pedri said the administration is in negotiation with the authority on a payment, although a final agreement would be up to county council.

No surprise

Pedri had announced last weekend he would not be proposing a tax increase, saying coming up with the package was difficult but necessary to avoid an “additional burden on our residents during such challenging times.”

His budget message to council Tuesday said 2021 will be a “trying year financially for the county” and that the proposal is “tight” and “will provide challenges.”

“Nevertheless, county administration is confident that the 2021 budget provides the ability to meet these situations effectively,” he wrote.

County real estate taxes are currently 6.1696 mills, which equates to a payment of $616.96 on a $100,000 property. A mill is $1 tax for every $1,000 in assessed value.

Council has scheduled several budget discussion sessions before its Dec. 15 plan adoption.

Pedri said management looks forward to working with council in a “respectful and collaborative manner” to finalize the budget.

Overall, the general fund operating budget would increase from $153.5 million to $154.65 million under Pedri’s proposal. It sets aside $247,000 in a reserve, or $225,000 less than this year.

Stating this is his fifth proposed budget as county manager, Pedri said the plan contains sustainable revenue and does not rely on one-time funding. The county collectively had $17.6 million in surpluses from 2016 to 2019, he stressed.

“The days of overspending or anything along those lines are long gone,” Pedri said.

The proposed budget is posted under the budget/finance section at luzernecounty.org.