Luzerne County vehicle owners won’t pay $5 more next year, but county property taxes will rise 4 percent for real estate owners in 2017, officials decided Tuesday.
The county-funded homestead tax break for owner-occupied residences that was temporarily halted in 2015 also was eliminated for good because county officials did not identify $4.7 million to fund it.
Homestead participants had saved $45 to $57 on their county real estate taxes annually through the break that started in 2009. The council had planned to use the funds from halting the break for deficit reduction in 2017 and then to restore the break in 2018. Instead, the funds will be used for operating expenses.
The 4 percent tax hike, which will generate $4.2 million, will amount to $23 more per year on a property assessed at $100,000.
The owner of a property assessed at $100,000 pays $575 in county taxes under the current tax rate, which is 5.7456 mills. A mill is $1 tax for every $1,000 in assessed value. The tax rate will increase 0.2298 mill.
County Manager C. David Pedri withdrew his proposal to institute a vehicle fee, saying it became clear the fee was unpopular with the public. The $1.05 million in fee revenue he factored in his budget was no longer needed because spending cuts totaling that amount have been identified, he said.
It also appeared unlikely a council majority would support the fee on an estimated 280,190 vehicles in the county.
Thirteen of the state’s 67 counties have enacted the fee since state legislators authorized the option in 2013 to help counties fund road and bridge maintenance expenses, and Pedri had said it would “spread out the burden” of funding county government.
The council started the meeting with a net $934,828 in previously approved spending reductions to the county’s proposed $136.2 million 2017 general fund operating budget.
After hours of additional cuts and additions Tuesday, the council had enough to eliminate the proposed vehicle fee but only around $200,029 left that could be applied to reduce the tax hike. Instead, the council opted to put that money into the budget reserve.
The final budget ended up at $134.8 million.
A council majority rejected two amendments proposed by Councilwoman Kathy Dobash to cut all divisions by 2 percent and budget $3 million in revenue from an expired tax-break program.
County council members had voted to close out the Tax Incremental Financing, or TIF, program in September 2015. The program diverted property tax revenue from new development along Highland Park Boulevard and at the Arena Hub Plaza in Wilkes-Barre Township to fund infrastructure improvements.
County officials assert the county should receive most, if not all, of the money remaining in the TIF pot because the infrastructure promised under the original 1998 agreement has been completed. The county Redevelopment Authority, which managed the program, has not released the money due, citing conflicting opinions on how the remaining funds should be processed. Pedri said the matter might end up in litigation.
Several council members who opposed the amendment said it is not sound business practice to count on iffy, one-time revenue.
County resident Brian Shiner told the council he was “appalled” and “dumbfounded” that more cuts were not approved.
Six council members approved the budget: Eugene Kelleher, Linda McClosky Houck, Tim McGinley, Robert Schnee, Jane Walsh Waitkus and Rick Williams. Voting no were Edward Brominski, Dobash, Harry Haas, Eileen Sorokas and Stephen A. Urban.
Urban said he supported a prior proposal from Dobash for across-the-board cuts of 6 percent, maintaining most senior citizens and private-sector workers haven’t received income increases in years. He also complained about raises and benefits provided to county workers.
“The people in this county are no longer being served. They’re the servants serving up their money,” Urban said.
Haas said the budget includes five new positions the county “can’t afford” and said the council should have budgeted money from the TIF to reduce the tax hike, even if it wasn’t the “best business practice.”
Kelleher said he can’t support counting on revenue that might not materialize.
Williams blamed the situation on inherited debt and said council members were elected to make “tough choices.” “It’s with a heavy heart that I’m going to vote for this,” he said.
But Brominski said more spending reductions were warranted.
“We’re not tightening our belts. All we are doing is maintaining status quo,” he said, adding it’s time employees “pitched in” by accepting benefit reductions.
