Last updated: February 19. 2013 3:24PM - 459 Views

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Luzerne County Manager Robert Lawton and county tax claim operator John Rodgers said they have reached an understanding on 2013 budget projections.

We maintain a high degree of confidence in our original revenue projections, Lawton said following a second meeting Friday with Rodgers, owner of Northeast Revenue Service LLC.

Council members encouraged the meetings because Rodgers raised concerns that revenue may be overstated by $3 million.

Rodgers said he learned the administration plans to pursue a past-used option known as monetization, in which the county receives upfront cash for delinquent taxes, for both 2011 and 2012 back taxes.

He said the documentation he read made it appear the practice would be used only for remaining 2011 back taxes.

Rodgers said the revenue projections will be fine if the county monetizes for both years. If not, the county would have to cut deeper or raise taxes to make up for roughly $3 million in back-tax receipts that wouldn't arrive until defaulters pay in 2014, he said.

Council is expected to discuss the option along with other budget details during the first public budget hearing Monday.

A council majority rejected monetization earlier this year because the county gives up receipt of full taxes and penalties owed in exchange for the advance funding. Council members have said they won't raise taxes, and Lawton's proposed $122.25 million budget delivered on that pledge.

Monetization has become common in the region and throughout the state since it was authorized by state law in 1998.

Prior commissioners most recently monetized in 2011, selling 2010 back-tax liens to receive an infusion of $7.7 million in upfront cash.

The county Redevelopment Authority has handled the county programs because the law gives local redevelopment authorities that right.

The authority basically takes out a loan to provide the lion's share of the taxes owed to the county in advance. Back taxes paid on the impacted properties must then be used to pay off the loan with interest.

In addition to the loan interest, another 5 to 5.5 percent went to the redevelopment authority, lawyers and Municipal Revenue Services, a company hired by the authority to oversee the program, Municipal Revenue representative Chuck Herron has said.

For example, the fees on the county's 2010 monetization ranged from about $385,000 to $423,000, Herron has said.

If you go

Monday's Luzerne County special meeting and public budget hearing will be held at 5:45 p.m. at the county's West Side Annex at the Wyoming Valley Airport off Wyoming Avenue in Forty Fort. A second public budget meeting will be held at 6 p.m. Nov. 14 at the same location.

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