Major change in 8-percent tax hike not expected

Last updated: January 07. 2014 11:31PM - 3928 Views
By - jandes@civitasmedia.com

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A power shift on Luzerne County Council caused by the addition of two new members may prompt reopening of the 2014 budget and a switch back to elected tax collectors.

Councilman Rick Morelli, appointed chairman Monday with the support of this new informal majority, said both matters will be on Tuesday’s council meeting agenda.

A majority of the 11-member council can amend the budget and tax rate before Feb. 15 in the year after a council election, and Morelli and the five council members who supported his chairmanship said they’re willing to explore that option — Edward Brominski, Stephen A. Urban, Stephen J. Urban and new members Kathy Dobash and Eileen Sorokas.

The 2014 budget contains an 8-percent tax increase amounting to $42.56 more per year on a property assessed at $100,000.

The years-long contentious issue of tax collection is ripe for reconsideration because representatives of the county’s 69 elected collectors have expressed willingness to drop an appeal over their elimination if the county cancels in-house collection and pays them a reduced rate, Morelli said.

Brominski, Morelli, both Urbans and Councilman Tim McGinley had opposed the February 2013 council decision to convert to in-house collection. Dobash and Sorokas both say they support halting plans to assign county tax collection to the Treasurer’s Office.

The elected collectors were paid $3.50 for both paid and unpaid county tax bills. They are willing to accept $2.75 for paid and $1 for unpaid, with a 25-cent bonus for each paid bill if a collector exceeds prior three-year collection rates, which would save up to $125,000, Morelli said.

Additional savings?

But supporters of in-house collection argued the county will save more — at least $240,000 annually. The administration also budgeted an estimated $78,500 in additional revenue providing tax payment verification forms when property changes hands.

Former council members Elaine Maddon Curry and Eugene Kelleher, who were replaced by Dobash and Sorokas, had supported the in-house collection along with still-seated council members Jim Bobeck, Harry Haas, Rick Williams and Linda McClosky Houck.

Haas brought up the move to in-house collection at Monday’s council meeting as an example of wise changes made during the first two years of home rule. He said the county will save $33,300 on bonding alone, which is required for those handling money.

Treasurer’s Office representatives insist they are equipped to handle the increased duties, but Sorokas, Dobash and some other council members say they don’t share that confidence.

Budget review

The budget reopening may not result in significant alterations, Morelli cautioned. The home rule charter added the provision allowing a month for reconsideration so new council members had an opportunity to review the budget with new colleagues, he said.

“It doesn’t necessarily mean major changes will take place. There’s no harm in opening it up to review and more discussion, but if someone wants to make some major changes, they’d better have a major game plan,” Morelli said.

He voted against the 8-percent hike but said he would have supported some increase. He is not willing to join Urban and Urban with no tax hike if it results in a projected 194 staff cuts, which means that option likely wouldn’t obtain the necessary six votes.

“We can’t handicap the government and services. That’s certainly not something I’m in favor of,” Morelli said. “I don’t want the workers to panic.”

Dobash and Sorokas said they’re interested in reviewing any viable options to whittle down the tax hike. They both campaigned against any tax hikes, but Dobash said identifying $8 million in cuts to avoid any tax increase would be difficult in the narrow amendment window.

“Anything’s better than the 8-percent tax hike that they already passed,” Dobash said.

Chain of events

The potential tax collector reversal must be discussed immediately so the administration does not proceed with the hiring of two workers and other expenses associated with the in-house collection, Morelli said.

The administration had aimed to mail county tax bills in two weeks, though that date must be pushed back if council reopens the budget.

An attorney representing elected tax collectors was communicating Monday with county Chief Solicitor C. David Pedri about litigation settlement options.

County officials say home rule allowed them to stop using elected collectors, and a judge affirmed that opinion. Elected tax collectors have appealed that ruling.

Morelli said the county could be forced to pay tax collectors $3.50 per bill if the elected collectors prevail in court, and he has doubts about the loss of collectors who reside in municipalities they cover.

The Treasurer’s Office had planned to offer in-person weekend and evening collection hours during peak payment times and a system allowing online payments with a credit or debit card or electronic check.

“A settlement would provide guaranteed savings with no loss of services,” Morelli said. “If the county handles collection and things get screwed up, people will blame the government.”

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