Tax hike or mass layoffs?
Republican Paul DeFabo introduced the debate into the Luzerne County Council race Friday by releasing a signed pledge saying he will oppose and vote against all efforts to increase property taxes if he’s elected to one of the five open council seats Nov. 5.
DeFabo urged the 10 other council candidates to do the same.
However, the release accompanying DeFabo’s pledge also indicated he objects to layoffs, saying most departments are operating at minimum staffing levels. “We cannot continue to provide adequate services if we keep losing qualified employees,” he wrote.
The reality in county government is that the choice often comes down to one or the other, including the proposed 2014 budget that calls for an estimated 160 layoffs if taxes aren’t increased a maximum allowable 8 percent.
When pressed, DeFabo said he’d have to choose staff reductions over a tax hike.
“People are suffering. There’s a lot of hardship out there, and the easiest thing to do is raise taxes,” DeFabo said.
Two other council candidates — Democrat Eileen Sorokas and Republican Kathy Dobash — have campaigned on a no-tax-hike promise.
Sorokas said Friday she would stick to that stance if she’s elected, even if significant staff cuts are the only alternative.
“We have a lot of senior citizens on fixed incomes, and a tax increase is just not in my vocabulary,” Sorokas said. “I can’t imagine a scenario where I would raises taxes. I’m very strong about that.”
Dobash said in her campaign announcement last spring that “raising taxes is not an option,” and she said Friday she will keep that promise because she’s met many struggling property owners.
“I have to think of the property owners. Sadly because of mismanagement, these tough decisions are here, and we have to protect the property owners,” Dobash said.
The eight other candidates said they could never say never to a tax increase, but it would be a last resort they wouldn’t take lightly:
• Independent Rick Williams, an incumbent, said raising taxes is an unappealing option but said it is “irresponsible” for any candidates to take a voting position before future situations unfold.
“Good elected officials serve the public well by listening, analyzing and then voting their conscience. Lines drawn in the sand before analyzing complex situations does not indicate good judgment,” Williams said.
• Democrat Richard “Kick” Heffron said conflicting figures prompt him to describe the current proposed budget with an 8-percent hike as “bogus,” but a tax increase may be needed over his four-year council term.
“I believe there is fat in the budget — no doubt about that — and I’ll do anything in my power not to raise taxes,” Heffron said. “But if it gets to the point that there’s no fat left and we have to provide services required by law, we need the money to do that.”
• Democrat Renee Ciaruffoli-Taffera said she would examine county vehicles, utilities and every nook and cranny of the budget before voting for a tax increase.
“I am not for raising any taxes until we have gone through and investigated every portion of the county where there is waste or where things can be changed to save money or increase revenue,” she said.
• Democrat Michael Giamber said he already stated before the May primary that he would not raise taxes until he was “completely satisfied” there were no other viable options. He said it is “suspect” if candidates say they would never raise taxes without knowing what the future holds with rising costs for materials and labor and state and federal mandates.
“I do not believe we have achieved maximum efficiency in this organization. How can we pass our inefficiencies onto the taxpayers when we have all this work to do to clean up the county?” Giamber said.
• Democrat Linda McClosky Houck, an incumbent, said county officials will be dealing with a “mess” that requires tough choices for years because of $27 million in annual debt repayments and other mandatory obligations.
“The budget is the most difficult balancing act that I’ve ever seen, and we’re going to be performing this balancing act for the next two decades thanks to past mistakes,” McClosky Houck said.
• Republican Sue Rossi said she’d need convincing that a tax hike was the only option to consider one because she’s personally witnessed the financial difficulties of property owners as a municipal tax collector.
“There needs to be a lot of changes and active measures so we’re not in this boat every year,” Rossi said. “I’d roll up my sleeves and do what needs to be done.”
• Republican Eugene Kelleher, an incumbent, said a blanket promise to never raise taxes is a “political statement,” and he said there is “no magic bullet” to fiscal woes because the county’s tax base is flat and new revenue from a sales or entertainment tax would require state legislation.
“I will do what’s best to make sure our government gets back on a sound fiscal footing. Raising taxes should be the last action we take, but if it’s necessary, I will do what’s necessary after all other options are examined,” Kelleher said.
• Harry Haas, another Republican candidate and incumbent, said county officials reduced the workforce from 1,630 to 1,450 full-timers since the start of 2011 in addition to cutting supplies and other spending. After covering mandated services at the prison, 911 and other agencies, there is “little discretionary” room for reductions, he said.
“If a tax increase is the only tangible way to cover mandatory expenses after cutting everything else, I would consider it, but I think it would be haphazard to raise taxes to the max or impose maximum layoffs,” Haas said.
County’s debt issue
In his Friday release, DeFabo said he would work with county officials to draft a recovery plan in an attempt to obtain a credit rating needed to refinance the county’s more than $400 million in debt, which could reduce the $27 million in debt repayments factored into the 2014 budget.
But many county observers say this promise gives false hope because the county is nowhere near achieving the years of demonstrated financial stability required to get a rating from a nationally recognized organization, such as Moody’s Investors Service, Standard & Poor’s or Fitch Ratings.
These organizations put government entities through the ringer because their ratings help buyers weigh the stability of potential investments without the cushion of insurance in a default. The county’s past reliance on borrowed funds to cover deficit spending, lack of a cash reserve and year-end cash flow problems are among the reasons the county has been unsuccessful in landing a rating.