Tuesday, July 17, 2012

City Council Pushes Back Date for Final Vote on “Commuter Tax,” Agrees Regional Revenue Discussion Needed

By Christina Georgiou

 Easton City Council agreed Monday evening to push back voting until Wednesday, August 8 on a proposed “commuter tax,” which would require those who work but do not live in the city to pay an additional 0.75 percent in Earned Income Tax (E.IT) beginning next year.

Vice Mayor Ken Brown requested the move, saying he'll be away for the next meeting but very much wanted to be present when the matter is up for the final vote.

The delay in deciding the matter came at the close of an hour-and-fifteen-minute hearing that was sparsely attended by the public, though Northampton County Executive John Stoffa was notably present.

Northampton County Executive John Stoffa suggested
non-profits pay a portion of property tax and that Lehigh
Valley elected leaders meet with state officials to press for
changes at the state level to munipal pension requirements.

Following a recap of why the EIT seemed most fair of the city's present options to to help cover a looming deficit in the city's pension fund by Mayor Sal Panto, Stoffa addressed the council, and made two suggestions for a joint effort for the county and city to help combat a problem he said both entities face.

“I have sympathy for a problem you inherited without a solution,” Stoffa said.

Of the 1,101 Northampton County employees, 103 live in city limits, he said.

“I'm here to help you understand how this will affect more than Easton.,” Stoffa told the council. “We face the same issues you do. One thing you don't have is is 11 unions to negotiate with.”

The county executive suggested that a meeting be set up with between local Lehigh Valley elected leaders along with state representatives to discuss the issue of unsustainable costs municipalities face.

“We've never had that in the history of the Lehigh Valley,” Stoffa said.

Stoffa also suggested that non-profit and other organizations that are exempt from paying property tax be required to pay a severely reduced rate instead, the revenue from which could be used to help close the gap in municipal pension payments.

“I think the time that non-profits pay nothing is over,” Stoff asaid, adding that a rate between 10 and 20 percent of what would be owed by a for-profit or residential homeowner seemed reasonable.

Panto noted that for that to happen effectively, a county reassessment of properties would need to be undertaken.

“Our assessments are 25 years old. But with the recession, maybe they're accurate. I don't know...” Panto said, adding, “I do know the one for Lafayette College is woefully low.”

Panto said past meetings on shared regional issues have been productive, and that it seems like the city and suburbs do have common issues to be faced.

“Sooner or later, they're going to be grown out, and then the only way (to make up necessary revenue) is to raise taxes,” he said.

Stoffa, the mayor and council members all agree that municipal pensions are unsustainable at the current rates, and that the issue is one that affects nearly every Pennsylvania municipality, they said.

“The state holds all the cards,” said Councilman Jeff Warren. “Why they haven't addressed it, I don't know. They know what we're going through. Why they haven't stepped up to the plate, I don't know.”

Warren's comments echoed those of Panto made earlier, as well as those made by fellow councilman Mike Fleck.

“We do need real pension reform. But the state is laughing at us,” Fleck said. “Because no one is yelling at them, and they think they'll be re-elected.”

Fleck also said he was disappointed that Stoffa was the only county representative present at Monday evening's hearing to discuss the proposed measure, which county council voted 8-0 to condemn in a recent resolution.

He added he felt the council was being reactionary in that move, and were being “critical to make themselves look better.”

“I'm really disappointed with our representative, (Bob) Werner, when he knows us and could have talked to us,” Fleck said. “I'm disappointed in County Council as a whole, not the administration.”.

Only one member of the public commented during the hearing, Joey Cervenka, of Forks Township, who works for a privately-owned firm in the city.

Joey Cervenka, of Forks Township, who works fo
r a privately-owned firm in the city. was the only citizen to
voice an opinion Monday evening. Especially frustrating,
he said was the fact that Easton 's pensions would be getting
a larger share of the EIT he'd pay than the school district.
Clarifying that if passed, he'll pay 1.75 percent EIT, of which 0.5 percent will go to each Forks Township and the Easton Area School District, with the final 0.75 percent to the City of Easton, Cerevenka said he felt the tax was unjust.

“What's frustrating is that more will go to pensions than schools.”

He wondered too what there is to stop the city from raising the amount again.

Panto said that while the city can theoretically raise it higher according to the city charter, that he didn't think it would be fair to charge non-residents a higher tax than residents, who in the unlikely case of another EIT increase, would see it before non-residents.

The mayor suggested Cervenka contact the state senator about the issue of pension reform as well.

While members of council and the mayor still seem likely to vote in favor of the “commuter tax” proposal in August, some said Monday they were of mixed feelings about it.

Councilwoman El Warner said she came to listen to input at the hearing Monday evening, noting there will be other times for her to voice her thoughts on the issue.

Councilman Roger Ruggles said he's still thinking about the right thing to do.

“I have mixed feelings on this,” Ruggles said. “The city itself is the center of the community. And if the city is not a good place, then surrounding municipalities suffer. It's hard to say what' fair. It's a really, really difficult decision.”

He added, “I think working together is a much more effective way of doing things. It's not us and them. It's us.”

Warren agreed.

“We need to continue with regional agreements,” Warren said. “Government leaders need to embrace that.”

Though the matters of currently exempt entities paying property taxes and potential proposals for revenue and shared service agreements seem likely to be addressed in the near future, whether they will take the place of the revenue a “commuter tax” would raise or whether agreements can be reached before the city needs to make a final decision on how it will pay an estimated $1.4 to 1.8 million deficit in its pension system in 2013, seems murky at best.

If not for the ongoing recession and the resulting high unemployment and underemployment, Panto noted too, the city would have enough in from EIT at current rates and would not be considering the current move.

“I really thought the recession would come to an end, but that's not going to happen,” the mayor said.

Northampton County Council meets at 6:30 p.m. on Thursday, July 19, Stoffa noted, adding that he will be bringing the idea regional municipal elected leaders up then too.

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