Thursday, July 12, 2012

Pension Woes, State Law Leave Few Options to Balance City Budget, Officials Say

By Christina Georgiou

Easton Mayor Sal Panto said the recent resolution passed by Northampton County Council members opposing the city's proposed “commuter tax” is disappointing and is not aimed at county employees, who comprise one of the largest groups that will foot the bill for the new tax if Easton City Council passes the measure.

At Wednesday evening's city council meeting, the mayor added he was further disappointed none of them had spoken with the city about the issue before they voted 8-0 to condemn the move.

“It's a very complex and complicated issue. I'd be willing to discuss it with county council,” Panto said. “I'd be willing to discuss how the city pension was at $600,000 and now it's at $1.5 million.”

The county has little right to complain, he added, noting that “the county takes up a lot of land, but doesn't contribute or pay taxes.”

“The county can continue to threaten to leave (the City of Easton), and I'd say, 'go ahead,'” Panto said.

The mayor said the state is largely to blame for the city's pension deficit woes, and it has set up a system that leaves urban cities in competition for tax dollars with the more well-off suburban areas, which not only have a wealthier tax base, but have fewer services that need to be provided.

“My wife and I choose to live in the city. I live in a neighborhood that doesn't count as high class. I live in Southside,” Panto said. “But we also live in a 42 percent tax exempt municipality. That's just a reality.”

The real solution to the pension issues many municipalities in Pennsylvania face can only come from the state level, he said.

“There needs to be some sort of revenue sharing in those lily-white suburbs,” Panto said.

Despite seeming to favor the increase in EIT for commuting workers in the city, the mayor said it's not his first choice for raising the needed revenue.

“If I could add 1 percent to sales tax, I would,” Panto said.

City councilmen Mike Fleck and Jeff Warren also added their opinions to the discussion.

Fleck said he feels recent comments made by Northampton County Executive John Stoffa indicating that the increase in EIT would be more palatable if the funds were used for bricks-and-mortar improvements like roads and bridges was “disingenuous,” adding that in the end, all the city's responsibilities need to be paid for, and that capital improvements are no more important than the city meeting its financial obligations.

Warren, a staff member for state Senator Lisa Boscola (D-18th), blamed elected state officials for pension issues that are plaguing a number of Pennsylvania cities.

“There's an irony here. State leadership in Harrisburg keeps talking about local government taking charge, but they pass the buck when it comes to responsibility,” Warren said. “Republican government has had the opportunity to help third-class cities, and they haven't. It leads to cities versus suburbs, and that's unfortunate. I hate to make it a partisan issue, but we've had a Republican Senate...for years and they refuse to put the legislation on the table.”

City council also received five more letters via email regarding the matter, it was recorded Wednesday evening. None was in favor of the proposed new tax, city officials noted.

A hearing to publicly discuss raising the EIT to include those who work but do not live in the city is set for 6 p.m., Monday, July 16 in city council chambers.

“It's going to be an interesting meeting Monday night,” said Panto. “There's going to be an interesting dialogue. It's going to be an interesting discussion.”

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