Optimistic Future for West Hazleton

By Steve Mocarsky, The Times Leader, Wilkes-Barre, Pa.

Dec. 23–WEST HAZLETON — The borough appears to be progressing nicely on its financial recovery path, and despite the need to raise the earned income tax rate next year, is expected to have positive fund balances at the end of this year and 2008.

Borough council will meet on Thursday to vote on the 2008 budget proposal, which was put together by council’s finance committee in conjunction with the Pennsylvania Economy League’s Central Division Office.

Borough officials have been working with the PEL since 2003, when the borough had an $800,000 deficit and the state granted it financially distressed status under Act 47, which allowed the borough to borrow money at a greatly-reduced interest rate to pay down its debt.

"I think the borough has made great strides under Act 47. … The councils since 2003 should be applauded. They’ve taken their job very seriously," said Gerald Cross, executive director of the PEL’s Central Division.

The borough has been following a five-year financial recovery plan put together with assistance from the PEL and approved by the state and a Luzerne County Court of Common Pleas judge.

Council on Thursday will also vote on a new recovery plan for 2008 through 2011. The state has already approved that plan, and it will go before a county judge before Jan. 1, Cross said.

The $1.68 million budget includes an earned income tax increase of 0.5 percent, which will bring the EIT rate to 1.5 percent.

The increase is necessary to assure a balanced budget, covering the costs of increased police coverage and code enforcement, and the rising costs of other services and commodities, and the loss of certain revenue.

The new EIT rate will remain in effect through 2009 and will decrease to 1 percent for 2010, as is legally required because a countywide reassessment is expected to bring in increased property tax revenues that year. The state will require the borough to reevaluate its 2011 EIT rate in 2010.

The new EIT rate is expected to generate an additional $219,000 in revenue, which represents most of the nearly 6-percent increase in total revenue projected for 2008 over total revenue projected in this year’s budget.

The borough also expects to see an additional $14,808 in property tax revenues because Luzerne County’s assessed valuation has increased, Cross said.

The borough expects to receive about $54,000 less in Emergency and Municipal Services Tax revenue next year because the state has changed the way the tax is collected in all municipalities.

Instead of assessing the $52 tax in one lump sum from paychecks of people who work within the borough limits, employers will now deduct a portion of the tax from each paycheck on a pro-rated basis. So municipalities will receive payments at the end of each fiscal quarter and therefore won’t receive tax revenue from the last quarter of 2008 until January 2009.

Borough officials expect to see some savings in various departments next year, which means spending about $7,500 less in legal fees, $7,000 less on engineering services, and about $26,000 less on health insurance.

The insurance savings comes from switching to less expensive insurance plans for employees and the requirement of the health insurance carrier to switch plans for retirees, Cross said.

Police salary costs are expected to increase about $12,000 to $117,075 with the employment of two full-time officers, a part-time police chief and part-time officers, providing a total of 7,000 hours of local police coverage.

Code inspection costs are expected to increase from $3,000 to $20,000 because council members expressed a desire to increase code enforcement, especially in the area of rental property registrations, Cross said.

And the Street Department salary line item was increased by about $10,000 to allow the borough to add another part-time employee.

The borough’s fund balance at the end of 2008 is expected to increase by $26,860.

WHAT’S NEXT?

ON THE WEB

West Hazleton Borough Council will meet to vote on the 2008 budget proposal and a new financial recovery plan at 7 p.m. Thursday, at the borough annex building.

Visit www.timesleader.com to see West Hazleton’s 2008 budget proposal draft.

Steve Mocarsky, a Times Leader staff writer, may be reached at 459-2005.

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Copyright (c) 2007, The Times Leader, Wilkes-Barre, Pa.

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