Property taxes could be slightly higher for Scranton property owners than city officials suggested earlier this month.
Even though the 2013 budget has been adopted, the tax millage rates have not yet been enacted and remain a work in progress.
The city has two separate property tax millages: one for land and the other for improvements/buildings.
The tax hikes should be at least 22 percent each on land and improvements, but could go as high as 24 percent on land and 25 percent on improvements, with the final result depending on whatever millage rates are actually enacted in January, officials said.
The uncertainty stems from the city's budget for 2013 intersecting with the commuter tax hearings of last week.
For 2013, the mayor and council initially had been planning property tax hikes of 12 percent on each millage. That figure stemmed from a court order in January requiring that $9.85 million in unfunded debt be paid back with a dedicated tax millage.
But the city in October also received court approval for a second unfunded debt of nearly the same amount, $9.75 million, which also had a requirement that this debt be paid back with a dedicated millage. However, the mayor and council were planning instead to use proceeds from the second unfunded debt to pay next year's debt service on this borrowing, to avoid another dedicated millage and keep the 2013 tax hike at 12 percent.
Then came the commuter tax hearings of Dec. 11 and 12, when a panel of judges expressed concern that the city's avoidance of a dedicated millage to pay back the second unfunded debt would violate the October court order.
Mayor Chris Doherty made a surprise appearance at the Dec. 13 council meeting to ask for an additional 10 percent property tax hike on top of the 12 percent first proposed for the 2013 budget, for a total property tax increase of 22 percent on each millage. This larger tax hike was needed to satisfy the concern raised by the commuter-tax judges, the mayor told council, and the council agreed to a 22 percent tax hike.
After the mayor left, council on Dec. 13 adopted an amended budget of $111.1 million, from the formerly proposed budget of $109.7 million, to reflect the higher tax increase revenue that the mayor requested.
The next day, Dec. 14, the mayor signed the budget, and it was submitted to the commuter-tax judges. That same day, Dec. 14, city officials also submitted to the court the city's expected new millage rates under the now-adopted 2013 budget as follows:
n The millage rate for land of 96.701 mills this year would increase to 119.909 next year.
n The millage rate for improvements of 21.03 mills this year would rise to 26.288 mills next year.
While the mayor on Dec. 13 asked for an additional 10 percent tax increase to generate an overall 22 percent property-tax hike, land millage going from 96.701 to 119.909 would be a 24 percent increase, and improvement millage going from 21.03 mills to 26.288 mills would be a 25 percent hike.
Asked to explain the discrepancy between the 22 percent increase stated during the Dec. 13 council meeting and the millages submitted to the court on Dec. 14, Mr. Doherty and city Business Administrator Ryan McGowan said the millage rates submitted to court are the amounts needed to comply with the October unfunded-debt court order.
They said that because the city's tax collection rate is around 88 percent, the millage rates end up a little higher to achieve an additional 10 percent increase in tax revenue.
"I have to make sure we have enough revenue to satisfy the judges' orders" for dedicated millages," Mr. McGowan said.
Council President Janet Evans and council Finance Chairman Frank Joyce said they were surprised that the millage rates submitted to the court Dec. 14 were slightly higher than 22 percent.
Mr. Joyce said he had been given the new millage rates Dec. 13 by Mr. McGowan before the council meeting but had not had time to examine them. He said he was under the impression the millages represented 22 percent increases each on land and improvements.
Mrs. Evans said she had not seen the new millage rates Dec. 13 and vowed that council would not support a tax hike for 2013 that would be greater than 22 percent.
"If there are any inaccuracies, they will be corrected before council would pass that particular millage. We are sticking with the 22 percent" increase, Mrs. Evans said.
If the millages were to stay at the figures provided to the court during the commuter-tax hearings, Scranton's property taxes would increase in 2013 as follows:
n Land: With an average 2012 land assessment of $2,470, according to the Lackawanna County assessor's office, and the current millage set at 96.701 mills, the average property tax bill for land this year is $238.85. A 24 percent millage increase from 96.701 mills to 119.909 mills would equate to a land-tax bill of $296.18 next year, or a hike of $57.33.
n Improvements: With an average 2012 improvement assessment of $8,867, according to the county assessor's office, and the current millage set at 21.03 mills, the average property tax bill for improvements this year is $186.47. A 25 percent millage increase from 21.03 mills to 26.288 mills would equate to an improvement tax bill of $233.10 next year, or a hike of $46.63.
Contact the writer: jlockwood@timesshamrock.com