In advance of asking a court for approval to impose a commuter tax, Scranton City Council on Thursday introduced increases in the real estate transfer, business privilege and mercantile taxes for 2013.
Council also introduced ordinances to keep the garbage collection fee and the Local Services Tax for emergency services the same next year.
The setting of these taxes and fee is usually done each January, after the city's annual budget has been adopted, council members said.
However, rather than waiting until January to formally set them, the administration and council decided to act earlier than usual because the city also is seeking court approval for a commuter tax, council members said.
Earlier Thursday, the city received a Dec. 10 hearing in Lackawanna County Court on the city's petition for court approval to impose a 1 percent commuter tax. The city needs to be able to show the court that the city has taken steps to increase taxes on its own residents and businesses before taxing nonresidents, council members said.
"We want to have certain taxes on the agenda before the court date for the commuter tax so we can show the court and demonstrate to them that we are in fact increasing other taxes, which is part of the justification for the commuter tax in itself," said council Finance Chairman Frank Joyce.
Council President Janet Evans added, "We're passing them early in order to facilitate the city's position in court regarding the commuter tax. But in addition, we need everything in place so that in the beginning of 2013, the city is up and ready to go and return to financial sound footing."
The increases in the real estate transfer, business privilege and mercantile taxes were not unexpected, as they are contained in the city's revised Act 47 recovery plan that was adopted Aug. 23, council members said. The increases also would return these taxes to their 2010 levels, Mr. Joyce said.
The real estate transfer tax would be raised from the current 2.8 percent to 2.9 percent, which would generate an additional $185,000 a year, Mr. Joyce said.
The business privilege and mercantile taxes each would be raised from their current 0.00087525 percent to 1 mill in 2013, which together would generate an additional $500,000 a year, Mr. Joyce said.
A mill is a $1 tax on every $1,000 of a property's assessed value.
Ordinances to increase the real estate transfer, business privilege and mercantile taxes and to keep the garbage fee the same at $178 a year were introduced in a series of identical 4-1 votes, with Mrs. Evans, Mr. Joyce, Councilman Bob McGoff and Councilman Jack Loscombe voting yes, and Councilman Pat Rogan voting no.
Mr. Rogan, who cast the lone vote against the revised recovery plan, said he voted no on these four ordinances because, "My only concern is that once these are passed, that part of the budget is set in stone. There's nothing that can be amended or changed."
Council also unanimously introduced an ordinance to keep the LST in 2013 at the same amount it is now, $52 a year.
In another matter, Mr. Rogan noted that council a few months ago asked city Tax Collector Bill Courtright to extend the 2013 first-tax-payment discount period by a month, from Feb. 28 to March 28, to help taxpayers who may be struggling to pay next year's expected city real estate tax hikes. Mr. Courtright asked Lackawanna County to get on board with extending the discount period, but received on Oct. 26 a reply from Thomas Durkin, Lackawanna County's director of administrative services/CFO, who expressed concerns.
"The county understands and appreciates that a real estate tax increase can be a potential hardship for taxpayers. That being said, we do not feel that extending the first discount period to March 28, 2013, is affordable for the county at this time," Mr. Durkin stated. "While the county annually seeks a tax revenue anticipation note to provide funding until we begin to receive real estate tax receipts, extending the first discount period has the potential to create a problem with our cash flow. It is our hope that taxpayers are able to take advantage of the first discount period by its scheduled end date, February 28, 2013."
Mr. Rogan noted that last year, when the county raised taxes by 38 percent, it asked the city and school district to go along with a discount-period extension, and both did.
"When the county was walloping everyone with a tax increase, the city helped out. Now when the shoe is on the other foot - it's not even put on the other foot because the county is continuing to raise the taxes again (next year) - they're not willing to help out the taxpayers in Scranton," Mr. Rogan said. "I was hoping they would have extended the courtesy to the city that the city extended to them. I would encourage the residents of Scranton to contact the county commissioners and ask them to reconsider extending the discount period. Hopefully the public will ratchet up the pressure on the commissioners."
Mrs. Evans said she would discuss with Mr. Courtright whether it's "essential to have the agreement of the county commissioners" for the city to extend the discount period.
In other matters:
n Council voted 4-1 to table a vote on adopting an ordinance to transfer a restaurant liquor license owned by Calanni's Inc., trading as Little Nikki's Pasta House, 77 Fallbrook St., Carbondale, to Pass Rush LLC for use at Big House Tobacco Outlet, 200 Green Ridge St. Joseph Fadden III is requesting the license transfer to his existing business, the tobacco outlet, to create a restaurant and cigar lounge. The ordinance was tabled to give him and his attorney the opportunity to attend a public council caucus Thursday at 6 p.m. to discuss his plans. Mr. McGoff, who said he plans to vote against the transfer, voted no on tabling the ordinance.
n Council unanimously adopted a resolution for the city to apply for and accept a $555,000 grant to help redevelop the historic former Scranton Lace factory into a residential and commercial center. The grant, from the state Race Horse Development and Gaming Act, would be sought on behalf of Lace Building Affiliates LP, a firm that is planning a $51 million redevelopment of the large-scale brownfield property on Mylert Avenue. Lace Building Affiliates partner Jody Cordaro and his attorney, Bill Jones, as well as city Office of Economic and Community Development Director Linda Aebli and OECD attorney James Mulligan, attended a caucus before the council meeting to discuss the grant and redevelopment project. Mr. Cordaro and Mr. Jones said the goal is to start construction in spring and complete it in phases over several years. All council members had favorable comments about the plan and said it would be an economic boon to the city and help revitalize the neighborhood.
n Council unanimously introduced an ordinance to prohibit truck traffic on Lake Scranton Road, from Route 307 northeast to Elmhurst Boulevard. Exemptions would include emergency and city DPW vehicles, local deliveries and military vehicles. Violators would face fines of between $50 and $300 and up to 90 days' imprisonment. The truck ban is being enacted "to respond to demonstrated concerns of homeowners" in that area, Mrs. Evans said.
Contact the writer: jlockwood@timesshamrock.com