Scranton's tax hike for 2013 would remain at the 12 percent that has been proposed in the city's recovery plan, despite a pending millage increase to cover certain debt, Mayor Chris Doherty said Friday.
That's the same thing council President Janet Evans and council Finance Chairman Frank Joyce said Thursday when council introduced an ordinance to dedicate a millage increase over 10 years to pay for $9.75 million in financing called unfunded debt. They said the city's Act 47 revised recovery plan adopted in August would raise enough revenue through other taxes and means to cover the $9.75 million in unfunded debt without having to impose a tax hike above 12 percent.
Mr. Doherty agreed.
"You have to have money applied toward it (unfunded debt), whether it's through millage or you have another piece of revenue that comes in," Mr. Doherty said. "Our hope is to keep it (the 2013 tax increase) at the 12 percent."
Unfunded debt sought by the city to plug budget holes arising from unforeseen circumstances must be approved by Lackawanna County Court.
The $9.75 million in unfunded debt was the second round of such financing that the city sought this year.
On Jan. 26, visiting Senior Judge Jerome Cheslock of Monroe County ruled the city can borrow $9.85 million in unfunded debt and ordered it to be repaid through "an increase in the millage dedication of real estate taxes" over 10 years.
That translated into the 12-percent tax increase for 2013 that was agreed upon by mayor and council in the recovery plan.
The city then went on to pursue other financing, including last month seeking court approval for a second round of unfunded debt, this time for $9.75 million. On Oct. 31, Judge Peter O'Brien, a senior visiting judge from Monroe County, granted the city's petition to seek the additional $9.75 million in unfunded debt and also ordered it to be repaid through an increase in millage dedication of real estate taxes over a 10-year period.
Council on Thursday then introduced an ordinance from the administration to "levy a real estate tax millage increase for a period of 10 years" dedicated to pay back the $9.75 million in unfunded debt.
Asked whether this dedicated millage would result in an additional tax hike beyond the 12 percent increase in the recovery plan, Mrs. Evans and Mr. Joyce said no.
"The 2013 tax increase will be 12 percent - period," Mrs. Evans said. "I discussed this issue with him (Mr. Doherty) and he said, 'No, the increase will be 12 percent.' This is what we have stated, and we will keep our word."
As for what other revenue would cover the second unfunded debt, the mayor was not specify, but said, "That's what we're going through now in putting the budget together."
Under the Home Rule Charter, a budget proposal by the mayor must be submitted to council by Thursday. Both sides are working to present a joint budget to avoid the budget battles of the past two years.
Contact the writer: jlockwood@timesshamrock.com