Click here to subscribe today or Login.
Luzerne County’s proposed 2020 budget is expected to include a suggested real estate tax increase, but the specifics won’t be released until Tuesday’s unveiling.
County Manager C. David Pedri said Friday the administration was still fine-tuning the proposal and would defer comment on details until the 6 p.m. presentation to council at the courthouse on River Street in Wilkes-Barre.
Increases in health insurance and the employee pension fund subsidy are among the reasons likely to be cited by the administration for seeking a tax increase.
Council has scheduled nine work sessions to review proposed spending and receipts before its Dec. 10 budget adoption.
The last county tax hike — 4% — was approved in 2016 for the following year’s budget.
The owner of a property assessed at $100,000 pays $597.54 in county taxes annually under the current rate, which is 5.9754 mills. A mill is $1 tax for every $1,000 in assessed value.
A 2% increase had been proposed for 2018, but officials determined it was unnecessary largely due to debt refinancing savings and one-time windfalls.
Council avoided the administration’s proposed 3% tax hike in 2019 by cutting spending requests in many departments and using part of a one-time surplus.
Some council members had predicted this solution would make 2020 budget balancing more challenging because around $1.5 million from the surplus was applied to 2019 health care expenses. Without such help again, the 2020 budget must cover the full health care tab plus any increases.
However, the county may be catching a break on debt repayments, which had been set to increase from $24.9 million to $26.1 million in 2020, documents have shown. Under a newly approved borrowing/refinancing package, the 2020 payment is estimated at $24.4 million — canceling out the expected increase and yielding a payment lower than this year’s, records show.
After 2020, the debt payments are projected to rise again and range between $26.1 million and $26.8 million through 2029 and wrap up with an additional $6.2 million payment in 2030, records show.
Prison highest
This year’s general fund operating budget is $137.8 million.
The correctional services division is the top budgetary expense, with an allocation of $28.4 million to run the Water Street prison and minimal offenders building on Reichard Street, both in Wilkes-Barre.
One unknown in this division is the cost of a new contract for inmate health care services that has not yet been presented to council for approval. The county currently pays Wellpath LLC $197,688 per month, or around $2.37 million annually, to provide a range of health care services and personnel, officials have said. Four companies submitted proposals to handle the work.
Ranking second in overall division allocations is the court system, which is currently earmarked at $18.8 million and covers administration, probation services, domestic relations and district courts.
Approving a budget is one of the essential duties of the 11-member, part-time council because it sets spending limits for the administration for a year.
The manager doesn’t have to come to council for approval on purchases if he has enough budgeted funds to cover them unless the expenditures would cost the county $25,000 in a future year or $75,000 in two or more years, the county’s home rule charter says.
Other costs
Health insurance for county employees is currently budgeted at $10.1 million.
The general fund portion of the employee pension fund subsidy is $9.35 million, the budget says.
Annual taxpayer subsidy is necessary to close a pension shortfall that emerged years ago, when investment earnings and employee contributions stopped keeping pace with commitments for future pensions that are guaranteed by law. Two other drivers that have been cited by the actuary: People are living longer, and the revenue projected from investments had been unrealistically high.
The estimated net pension liability of the county’s employee pension fund — the gap between assets and future obligations — was $119.6 million at the end of 2018, the county audit said.
Lengthy discussion
Following Tuesday’s budget presentation, council will hold its first budget work session to review the retirement fund, debt and the contingency reserve.
The other budget sessions — all held at the courthouse with the exception of the Oct. 22 one:
• Oct. 22, 5:30 p.m., Hazle Township municipal building — public budget hearing, voting meeting and work session for the solicitor and budget/finance budgets
• Oct. 29, 5 p.m., controller, administrative services, public defender
• Nov. 4, 5 p.m., district attorney and judicial services and records
• Nov. 12, 6 p.m., voting meeting and work session for operational and correctional services
• Nov. 18, 5 p.m., general government, budget hearing and human services
• Nov. 26, 6 p.m., voting meeting and work session for courts
• Dec. 3, 6 p.m., budget amendments and intergovernmental budget
An optional budget work session has been scheduled for 5 p.m. Dec. 9 at the courthouse, with the budget adoption set for 6 p.m. the following day.