New Castle News

November 15, 2012

City Council tables fiscal recovery plan

John K. Manna
New Castle News

NEW CASTLE — New Castle City Council postponed a vote last night on adoption of a financial recovery plan.

Council is requesting a meeting with the city’s Act 47 team to discuss inserting language in the amended plan to defer a proposed property tax hike for 2014 if the city finds enough revenue to offset the increase.

The lawmakers tentatively are looking at sometime next week to have the meeting. Council would then have to schedule a special meeting to vote on the proposed three-year plan, which amends the original five-year document that expires at the end of this year.

Originally, the amended plan drafted by the Act 47 team in August called for a one-mill tax increase for 2013 and another one-mill hike for 2015. Both increases are to help pay the city’s employee pension fund obligation.

The Act 47 team agreed since then to allow the city to use $500,000 in gas revenue as a replacement for next year’s tax increase. The city is receiving approximately $2 million in revenue for leasing of gas rights on city-owned properties.

Under the new plan, the tax would be pushed back to 2014, followed by another one-mill increase in 2015. One mill of tax generates about $400,000.

Councilman Ed Yerage, who initiated the idea to provide for some contingency, said, “I want to make sure we exhaust all our efforts to find revenue.”

He said he doesn’t agree with the plan drafted by the Act 47 team.

When asked whether council could insert language in the plan on its own, solicitor Jason Medure said, “I’m of the opinion that the plan has to be voted on as is.”

He likened it to a labor contract that has to be accepted or rejected as it is written.

Councilman Richard Beshero cited the urgency to approve of the plan, noting, “We have to start on the (2013) budget.”

Mayor Anthony Mastrangelo plans to introduce the budget on Nov. 29.

Councilman Thomas Smith said he had suggested that council “sit down with the Act 47 team. Like you said, Ed, this is way too important.”

Councilman William Panella said, “All we’re asking is for a contingency.”

“I don’t think they’re willing to do that,” Smith replied.

Beshero commented, “I don’t disagree with any of you. But we need to act quickly. How about if they say no?”

He pointed out that without a plan, the city would need to come up with $2.2 million. That’s the amount the city receives from the wage tax.

Being under Act 47 allows the city, with court approval, to raise the wage tax above the maximum allowed by the state.

Beshero said he doesn’t want to raise taxes either.

Panella said, however, that taxes would be raised 17 percent over two years and taxpayers would receive nothing in return.

Council president MaryAnne Gavrile noted that although the first recovery plan called for certain initiatives, the city didn’t have to follow them. They included looking at privatizing garbage and having a partial volunteer fire department.

(Email: jmanna @ncnewsonline.com)