New Castle News

Closer Look

October 2, 2012

Our Opinion: No easy answer for New Castle’s money problems

NEW CASTLE — So what’s worse, a one-mill property tax hike or a $1-per-bag increase in trash costs?

That’s essentially the unpleasant choice facing New Castle residents next year. The city’s Act 47 team had recommended the property tax boost as part of New Castle’s recovery plan update.

Unhappy with that possibility, members of city council instead are proposing a hike in city’s blue trash bag fees, from $2 to $3 each.

Both plans are intended to generate roughly $400,000 for the city budget, money that’s needed to help deal with rising pension costs in the coming years.

Arguments in favor of adding to the blue bag fee are that it impacts renters as well as property owners. But the case could be made that landlords raise rent to cover expenses whenever property taxes go up.

Another big difference with a high blue bag fee is that this falls solely on individuals, and not businesses, the way property taxes do.

To some extent, people can control their garbage costs if they recycle properly. But if the fee increase leads to reduced blue bag use, that will cut into the revenue the city anticipates.

Ideally, the city’s blue bag system is based on fairness. People pay only for what they use. Unfortunately, there are concerns the requirement to purchase individual bags for trash disposal encourages illegal dumping by people who don’t want to pay.

Lurking behind the issue of how to generate new revenue in the city is the fact there is more pain to come. The Act 47 team, tasked with finding ways to keep New Castle’s revenues and expenditures in balance, is proposing an additional one-mill tax hike in the future. The fiscal problems the city faces won’t be resolved by a single jolt of $400,000 in fresh cash.

Faced with the chore of looking at ways to cover costs, members of city council have been engaged in a painful, but necessary, discussion. It includes a push, led by Councilman Tom Smith, to find ways to cut costs as well as raise revenue.

Among other things, Smith is proposing the city look at privatizing trash collection and other services. If any such efforts help to lower the costs of the typical city resident, they are worth pursuing.

However, it should be noted that if the city gives up a revenue stream, such as garbage collection, the problem of pension costs doesn’t go away with it. New Castle government still must make its ends meet.

The harsh reality is that there is no easy answer to New Castle’s predicament. Obviously, we encourage efforts to pursue efficient and cost-effective delivery of services. City officials need to be engaged in these discussions, not just looking at what fees to boost.

And the city needs to reach out for support from other entities and organizations. New Castle’s fate will impact all of Lawrence County.

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