Even though it went away for a while, it never really went anywhere. And likely, that will once again be the fate of any discussion of a home rule charter for New Castle.
The topic arose last week during a public meeting for a report on the city’s financial condition completed by New Castle’s Act 47 coordinators. The study included the proposal that, before the end of 2019, the city compile a three-year plan to shed the distressed community status that it has borne since 2007.
Home rule, at first glance, seems a viable tool in accomplishing that. Communities with home rule charters are able to tailor their governmental organization and powers to suit their special needs, allowing them to streamline their governments and create other previously nonexistent efficiencies.
But perhaps the biggest attraction is a greater flexibility on taxes.
As a distressed city under Act 47, the city is permitted to impose a wage tax on non-residents who work in New Castle. Act 47 status also permits the city to tax city residents above the state-mandated 1 percent level.
Without Act 47, the city would be limited to taxing its residents, and only at the 1 percent level.
Home rule, though, would allow the city to increase the tax above the 1 percent level to generate the revenue lost from non-residents by exiting Act 47. Or, the city could produce the revenue through a combination of wage and property tax increases.
But one doesn’t make the switch to home rule oversight by simply saying, “Let’s do it.”
The first step is for voters to elect a study commission of city residents. If the commission recommends a home rule charter, it would have to receive voter approval in another election. And if adopted, any subsequent changes would need voter approval as well.
Now let’s go back to the tax thing.
Were the city to exit Act 47, it no longer would be able assess the wage tax on nonresidents. That means city residents would be needed to pick up that lost revenue in the form of a higher wage tax on themselves.
Has anyone ever voted to pay higher taxes?
Moreover, meeting a directive of the city’s Act 47 recovery
plan in 2013, Mayor Anthony Mastrangelo, councilmen William Panella and Richard Besherro, business administrator Stephanie Dean and solicitor Jason Medure formed a committee to gauge the benefits and drawbacks of home rule, and to produce a report on their findings.
The panel decided against pursuing home rule, with a report prepared by the Act 47 coordinator stating that “While the committee recognizes the financial and operational benefits of organizing city government under a home rule charter, the committee does not feel those potential benefits outweigh concerns that the study commission process is open ended, and there is uncertainty what other changes would be pursued through home rule.”
Specifically, those other changes could include a change from the mayor-council form of government, which the city has used since 1968. Is it reasonable to assume that office holders would back a change that could eliminate their positions?
State law does allow for citizens to petition for a government study, but again, there’s that tax thing. How many city residents would be enthused about pursuing a change of direction that’s going to hit them squarely in the pocketbook?
We’re not saying home rule is a magic elixir that would fix all New Castle’s woes. However at least 21 Pennsylvania Third-Class Cities — like New Castle — have opted for it, so we think it’s worth another look to see if the passage of six years makes it any better of a fit.
Nonetheless, until another revenue source besides an elevated earned income tax is identified, even taking a peak is going to be a tough sell.