Fresh off his re-election victory, Mayor Ed Pawlowski vowed no property tax increase “for the ninth straight year in a row” when he formally presented his proposed 2014 Allentown budget to City Council Wednesday night.
City Council will learn more about the $89.4-million budget at five public meetings this month. Final adoption of the budget is scheduled for Dec. 4.
Pawlowski said the proposed budget is “a continuation of the austere spending and employment practices we have pursued these past eight years. It maintains essential city services while reducing costs where appropriate.
“We continue our relentless effort to cut expenses throughout all city departments, to do more with less, to utilize taxpayer money wisely and to find new and/or increased sources of revenue.”
Enriched with more than $211-million from the 50-year lease of its sewer and water systems, Allentown will not have to dip into its reserve fund to balance the 2014 budget, said the mayor.
But even without any city real estate tax increase for nine years, Pawlowski noted Allentown School District continues to increase its taxes every year and warned city residents may move to the suburbs “if we continue to increase property taxes.” He said that’s why Allentown’s property tax will not increase in 2014.
The mayor also said there will be no increases in the business privilege tax, the $52 local service tax and the refuse collection fee.
He said there will be a slight decrease in the earned income tax in 2014, from 0.35 to 0.33 percent, but did not explain to council how much more money that will put into the wallets of those who work in the city and pay that tax.
Pawlowski indicated that earned income tax gradually will be phased out “as pension payment requirements ease.” He said that can be done because of additional revenue from the lease of the city’s water and sanitary sewer systems to Lehigh County Authority and from new property tax revenue that will come from buildings completed in the center-city Neighborhood Improvement Zone.
He explained the hockey arena/entertainment complex is tax exempt, but the city will get property taxes from the two new buildings next to it – the Renaissance Marriott hotel along N. 7th Street and the office building housing Lehigh Valley Health Network along Hamilton Street.
He said the new building that will be the home of National Penn Bank on the northeast corner of 7th and Hamilton also will go on the tax rolls in 2014.
He noted all those buildings, as well as others planned in the city’s designated NIZ areas, also will bring many new jobs to Allentown.
Jeanette Eichenwald had an initial question for the mayor. She said the Wall Street Journal has reported the city has only seven days of reserve funds and asked: “How will this change under this new budget?”
Responded Pawlowski: “We have $13 million in unrestricted cash. We have a lot more than seven days of reserve funds. We have 14 percent of our entire general fund balance now in reserve. That will help us with – I don’t know –almost half a year, if not a year, of additional revenue we can utilize if we need to, if there is some sort of financial collapse in the marketplace.”
“It will give us one year of reserve?” asked Eichenwald.
“I don’t know exactly what that date is,” responded Pawlowski. “I know you want to nail me down and then try to beat me up on that later.”
That comment generated some nervous laughter in the audience.
The mayor continued: “We went from basically $100,000 to $13.4 million. It gives us a significant amount of reserves for any financial condition that may come before us.”
Pawlowski explained about 77 percent of the city’s budget goes to pay personnel and benefits. He said the city staff again was reduced this year, adding Allentown will have 786 employees in 2014, compared to
949 in 1980.
“We are doing more with less and we are maintaining essential city services as well as keeping our costs low to the city taxpayers.”
Pawlowski’s budget overview touched on numerous areas, including:
• $250,000 has been added to the budget for additional street maintenance.
• All city streets vehicles will be fitted with GPS devices that will
enable supervisors to electronically monitor not only where all those vehicles are, but also what they are doing. Those devices will even detect when blades are down for snow removal.
• The city will expand hours of operation at its yard waste recycling
locations on Mondays and Fridays.
• Collections of electronics are being expanded to twice a month.
• The recycling drop-off center will be moved behind fences at Oxford
Drive and Fish Hatchery Road to eliminate illegal dumping at the existing site.