Wednesday, November 14, 2012

Is Callahan's Proposed Tax Hike Political Suicide?

From his perch in the Big Apple, urbanist Jonathan Geeting regularly instructs all of us in what we're supposed to think. And I'm a bad boy who would certainly be sent to re-education camp in his Orwellian world. Yet I find myself in agreement, at least to some extent, in his post about Bethlehem's proposed budget. It is innovative.And it displays political courage in a world where that quality is in short supply.

Details are contained in Lynn Olanoff's Express Times account, and include the following:

* A 5% ticket tax for entertainment events at venues like the Sands Casino.

* $1 million payment in lieu of taxes (PILOT) from entities like Lehigh University and Moravian College, which are exempt.

* $1.2 million from the sale of city-owned parking lots to the Bethlehem Parking Authority.

* Raising $500,000 per year by converting to a single trash hauler.

* An 8.5% property tax hike.

As Geeting points out, this is a pretty gutsy move by Mayor John Callahan, especially since he is eyeing a run at Northampton County Executive next year. His proposal almost guarantees that former Executive Glenn Reibman will mount a challenge. I can see the mailers now.

But after years of juggling money between different accounts to keep current, this is a refreshingly honest approach to government. It also avoids the game that politicians like Reibman play. They deplete cash reserves until the cupboard is bare, and then impose massive tax hikes.

The ticket tax and sale of city-owned parking lots are no-brainers. I particularly like the ticket tax because it softens the blow on home owners with fixed or even reduced incomes. The PILOT is great ... if you can get it.

But two aspects of the proposed budget are troubling.

Converting from 19 to a single trash hauler is simply insane. In 2010 and again in 2011, Callahan was nearly ridden out of town on a rail for merely suggesting the idea.

These 19 private trash haulers are the very kind of small business that made this country great. They do things you just won't find if a big operator like Grand Central takes over. When someone is down on his luck, they will sometimes "forget" to bill the customer.

I also question whether Callahan could ever get support for a single trash hauler from City Council. At a debate last year, Council members Bob Donchez, Willie Reynolds and Recchiuti all stated they oppose the idea.

Then there's the 8.5% tax hike, which seems a tad high for a City getting so much casino money. But services have already been cut to the bone. Additional cuts would likely be irresponsible.

Suffice it say that Bethlehem is facing a long budget season because nobody, including the Mayor, likes a tax hike. But instead of cooking the books, as politicians are wont to do, it's refreshing to see an honest approach.

38 comments:

Anonymous said...

O'Hare you are a real coward. Fortunately, you are not the only blog any more and the truth will come out.

Is how much they are giving you worth your self respect?

Anonymous said...

You are now a true whore owned by the Callahan campaign.

Charlie Dent must be disappointed in you.

Anonymous said...

Maybe the mayor isn't going to run for another office. Hasn't he tried a few and lost. Seems he's at home at city hall and folks like him in that seat.

Anonymous said...

His actions display true leadership, something many currently in elected positions in Northampton County lack.

Anonymous said...

Raising taxes is the new black. Didn't you pay attention to the election? Tax raisers who refuse to cut spending are now considered courageous.

Let wealthy people pay for everything. They have plenty of dough and good lives. And they likely stole their fortunes, anyway.

Guy Williams said...

This is a tough problem we all face but have an idea to put forth. At this time john should also announce that to be fair at the next contract negotiations for city workers he will insist on an 8.5 % reduction in pension obligations going forwoard.Not salary but pension benefits.Now thats courage and fair.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

And the college's are going to cough up their share of the money? This is wishful thinking on Johnny Casino's part but I give him credit for floating some new stuff. I'd hit the casino harder than what he proposes..they're swimming in cash..GO GET IT!

Anonymous said...

This may be a case of catch up with Mayor C. Trying to make up for the past years magic budgets. I would be concerned as a resident/tax payer of Bedlam.

Ron Beitler said...

OK so the casino's were sold to us by fast eddie because of the property tax reduction. To say the least... this has been disapointing. Ok so... if we're not getting what we were sold with the property tax relief then ya... I definitely support the local gov't's taxing the Sands.

Bernie O'Hare said...

At 6:56, Mark Baker posted a comment, but there was a lengthy gap in it. Mark, hope you don't mind, but I have edited your comment to remove that gap, old boy.

Below is Mark's comment:

anon 2:05, 4:59 - WTF is your problem

anon 5:37,

he can not run for maor again - term limits

anon 5:59,

Bingo!!!!!!!! JC has guts. He will win when the truth comes out.

Bernie O'Hare said...

It's ironic that the comment at 2:05 AM, calling me a coward and suggesting that I am being paid, is anonymous. And i am the coward??

Bernie O'Hare said...

8:18, I f you want to smear another religion, do it on another blog.

Bernie O'Hare said...

"And the college's are going to cough up their share of the money? This is wishful thinking on Johnny Casino's part "

I imagine this would be a very hard sell.

Anonymous said...

The mayor should be going for much more. He's got the captive latte, yes we can constituency. Why stop here?

Americans, and befwummers, have delivered a mandate. They know taxes are the answer, so why not throw the long ball?

They've got the dough, and they can't wait to send it in. It's the chic thing to do.

-Clem

Bernie O'Hare said...

Ron, Agreed. The events tax proposal is innovative.

Anonymous said...

Not finding efficiency in trash hauling because we want to protect "small business" is short sighted. By the way, my "small business" hauler was bought by a company in Michigan over a year ago. Any remaining operators can simply work on contract.

One of the best things about living in Allentown was the twice a week pickup without limits. Now in Bethlehem, there are trash cans out every single day depending on who your hauler is...

Bernie O'Hare said...

You may have a good point, but your comparison to Allentown is not particularly compelling. That City has not exactly been a model for others to emulate.

Bernie O'Hare said...

Also, gthe beauty of multiple haulers is that if one of them sells out or starts performing badly, you can switch.

Anonymous said...

Several issues with the proposed budget that will place the city in further debt. Yes the ticket tax is a no brainer and I hope City Council supports the mayor on this issue. But selling a capital asset (parking lots) for $1.3 million and paying operating costs is what this mayor does best. Where does the $2.6 million come from next year? (you still have the expenses and you don't have the sale therefore you have a budget gap of $2.6mm). And betting on PILOT? You may as well take taxpayer money to the Sands. They way I see it the Mayor wanted to look good politically so he fabricated a budget based on wishes and selling assets. Both leave Council with a gap of finding $2.5 million and they will be blamed for raising taxes or fees and not the mayor. He gives them no choice. the lack of leadership is troublesome.

Anonymous said...

Excellent points Anon 11:26. And STILL an 8.9% tax increase when even the cities of Allentown and Easton have held the line. So much for the well-managed Bethlehem. I gues they have been fooling a lot of us for years. And go after the Sands???? I think they are already taxed like 60% or more by state and local. Didn't I read that they pay us in the city more than $9 million a year just in host fees? City Council has its work cut out for them. As for leadership, I don't see that in this budget.

Anonymous said...

As Charlie Dent and tye "old" Bernie O'Hare told us, Callahan is an incompetent Mayor. He has squandered the golden goose of the Casino and is trying to straighten out the mess he has put the city in. Put we have an inl;aid star on Main Street.

It is mazing O'hare can condmen Reibman and praise Callahan in the same sentence. Callahan has many of the same cronies and some new ones that are even more vicious.

Anonymous said...

Anon 12:21-

The star on Main Street, and the improvements to the sidewalk and street were paid for by a private company, as a gift to the downtown. No City tax money was spent for the star or the bricks.

Anonymous said...

Now you're going to delete smears against religion? Let them stand. You're protecting the intolerant left by your censorship. Light needs to shine on cockroaches. Show them for what they are.

Anonymous said...

Any one who knows about the budget knows that the money that is coming in from the Casino is paying for legacy pension costs. I forget the exact numbers but city pension costs have increased some where around 10 million since Callahan took office and the casino revenue doesnt even cover all of that.

Anonymous said...

I commend Callahan for not taking the easy way out, he only has one year left as Mayor and could easily have taken some easier avenues that some other Mayors have taken to make his County exec run more obtainable.

Anonymous said...

Its NOT political suicide unless Bethlehem City Council approves them.

Anonymous said...

my money is still on Panto to run for Executive but I fear his loyalties to his city will keep him form doing that. But unlike our Mayor, Panto has turned his city around, whereas ours has hurt us financally even with the money from the casinos.

That said, I also believe that the enxt Executive is going to have a really difficult time repairing the wrongs. There are so many. Callahan has the skill set required. He is a leader, but ever since his run for Congress he has become more of a poltiician. We don't need a politician in the office. A politician will not make the changes needed when they constantly look to the next election. That's why I wish Panto would run. Callahan is young and while I applaud youth, I think he may not want to rock the boat and cause his ouster.

Regardless, he needs to straighten out our city before he leaves and this budget has too many "poltical holes" in it.

Anonymous said...

I believe that the parking authrity is broke. So let's sell them the parking lots. They will borrow to pay the city and then THEY will raise parking fees to pay off the debt that they didn't want to begin with.

Will Artsquest pay their fair share of ticket revenue? If I go to a college concert will I have to pay a tax? Will the high school musicals be charged with collecting taxes? That's one way to create jobs.

What about selling the rights to a single hauler. If you are against having multiple small haulers every day of the week, zone the city and restrict collections to one day a week for each zone. I thin k Johnny Casino has created a mess for someone else to fix and is trying to say he is making the "hard" decisions. He should have been making them for the past 8 years.

Anonymous said...

People are just shooting the messenger at this point. Bethlehem and every other municipality at this point are trying to find present revenue in a crap economy for past costs.

The words "pension liabilities" will be in everyone's dictionary in under ten years as these bills only grow bigger. The squeeze is only in its infancy.

And nobody knows how to solve it.

It's probably going to be the biggest issue of the time around 2020.

Anonymous said...

The old Sal Panto job seeker is still at it. Dude, give it up.
Sal saw the Callahan bankroll and retreated to he saftey(????) of Easton. He is not running and people won't vote for someone who needs to be "begged" to run.

Sal is no prize and neither is Callahan but it looks like Callahan is running and
Sal is not. Easton will keep him on for a while like they did the first time he was Mayor, eventually they will tire of him like they did the first time.

Anonymous said...

Can't see Callahan as Executive. He doesn't even know what a county does. Is there an Easton bar like the Apollo for his cabinet meetings?

Anonymous said...

Government is good. Ask the majority that voted for Obama. The Bethlehem Mayor is doing nothing different than what Obama is proposing, raise taxes with little or no cuts. Last I looked, Bethlehem City supported Obama, I am sure they will support the Mayo.

Anonymous said...

Dear 6:29,

Yes, government is good as long as Romney and his billionairres arent running it..Thank God...Callahan has cut many positions in Bethlehem, so your argument there is crap..What he should have done is what Republican Ken Smith had done. Raise taxes moderately every other year or so and keep the city in good financial shape..Now he is forced to raise revenue at a significant rate. He'll never get the single hauler through council and I'm sure he knows that. However, when council tosses that idea he'll say it's on them to find the remaining revenue..Smart..
In regard to the casino , the revenue there was meant to keep property taxes at bay which it mostly has done..To say it should cut taxes is silly and Dent's argument in that regard was pure political bullshit..Callahan's problem there was that he and the county let millions of casino money go to Allentown, Lehigh County, and Easton that should never have gone there. No leadership in that regard..Tax the crap out of the Sansds . Adelson apparently has millions he can throw away on political campaigns. I'm sure the event center can handle the extra ticket fees.They are way overpriced already and no one seems to notice..

Anonymous said...

Courage? Not sure, since he is a soon to be ex-mayor due to term limits. He will not face wrathful Bethlehem voters Bernie.

Waste Haulers- Eliminating 19 haulers puts small businesses out of business. I think a better solution to the stated concern (trash out on streets every day) is simple. Divide the city into zones and designate two pick ups. If you use Hauler A and reside in Zone 1, Tuesday is the day and so forth.
Non profits- Housing authorities have paid the PILOT (payment in lieu of taxes) since 1937. St. Luke's, Moravian, Lehigh and others should be in a position to do the same. The old reasoning that said they are exempt because they provide a needed service is especially outdated, since the question becomes "how many persons of average means benefit from a Lehigh or Moravian education, when the cost is now $50,000 per year?"

As for JC's "courage", show me the politician who makes these suggestions while he is in office and faces reelection and I would accept this profile in courage.


VOR

Anonymous said...

You may have a good point, but your comparison to Allentown is not particularly compelling. That City has not exactly been a model for others to emulate.

How so? Trash service was great in the many years I lived in Allentown. Twice a week too.

Anonymous said...

You can take my trash hauler over my smelly dead body!

Bobby D., if you vote for this I vote for Willy.

Willy, if you vote for this I vote for Bobby D.

Anonymous said...

He ran the city into the ground. Some political courage.