Friday, October 11, 2013

Northampton County Should Raise Taxes Now

His technical job description is Acting Director of Fiscal Affairs. But in his 30+ years with Northampton County, Director Doran Hamman is actually a mentat, a computer in human form. And the mentat says a tax hike is on the horizon. I don't know how it can be put off another year, and think it might really be necessary now.

When the mentat spoke of this week's budget hearing, he said there was a $42.6 million fund balance at the end of last year. This includes a stabilization, or rainy day, fund. That should be between $8-16 million, enough to pay for one to two months of expenses without a dime of revenue coming in. According to the independent auditor, there should be four to five months of expenses.

By the end of this year, the mentat predicts that the fund balance will drop to about $33 million. Of that sum, $19 million will be committed to balance the 2014 proposed budget. This will leave just $14 million in the stabilization fund, under the two-month threshold. If the County spends less than the committed $19 million to balance the budget, its rainy day fund will go up If the County spends more, the rainy day fund will go down. .

So at the end of next year, the money just may b not be there to balance the budget. That will mean a tax hike.

"Our revenues are not the problem, other than the fact that the real estate tax base is stagnant," noted Hamman.  "We have a pretty good handle on what the revenues are going to be." Eight years ago, when the 2006 Budget was presented, the tax base generated $3.1 million in additional revenue. Now, it's under a half million dollars. "The growth of the tax base has shrunk significantly."

"What hasn't shrunk is the salaries, fringe benefits and operating costs of any government entity."

"As the County continues to spend, while the revenue growth shrinks, the only alternative without raising taxes is to deplete the fund balance."

Ken Kraft asked if the County should be raising taxes now.

"If you don't have one this year, it's on the horizon," answered the mentat.

Then though AFCME was gone, Kraft made a speech full of inaccuracies. "It's been on the horizon for seven years. What I see on the budget is we keep not filling positions, we keep making people do more, we take from people here, with like their $4,000 co-pays for health care, and we never really do the hard work, the heavy lifting, to make this a balanced budget, is what you're saying. ... We are shrinking the people we have by not filling these positions all the time, like in 911, and we're balancing the budget in not replacing people."

Stoffa: "Ken, we haven't shrunk the workforce, the workforce has grown.

Hamman: "The workforce has grown in the last eight years by about 60 FT positions."

There are 1825 full time and 258.5 part time positions.

Kraft is wrong when he asserts the County is not filling positions. The 911 vacancies he mentions - there's six of them - are being filled. And Hamman pointed out that the bulletin board is overflowing with posted positions.

When he released his budget last week, John Stoffa stated that he has tried twice to convince Council on the need for a tax hike. "There's no political will," he points out.

Kraft, union agent Justus James and Controller Steve Barron are instead blaming Stoffa for Obamacare, which they all advocated.

The impact of Obamacare on local government was pointed out in the New York Times in August:
State and local governments across the country tend to offer more expensive health plans than private businesses do, and workers often accept smaller wage increases to retain their benefits. Because of this, state and local government employees are expected to be disproportionately represented among those whose plans will be subject to the tax.
Barron falsely claimed that "the County withheld this important information," at this week's Budget hearing, though this has been public knowledge for some time. In fact, in negotiating union contracts, the County reserved the right to make unilateral changes to health plans precisely because of Obamacare.

Now it's no secret that the public jobs tend to pay less but offer better benefits. If these Obamacare changes can't be reversed, the only solution is a wage hike to be fair. And that would also mean a tax hike.

27 comments:

Bill Coker said...

This is a perfect example of why we moved to South Carolina. We have no unions and amazingly enough, low taxes. Although wages are less, so is cost of living and you can live better for the same money. Just imagine, no public service unions, no school unions, etc. Yet everyone is happy with a job that allows them to live a good life in a low cost environment.

Anonymous said...

Yeah and until yesterday the county did not tell the unions a word despite the mandated "meet and discuss" clause that is also in the contract.

This, like most things are just part of the bullshit sandwich that is the John Stoffa Admisntration. Thank God he will be going the way of Ron Angle in a few weeks.

Will the county ever recover??

Anonymous said...

First it was Gracedale's fault. The it was Glenn Reibman's fault Now it is Obama's fault.

Does John Stoffa own a mirror??

Bernie O'Hare said...

Look, the increases in medical costs and potential taxes have been part of Obamacare for some time. It is no secret. It is why union contracts were written to allow for unilateral changes. Blaming this on Stoffa is ridiculous, but that's you.

Anonymous said...

If it was no secret, why were union members asking for a "meet and discuss" told not to worry. The Admisntration knew this for months putting the budget together and purposely kept the employees out of the loop until the eleventh hour.

So now on top of all the other Stoffa screw-ups that are other peoples fault, his Admisntration hoodwinking all the employees,is the employees fault.

You have been a great flak for Stoffa for the past eight years. If you give Callahan half this much cover he should kiss your feet!

Anonymous said...

South Carolina has the standard of living of a third world nation. Of course the northerners with their Yankee gated communities live large but the rest of the state outside of the coast is a crap hole.

You can have it! No services, no doctors, no nothing. Good old dirt roads.

Anonymous said...

So the union members are shocked that ObamaCare will end up costing THEM more? That's funny, because my recollection is that union leadership were some of the prime supporters of passing ObamaCare.

Maybe they should have read the bill before it was passed.

For now, unions will continue to direct their members to dutifully work the polls for the same Democrat party that has once again screwed them over.

Anonymous said...

The difference in Salaries between County employees and private sector employees has long been erased. They are now on a level playing field as far as salaries and benefits go. Add hese two together and County employees may even be ahead of the game. Yes, years ago County employees were paid better benefits and minimal wage. Vacations, holidays, sick time, personal days, funeral leave, Blue Cross and Blue Shield, family leave, amd a guaranteed pensions have put County employees ahead of the private sector. Where does the private sector give these benefits? Yes there was a time that County workers suffered under a very low wage scale. Not today.

Anonymous said...

God forbid the public sector deal with the same thing the private sector has been dealing with the last few years...stagnant wages and higher health care costs.

Anonymous said...

We need to ask what the average take home pay of a county worker is then, and compare that to the average pay of an equivalent job on the outside. Let's start with the CPAs in the controllers office. What do they get paid take home, and what does a CPA get in the real world?

Bernie why don't you call Barron and ask, I think he went over that when he was droning on and on at the mike on Wednesday, no? Or did u erase that part of your tape?

Anonymous said...

First of all if county employees on the higher end of the pay scale had a better job offer most of them would take it. There are not enough employers looking for these people or anyone for that matter. They take jobs with the county because they first get a job and they also like what they are offered. They certainly have more security with the county.

The next administration will shed light on what you think is the truth. Unless it is Brown then the union commentors will continue to blame the exe.

Callahan has proved he doesn't keep his word so he is corrupt. Which means many will rightfully not believe a word he says. Barron is corrupt also. He works 2 jobs and we pick up the tab. He is lacking honesty and character so he is only believed by his sheep. Great way to raise kids.....

Anonymous said...

Raise taxes to bail out unions from the health care program they championed? Raise taxes to pour more good money after bad into the county's union jobs program at Gracedale? Raise taxes to pay for contracts awarded to high bidders in order to get Peg Ferraro votes? Raise taxes to pay for an exceedingly poor deal on a mammoth human services monument to a guy leaving a nasty financial shit stain as he departs the exec chair with a fist full of government pensions? Raise taxes because a dishonest and corrupt controller doesn't perform audits, steals county time and chases employers and jobs away?

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

Your tax is gone once the county moves all its workers (or a big share of them) out of your stinking little town and into the new Human Services Building. And just think all of them get a 2% RAISE due to getting out of easton.

Anonymous said...

I saw the comment made about comparing the salaries of county CPAs and private CPAs. You need to be sure you compare equal jobs.

Private CPAs do a lot of travel away from home and work incredibly more hours. You can't compare easily the jobs as they aren't the same. I know CPAs who took jobs in govt and nonprofits to reduce stress at home.

Anonymous said...

Yes, there are Lazy non starters in every profession. that is why some people take the easy way out whilst others earn a great living

Anonymous said...

hey 8:33 am, you can blame the current mayor or the current council but the pension benefits awarded municipal employees is the reason. Easton has the best bond rating in the valley and has proven that they manage their finances better than most cities and counties in PA thro all of you accusations and foul language you want,,,,,Easton is moving in the right direction.

Anonymous said...

If Easton is moving in the right direction, why did Panto steal money from county employees and kids making pennies at McDonalds? Was that necessary? And from whom will he steal from when the county moves its employees and their commuter tax dollars from his city?

Bernie O'Hare said...

I oppose the commuter tax, whose impact is felt by people with modest incomes. Not gonna' agree with anybody on everything. But Sal is the best Easton Mayor I have ever seen.

Bernie O'Hare said...

". The Admisntration knew this for months putting the budget together and purposely kept the employees out of the loop until the eleventh hour."

The admin announced the news when it realized it might have to make changes. This is no secret and has been part of the Obamacare discussion all along. It's one reason why I opposed the law. It hurts many of the people it shoud be helping. I am sure the admin will ask to meet with unions. Now instead of pointing fingers and falsely accusing an administration of deliberately keeping you in the work, try to work with them to help fix the problems. Your concerns are very justified. But don't blame Stoffa for Obamacare. I believe (correct me if I am wrong) that AFSCME was a big Obamacare supporter.

Bernie O'Hare said...

8:329, You raise excellent points, I must admit. We are a representative democracy. The people voted for gracedale. They even voted for Barron. So they get what they deserve.

Anonymous said...

And they voted for Stoffa. You are right they got exactly what they deserved!

Bernie O'Hare said...

Except that Stoffa has twice said we need a tax hike and would propose a budget with one if he thought he could get 5 votes. People like Barron and McClure have instead strongly advocated deficit spending.

Anonymous said...

Stoffa ahs no balls. If he were a real "leader" he would propose the needed budget and fight for it. If county council doesn't approve it, the ball is in there court. However, he won't do that. He claims failure without even trying and then blames the county council. He showed the same lack of leadership with the swaption and cost the county millions of dollars.

It will take years to undo the damage his lack of leadership and incompetence he has cost the county.

Bernie O'Hare said...

You show your leadership by failing to sign your name. This hatred is irrational and you should see someone to sort things out. While at it, learn how to spell. I have said the county needs a tax hike, but I am signing my name.

Anonymous said...

The County could save a lot of money by taking health care benefits away from the part time tip staff. These people are so old they probably account for a majority of the use. COUNTY WORKERS SHOULD BE GLAD THEY GET A PAID LUNCH BREAK. Few private companies give this perk. This should be addressed by the administration.

Anonymous said...

This is amazing. Your employers treat you like dogs, they don't pay much, they taker away hours and benefits and your response is make sure the next guy gets screwed as bad as me.

Your grandparents must be spinning in their graves. No wonder the wealthy in this country are the wealthiest in the world. They enjoy the dumbest sheep to fleece.