Tax Hike Looms in Bethlehem

At Bethlehem City Council's final budget hearing on December 15, a CPA in Financial Services was among City employees begging for her job. She offered to work part-time and without benefits. Her plea fell on deaf ears. So did the concerns of firefighter Dave Saltzer, who bluntly stated that the proposed elimination of two positions in his department "is going to increase the potential for more disasters." In fact, City Council voted to freeze all step increases for all non-union workers, and deferred a 1.5% annual increase until July 1.

These are just some of the painful measures that appear likely in what Mayor John Callahan called the "most difficult budget" he's encountered in his 13 years in city government. And that pain will extend to taxpayers, too. Council member Eric Evans also proposed a 3/4 mill tax increase, which is expected to bring in a little over $1 million next year. That tax hike was approved 5-2, with Council members David DiGiacinto and J. William Reynolds voting No. In addition, Council intends to borrow another $16 million for unpaid bills, which includes $1.2 million for the City's annual pension payment.

Callahan had asked for $20 million, and had said he could live with $18.5 million. But he'll have to make do with $16 million.

An independent audit of Bethlehem's finances revealed that in 2009, Bethlehem was several months late in making its annual pension contribution. City administrators blamed the late payment on cash flow problems, and assured Council President Bob Donchez during an August Finance Committee hearing that this year's payment would be on time.

It now appears the money must be borrowed.

Callahan's administration also wants to borrow $6 million for capital projects, including a new EMS Center and upgrades to the City's 911 system. City Council authorized a loan in August, but Mayor Callahan told Council he spent the money on medical costs and now is asking to "replenish" the fund. At Donchez' direction, City Council Solicitor Chris Spadoni asked to review the loan documents, but they were still available before the hearing.

"This city budget has been a disaster and farce from the start," complained Dana Grubb, a former city worker. "No city administration has ever shown such little integrity or alienated the city workforce like this one has." Mayor Callahan poured himself a glass of water as Grubb spoke.

Karen Dolan, who dominated much of the discussion during a five-hour hearing, was irritated that money borrowed for capital projects was spent for something else. "It's distasteful and we don't like it. ... There's a mess and we gotta' clean it up and do better next time and every time in the future."

David DiGiacinto was all for letting City administrators solve it themselves. "There's no funding for it. There's no revenue source," he complained.

DiGiacinto, Dolan, Evans and Donchez all proposed $350,000 in reductions to Callahan's budget, some for as little as $500. DiGiacinto even suggested that the City should consider selling its golf course, which is losing money.

Although Reynolds chairs the Finance Committee, he offered no spending cuts. He instead focused on the golf course and the advantages of requiring patrons to pay for carts on weekends.

A CPA and fire fighters are being eliminated and step increases are being frozen, but funding for Bethlehem's mounted police unit was left intact. Donchez and Evans had proposed its elimination, but a firestorm of protest erupted, and several police officers and Bethlehem residents were among the seventy-five people at the hearing.

The horses stayed home.

City Council will vote on the final budget on December 21. If the 3/4 mill tax increase is adopted, a homeowner whose property is assessed at $100,000 will see taxes increase $75.

Updated 11:25 AM: The Morning Call, Express Times, Bethlehem Patch and WFMZ all have separate accounts.