Monday, October 03, 2011

Reason for 9.3% Tax Hike? Gracedale

Last year, when Northampton County Executive John Stoffa's introduced what he thought was an innovative "budget of choices," it ignited a firestorm of protest. "John, that budget stunk!" exploded then Council Prez Ron Angle, who exploded during a Council meeting. His behavior earned him an Express Times Turkey. Stoffa got a "big, meaty drumstick" for a budget that left all the tough choices to County Council, or more specifically, Angle.

In Stoffa's 2012 budget, proposed on October 1, he makes all the tough choices himself. He's both proposing a 9.3% tax hike and is also reducing the County's "Financial Stabilization Fund," i.e. two months of the general fund, from $25 million to $20 million. More importantly, he's drastically reducing the unassigned fund balance, i.e rainy day fund, from its current $16 million level to just $2.4 million, about half of what should be there under governmental accounting guidelines adopted by Council in December 2010.

According to Acting Fiscal Affairs Director Doran Hamman, this reduction could have a negative impact on the County's bond rating.

It's the worst of both worlds.

Why?

In a word, Gracedale. Stoffa explains that himself in the opening line of his budget message (located here on the County webpage). "Decisions that occurred in 2011 will have a serious consequence on the 2012 proposed County budget. In particular, the decision by the voters in the May referendum to retain Gracedale will prompt necessary capital repairs at the facility along with a County contribution of $7.2 million to balance the Gracedale budget ... the equivalent of a mill of tax ($7.4 million). Had the facility been sold as anticipated, a $35 million revenue source would have occurred and the necessary $20 million in identified capital expenditures would have been avoided. Nevertheless, the voters have spoken."

While the County's 2012 Budget is impacted by numerous other factors, from the swaption to rising personnel costs, there is no question that the County's retention of its aging nursing home is the seminal reason for the proposed tax hike and dangerous dip into the general fund. Had Gracedale been sold, the issue being debated right now would be how much money to return to taxpayers.

In addition to the $7.2 million needed at Gracedale next year, another $2.4 million is still needed for this year. Hamman stated that a budget amendment for this money will be sought in December.

Stoffa stated that he'd be seeking a tax increase of 20% were it not for the Guaranteed Energy Savings Agreement approved by Council last month. That will enable the completion of 21 projects at the nursing home next year. But the $13 million in costs will be financed from utility cost savings that are guaranteed by McClure Company, a subsidiary of PPL.

"I'm not blaming Gracedale necessarily for the tax increase," stated Stoffa at a news conference in which the budget was released on Friday. "But the fact that we have to $7.2 million into Gracedale is the equivalent of one mill."

After Gracedale, the next biggest bogeyman facing Northampton County is former Executive Glenn Reibman's folly - the 2004 swaption. I'll tell you about how that impacts the budget in the post below.

41 comments:

michael molovinsky said...

stoffa said never the less, the voters have spoken, but now i will punish them. perhaps if he had run and maintained gracedale better, neither the unpopular sale attempt or this huge tax increase would be necessary.

Anonymous said...

Molovinsky is right on the money. How about the understaffed admission department that could not follow up on referrals. If they were fully staffed and supported by Stoffa and that puppet Marcus Gracedale would have probably 100 more residents.

Tom Foolery said...

Everyone was told their would be an increase if the Gracedale initiative passed..Taxes haven't been raised in years..It's about time we have a moderate increase rather than privatizing Gracedale.The cost of the increase is about a dollar a week for the average taxpayer..It's a small price to pay to see that our seniors are taken care of. I, like the vast majority of property taxpaying residents of this county, voted to keep Gracedale in county hands and i'll gladly pay the extra dollar a week to pay for it.

Anonymous said...

Tom,
Normally, I'd agree with you. But lets not forget that the Gracedale referendum was not unanimous. If 100% of the voters said to keep it, I'd say, yeah, lets raise taxes. But what about the 6,000 folks who voted no? Do they deserve a tax hike ?

Anonymous said...

Hey guys, take it from us...decisions have consequences. We've got a quote for yous: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

Yours,

Jimmy Carter and Barack Obama

Tom Foolery said...

Well 9:10,

Actually they do..It's called Democracy...If they listened and heard Stoffa, Angle, The Express Times, and the Morning call tell them there would be a tax increase if this passed and they were concerned about that, they should have worked to defeat the measure..
Either way, the County has avoided tax increases for years..Lehigh County increased taxes by almost twice as much..The County was hit hard by Corbetts cuts to Human Services. If you want to complain, call Corbett's office..His cuts to Education and Human Services have cost taxpayers millions in increased proerty taxes..Thank You Tom!

Bernie O'Hare said...

Tom, Actually, it's about twice that. About $100 per year on the average or slightly under average home. I agree that the people voted to keep Gracedale, but they were not informed of the consequences of keeping Gracedale. Instead, they were lied to and told that seniors would be moved many counties away and that Gracedale would close, etc. Although I failed to prove it completely, there was wholseale election fraud. But I do agree that, from time to time, a tax hike is necessary.

Bernie O'Hare said...

"stoffa said never the less, the voters have spoken, but now i will punish them. perhaps if he had run and maintained gracedale better, neither the unpopular sale attempt or this huge tax increase would be necessary."

Stoffa is governing. Government should NOT be in the nursing home business, and it has NEVER been managed well, from long before Stoffa was Exec. Stoffa was the first Exec to acknowledge this.

Also, had Stoffa wanted to punish the voters, they would be looking at a 30% tax hike. He could simply not bother with a GESA and charge taxpayers for ALL the improvements.

Instead, in an effort to mitigate the cost, Stoffa (1) got private management to do what government does poorly; and (2) implemented a GESA that will save $13 MM of the $20 MM in costs for capital improvements needed at Gracedale.

MM, Stoffa is not a vindictive person and would never lash out like that. His obligation is to implement the people's will in the most cost effective way he can. He has tried his best and came in lower than he thought he would.

Anonymous said...

My understanding is that one mill brings in about 7.2 million.That would cost the average taxpayer about $50. a year...Stoffa increase is a bit higher than that but i doubt we are looking at $100. increase...Either way, Stoffa asked for an increase years ago and Council keeps rejecting that..Gracedale aside, everyones costs increase and you cannot continually use Gimmicks, as bethlehem does, to increase revenue. It'll bite you in the butt. Also, the County should never have let Easton get $450,000 a year in table game revenue..That should have gone to the County..Someone was sleeping there..And then there is the swaption..Then there is Corbett's cuts to Human Services which will get worse as years go on..I'm just surprised the increase is this low..However, if they didn't hit the rainy day fund, it wouldn't be.

Bernie O'Hare said...

$50 on a $50,000 home. Check the budget message online.

Anonymous said...

Because government should not be in the nursing home business (I agree) is no excuse for improperly running something he was elected to run. He mismanaged the place, handled the sale terribly, and is punishing taxpayers by making them pay for his mistakes.

A lifetime bureaucrat has delivered another tax increase while blaming constituents. What an typical arrogant political ass. This is the kind of incompetence that earns multiple public pensions. Stoffa has essentially stolen his.

Anonymous said...

So how much money is needed for Stoffa's DUI Center that is now indeed turning into a prison. Why not take up the offer that Lehigh County gave Northampton County. Hmmmmmmm could there be underlying factors with Atiyeh! I am sure you are privy to that Bernie O'Hare!

Anonymous said...

No head count reductions? Just higher taxes? That's a career government guy protecting his own.

Anonymous said...

i think there was plenty of information about keeping gracedale in the county hands. during the campaign, there were many many articles in the papers stating there could be a tax increase. so be it... if there is a need to raise taxes to maintain gracedale, i'm all for it. that is one of the greatest places for our county residents to go. i had my grandmother and my mother there. they took extremly good care of them both.. i vote increase the taxes, keep the excellent care.. and increase the staff to provide the care that these people need.. thank you people that care!

Bernie O'Hare said...

Right now, there is more staff than residents, and you want to increase it?

Bernie O'Hare said...

"No head count reductions? Just higher taxes?"

There have been in reductions in staff in county government over the last year. It is about as low as it can go without jeopardizing services. The single exception here is Gracedale, but that is in the hands of private management now.

Anonymous said...

guess you just don't like to have the residents taken care of.. the people know how your are.. and besides one never knows their future, it could be you or myself laying there in a bed at gracedale, with a skeleton staff to care for you.. that seems fair to, not to me. I know how hard they work there. You have NO idea of the type of work. you were a lawyer and you had to use your brain, not your body....

Bernie O'Hare said...

"So how much money is needed for Stoffa's DUI Center that is now indeed turning into a prison. Why not take up the offer that Lehigh County gave Northampton County. Hmmmmmmm could there be underlying factors with Atiyeh! I am sure you are privy to that Bernie O'Hare!"

I can't help you if you don't know how to read. I specifically state that the budget calls for $1.8 MM. In previous posts going back as long as 3 years ago, it is made clear that NC judges do not want to send inmates to LC. The judges are entitled to some deference on a matter like this.

Also the suggestion of "underlying factors" is just more bullshit from troublemakers quick to make baseless allegations, as long as they can do it anonymously. So is the claim that I am "privy" to these discussions. I have had nothing to do with them in any way.

Bernie O'Hare said...

"guess you just don't like to have the residents taken care of.. the people know how your are.. and besides one never knows their future, it could be you or myself laying there in a bed at gracedale, with a skeleton staff to care for you.. that seems fair to, not to me. I know how hard they work there. You have NO idea of the type of work. you were a lawyer and you had to use your brain, not your body."

I at no time said I do not want residents cared for, or that Gracedale should operate with a skeleton crew. I pointed out that there is a lot of dead wood there, and there is when the staff is in excess of the patients. That's just common sense, even from people who aren't used to using their brains.

Bernie O'Hare said...

"guess you just don't like to have the residents taken care of.. the people know how your are.. and besides one never knows their future, it could be you or myself laying there in a bed at gracedale, with a skeleton staff to care for you.. that seems fair to, not to me. I know how hard they work there. You have NO idea of the type of work. you were a lawyer and you had to use your brain, not your body."

I at no time said I do not want residents cared for, or that Gracedale should operate with a skeleton crew. I pointed out that there is a lot of dead wood there, and there is when the staff is in excess of the patients. That's just common sense, even from people who aren't used to using their brains.

Anonymous said...

"In addition to the $7.2 million needed at Gracedale next year, another $2.4 million is still needed for this year."

If I am not mistaken the reason for still needing 2.4 million this year is that ANGLE only budgeted for half of 2011.

Had it been budgeted for the year we wouldn't have this issue.

Anonymous said...

Why didn't this guy raises taxes incrementally over the years instead of one big increase? "Whoops, look we need all these repairs and our costs are rising! We thought we could just ignore these expenses! Sorry!"

This is the problem with these no-tax clowns.

Anonymous said...

Normally, I'd agree with you. But lets not forget that the Gracedale referendum was not unanimous. If 100% of the voters said to keep it, I'd say, yeah, lets raise taxes. But what about the 6,000 folks who voted no? Do they deserve a tax hike ?

Um, that's how a democracy works.

Anonymous said...

I at no time said I do not want residents cared for, or that Gracedale should operate with a skeleton crew. I pointed out that there is a lot of dead wood there, and there is when the staff is in excess of the patients. That's just common sense, even from people who aren't used to using their brains.

I wasn't aware you were in the medical field. How many staff members does it take to get an elderly person who cannpt walk or even get into a wheelchair to the bathroom? How about to take a shower? When 5 residents ring a bell for assistance at the same time, should one person just decide who's going to wait and who's going to get taken care of first? How many people do think covers feeding residents all at approximately the same time three times a day? Should just one person deliver meals so the last 30 or so are cold?

I suggest you walk into a nursing home sometime and think.

Bernie O'Hare said...

I know of no nursing home, other than Gracedale, that has more staff than residents. Think about that.

Anonymous said...

"There have been in reductions in staff in county government over the last year. It is about as low as it can go without jeopardizing services."

Yeah right. That's what career takers say when they protect their own and raise taxes to support yet another public pension.

Stoffa and Reibman are the same ass.

Anonymous said...

Mr Ohare

Did I understand correctly, that the state dictates the patient/worker ratio?
And Gracdale is overstaffed?
Why wouldn't the county management follow the rules for staffing?
We would hope the new managers will cut this staff overage.
Prehaps these excesses once cutailed will make the bottom line improve.

Bernie O'Hare said...

I'm no expert, but believe Pa. has no laws to govern nursing patient ratios. There is legislation pending, but even that does not address nursing homes.

Anonymous said...

everyone should have there property re-assed everyone's taxes would have to down in this economy...

Dave said...

Slightly off topic but can you confirm that Ron and Scott will debate each other on 10/18? Word is that this will be a moderated event at the Wind Gap Fire Co. hall. Thanks Bernie.

Bernie O'Hare said...

Yes. I believe there is another one, too, w/ LWV. I'll get the date. I'll do a post about this.

Dave said...

Thanks Bernie. Please keep us updated on these encounters and the dates and times as you can.

AMOrlando said...

Anon @ 10:21 AM offered a "quote" on democracy from Presidents Carter and Obama. It's actually a quote from HL Mencken, who also famously noted that the most dangerous person to any government is a person who can think for himself. But I prefer this quote on democracy from Ben Franklin "Democracy is two wolves and a lamb voting on what to have for lunch." In this case, the "lambs" are getting a bigger tax bill.

Anonymous said...

career takers

Is that what you call the nurse putting a new diaper on your family member in a nursing home? Yeah, they sure are living the high life. Get a clue. Do an honest day's work.

Anonymous said...

annon12:10
AMEN!!!!
until you do the dirty jobs, don't critize those who do!

Anonymous said...

I do not believe in this budget!

Anonymous said...

Isn't it true that if the patient population goes up at Gracedale, so would the cost to taxpayers? Doesn't keeping the population down reduce the costs?

Bernie O'Hare said...

No. The lower the census, the more it costs the County. The County gets more money the higher the census.

Anonymous said...

This blog is a farce!
Why do we need a tax increase at all when we are running a surplus??
Why are you repeating the same lies over and over?
Money for rich pols and their friends to build DUI centers and private prisons but no money for decent care for our elderly!

Anonymous said...

This is a propaganda piece by O'Hare for his benefactor Stoffa.

Anonymous said...

I don't believe there is more "Hands on Nursing Staff" at Gracedale than there are Residents. I believe you are accounting for Housekeepers Dept, Laundry Workers, Kitchen Workers, Activity Workers, Paper Pushers etc....there are alot of workers that don't provide Hands on Care but do provide the extra's that any home requires. Don't forget the Administrative Deptartments who barely ever set foot on a Care Unit.