Their vote is non-binding, but they have ways of making their displeasure known should Easton City Council ignore them. President John Cusick made that clear last night, noting they could simply move all the Wolf Building workforce into Bethlehem.
President John Cusick, noting that nonresidents already pay a Local Services Tax (LST), and feels the commuter tax is actually targeted at the County workforce. He also called it "taxation without representation."
"Where is Easton? Where is the Mayor?" asked Lamont McClure, wondering why Easton had made no effort to discuss this proposed tax with the County.
Bob Werner noted that the Mayor is out of town, and acknowledged Easton does have a pension problem. But like McClure, he was disappointed that Easton sent no representative to argue its case. Werner called the tax a "band-aid," noting that the real problem is in the way pensions are funded.
Executive John Stoffa stated that it would be easier to accept a commuter tax if it were for "decent roads" or for police and fire protection, but not because Easton's pension is underfunded.
How Easton will respond to this resolution is unclear. Calling it a "complex" matter, Easton Mayor Sal Panto still managed to lay out his dilemma in two sentences. "I took office in 2008 with a pension payment of $600,000. Today it is $1.5 million and next year it goes to $3.7 million."
71 comments:
I thought that the county already vacated much of the Wolf Building in anticipation of selling to a developer.
It is a dilemma and cold hard piece of reality!
norco council can't control themselves now they want to control easton with silly threats. what a joke. can't wait until we get a real exec - callahan
The City does NOT answer to the County. Why would this egotistical Board think the City should show up at their meeting? In fact using the County Council's logic why would the City not then go to ALL employers and plead their case?
The city of Easton is a level 2 distressed city, which means they can impose a commuter tax To help with the pension.. Sal, good job carrying Werner in the city during the election.
Cusick, must think noone knows that the county is unloading the wolf building already. And for Lamont's comment, nevermind, he's a clown.
Isn't voter registration moving into the PennDot photo ID center in Palmer?
"Executive John Stoffa stated that it would be easier to accept a commuter tax if it were for "decent roads" or for police and fire protection, but not because Easton's pension is underfunded."
So, taxation without representation is OK if you approve of the purpose?
That, my friends, is why government, whether in the hands of Rs or Ds, must be as small and as limited in power as possible.
-Clem
Stoffa's remark is an affront to every Easton resident. For decades the county enjoyed free police and fire services and never threw a penny to the city. That's right, Stoffa. Move the prison and county to Bushkill Township. When you have a prison break, the local animal control officer can put out some traps.
Clem, amen. Stoffa is a decent man, but a dunce.
Callahan as executive that is a joke. I hope he is able to transport his mirrors from City Hall to the Court House. The guy is a joke.
He had "no balls" when it came to the EIT/NIZ issue. He wrote a cream puff op-ed piece. The leaders in the valley stuck their necks out and didn't back down.
He'd have the county so messed up in 6 months even Bernie couldn't figure out where everything was hidden.
How does the Mayor's fake Ga King Guy weigh in on this issue?
EMPEROR OF PRUSSIA
Dear McClure. We have been wondering where you have been for several years.
Since the city of Easton, thanks to our wonderful legislators in Harrisburg, is getting millions in Casino monies from table games that should rightfully be the county's money maybe the county should see if they can get that back, lol. Why not? In the supposed blessed excuse of Regionalization, the county watched Easton get handed almost a half million a year in casino money even though they have no impact from the casino..It was a pathetic deal..Now Easton pays the county back and sticks it right up their butt..So now it's time for the county, while they are passing useless resolutions, to ask the state legislators to rework that formula, no???? I sure as hell hope so!!!!
I think you are all underestimating Sal Panto. He is no idiot. He's gonna spin this and become King. So McClure and Cusick - make it a bigger issue......Please.
Parading around with an imposter "King" from Ghana definitely makes Sal Panto look like an absolute and thorough idiot, it shall be noted for the record.
How's that Al Bundy Junior High School Hall of Fame working out --- bringing them in by the dozens yet or what?
Taxation without representation? Not quite. All local taxing authority in PA exists at the consent of the General Assembly. If you don't like a tax, go to your state representatives and state senators. I get charged a higher sales tax in Philly but I don't live there. I get charged a booze tax in Allegheny County but I don't live there. I pay a sales tax in New Jersey and I don't live there. Going by the logic of taxation without representation, I shouldn't have to pay a hotel tax when I visit another state.
You have representation. Tell your state representative you don't like the tax and that you want it repealed. Given that the state reps in our region didn't even approach leadership about teh NIZ or introduce their own legislation on the matter (heck, they didn't even call Pat Browne), don't expect much response.
Name another politco locally who has a bigger pair. You can't. Sal never ducks an issue. Does the right thing with the public unions and refuses to be bullied around. You'll never find him sweeping an issue under the rug. He tackles issues head on regardless of the impact on his political career. Hence the reason why he was reelected by such a large margin. Again, you can try to bash him and make him look bad all you want. I say - Respect! And John Quartey is a former Easton kid who is promoting free elections in his country. Whether he is a king or not is a matter of symantics. In Ghana, his role is similar to a king which is why there is confusion. It's symantics.
sorry. semantics.
As a recent Northampton County Retiree, I too was concerned about my retirement pension for the County, so I inquired as to how the County is funding their plan. I hope these numbers are right but they are as I recollect them as given to me. The County pension fund is underfunded just like Easton. Yes it's true. The County will put in close to 12 million dollars to fund a shortage and play catch up to a 70 million dollar shortage. I hope these numbers are right. Anyway, that's what I was told. I always thought the County was in good shape. Can you find out if these numbers are right?
9:38, The County pension is funded at 70%. I will ask for the details.
Sal Panto and Mike Fleck are by no means "buddies." This post concerns the commuter tax, not the exec race. Please stay on topic.
I looked at the website for the PERC Penn Employee Retirement Commission which certifies distressed levels. It showed on its last report that Easton was funded 87%, Beth 84% and Atown 68%. Easton cannot charge this type of tax unless its ratio is under 70%. Maybe it will be. I cannot find any evidence of it on any state website or with the Auditor General. Something major must have happened that is not known. The state reports are usually one to two years behind. Still, they need to certify to be able to charge this tax.
They claim to be down to 64%.
I don't dispute their claim. I just think that they have to have some state agency certify that unfunded level before they can charge the tax. The state is very slow on these matters as evidenced by reports that are two years behind.
The funding gap is projected. The cities contribution will rise to over 3 million from 600,000 just a few years ago. There is a problem that goes much further than the Mayor's office.
One comment said it is easier to accept the tax if it was for infrastructure.Yes there is value added. But, this is just asking for more people to pay for excessive pension cost resulting from the arbitration extortion process.
OK if they adopt pensions like the private sector. Go to defined contribution plans.
Anon 7:56 am... Couty workers lay 1% already for fire and police. So they do pay towards the services they use. Also county sheriffs are in charge of the courthouse and the property. They police those areas and anyone detained at the courthouse do not ever impact the city of Easton. Get the facts straight.
The cities are expensive places to live and work with all the taxes.
No wonder most prefer to live and work outside them.
I don't steer people, whether they want to buy a home or commercial property, away from the cities because I'm a racist. My clients are looking for the best financial deal and where they have maximum buying power.
And you're not getting it in the cities, especially as a homeowner.
And you never will. There are less and less homeowners in the cities propping up not only a growing segment of renters but also decades of retired employees and their pensions, not to mention the school district's own problems.
And those groups of people are far larger in number than yours.
Living in the city, you're guaranteed a tax increase every year, no question. It's inevitable.
So why do it?
Anon 11:00 AM I think you are confusing my post. An escapee from the prison is the city's problem, because such a person is a threat to the city's population. You raise an interesting point. If there is trouble in the prison, what role does the EPD play when all the deputies have gone home for the day?
If Easton cant implement a commuter tax, then they should cut city staff. Start with the spouses of politicians.. Oops,.sorry Bob W.
"'Where is Easton? Where is the Mayor?' asked Lamont McClure" You're sitting in it genius!
I guess all that cash Tim Holden promised Sal isn't coming now,huh? lmfao
What the hell does Tim Holden have to do with this. You're an idiot for even suggesting that. Moron.
Holden promised Sal mucho federal moolah if he backed him. He also promised the same to the County Dems and D.A. All made fast endorsements to uphold the favor. Yes, what a "moron" I must be! At least you didn't spell it "moran".
An escapee in Bushkill Township will be shot before questioning by one of the many well regulated, legal firearms owners. You see, in Bushkill, unlike Easton, it's the law abiding who are armed.
Let Sal get back to raising taxes on county workers, looking ridiculous with phony kings wearing eye shadow, and looking sheepishly idiotic as he answered Channel 69 questions about the day's killing.
You are an idiot and have no idea what you are talking about. Everyone knew Holden was getting the ax. It was no secret. You have to be a political moron to not understand that Scranton will hold that seat so long as they have a candidate to put up. Just look at the numbers.
And I'm told that this fake king you are referring to is actually a king and apologizies were accepted from the ambass for misunderstanding who was coming to american from ghana. So enough with the fake king shit.
callahan will save your backward asses from yourselves
Okay people.....let's realize one thing......Taxes for the city and the County will always go up. Maybe not every year, however they will go up. The townships have an advantage in that they have a lot of land to develop.....The cities are land locked with fix costs. The townships learned well from the mistakes of the cities. All the Boroughs that are landlocked like Nazareth will also seee tax increases on a regular basis. You can only cut so many times and only so deep. Taxes and death. The two sure things.
As I indicated earlier, this post is about the proposed commuter tax, not a county exec race that no one has entered. Anonymous comments that attack Callahan or Panto, like the one posted above, will be deleted.
Sorry, but I don't see the courage in raising taxes.
We know the problem lies with public employee pensions, yet Panto and every other politician just wants to keep the unions happy.
How about using the Mayor's office as a platform to call for change from Harrisburg? How about laying off some city employees to show there's a cost associated with these Cadillac pensions?
Nope, it's easier just to stick it to the taxpayers - especially those living outside of the city that can't vote you out of office.
I participate in a defined contribution (401k) plan sponsored by my employer. I contribute a certain % of my salary to the plan, and my employer makes a separate contribution, NOT a $ for $ match. I know the basic difference between a defined contribution and a defined benefit / pension plan like they have in Easton. Does anyone know the amt. that the municipal employee contributes vs. the city?
Pension, pensions, pension! If every governmental institution's pension are underfunded a system should be derived that only a certain percentage of the total pension fund be used in a given tax year to pay the pensions of retired workers. If its half of what they were expecting because the stock market didn't perform well then so be it. To constantly raise taxes to fund some POLs super high pension is too much for tax payers to handle. Everywhere you read it seems every other week another article is written about how pensions are spiraling out of control.
The pensions and health plans need to be renegotiated - even for the already retired. It's a do-over. Kind of like the Wisconsin recall. But this one would succeed if tried. Most people have had enough of public unions and their stranglehold on our future. Let's have referenda.
This is what I mean when I say that public sector unions have enslaved us. I really think there is no reason for them to exist in the public sector. All agreements with them, in my view, should be declared void as against public policy.
Before imposing a commuter tax, Panto needs to sit down and try to get a break from the public sector unions whose pensions have caused the problem. He says he has dealt with the unions. But I would argue that, if the pension problem is still there, he has not.
Also, this demonstrates to me why hacks like Fleck have no place in government. He is a union consultant for the trade unions. He obviously does not want to offend the public sector unions. He would rather stick the rest of us with a commuter tax than talk turkey with the unions.
The problem is none of the democrats (anywhere) want to offend the unions. That's who's funding their campaigns and providing campaign workers on election day. Too many republicans are happy just to stay under the radar.
Your comment is what all of us need to embrace regardless of party. Our politicians need a push here, and it needs to come from us. Otherwise we'll all go bankrupt.
I really enjoy reading your BLOG and learning new things about our governments. However, when it comes to pensions and the County Pensions in particular, it appears some of your readers are really misinformed. Here are some cold hard facts. For decades County employees (not union represented) were asked to forgo competitive wages so the Commissioners wouldn't have to raise taxes. They were paid a lot less than most corporate emploees. Then the same thing with the new government. The County would dip into the County Pension funds and use what they called "excess interest" to pay down employees costs and therefore avoid tax increases. At one time, the County employee was paying 9 % into their own pension fund. The state recently lowered that to 5 % of their annual salary, and when the pension fund performs well the County will again offset their budget expenses by raiding the pension fund and the retirees of their money. So.....when the pension fund doesn't perform well the County is "by Law" mandated to make the pension fund financially sound. There-in comes the huge payments to the retirement accounts. Use our money, but when there is a downsturn in the market be ready to pay the piper.
1:45 -
The point is let's make it fair - do away with the defined benefit plans - even if it's only for new hires. Replace it with defined contribution plans.
That way everyone (county/muni admin, employees, and most of all taxpayers) know what county employees cost and everything's paid as we go. But the taxpayer no longer has any market risk (or benefit in good years).
The reality is that the unions will fight it because they know that despite their narrative (which you've repeated) they've made out like bandits with the current pension plans.
Agree. Union hacks have no place in governemnt. Also Chamber of Commerce hacks and businessmen hacks should be barred from serving. All public pensions should be declared null and void even if you paid in to it for forty years. Even if that was when you made 15K a year and the guys at Steel and Mack made 70K a year. All other private pensions anhd 401Ks's should be declared null and void so as to get us back to a year 1900 status in the US.
At that point we can statr over with a "fair" and equal way of doing business. It seems a bit socialist, this crying, "its not fair" but if that is what the people want, I say let it be done.
The Realist
Realist -
I don't think we need to go back to 1900. We just need to realize that the public pension system is broken.
Corporations realized defined benefit plans don' t work decades ago, after they bankrupted too many companies.
The days of continuing to offer an overly generous pension to compensate for a slightly lower pay rate in the public sector are gone. The reality is that public sector pay is now above the private sector. Trying to maintain such a system for public employees is crushing the middle class.
What they found was that, for the projected samples that the 401k would lose over $155k for its entire lifetime. Since the entire sample fund at the time of retirement would be $320k, that means a full third of the money which was put into the system was taken by the 401k itself in the guise of fees.
How does this work you may ask? The report goes into detail, but we shall give a simplified example here.
First, your 401k funds are typically put into mutual funds, so let us first address those.
If you put $10,000 into a mutual fund which lists a 3% return, it sounds good, yes? But that is after the fees are deducted. These fees are listed as a percentage of your total investment, but they are deducted from the revenue generated. You get $300 added to the $10,000, but that was after the $150 in “expense ratio,” mutual fund fees such as marketing fees, management fees, and administration feeds, as well as $150 in direct transaction fees have been removed. Your $10,000 had earned $600, but half of that was eaten up in fees. And it does this each and every year. $300 every year for 40 years gives you $12,000 in total fees deducted, more than your original investment.
That original $10,000 over the 40 years of the fund ended up at just over $22,000. Without those fees, it would have been just over $102,000. That is a huge shortfall. Even if you invest an additional $10,000 every year, you are not catching up to this shortfall, as the $1.7 million the fund should have is reduced to $640k, a loss of over a million dollars. And that is if there has been no economic slowdown during the intervening 40 years, which an reduce the principal even further while not reducing the fees associated with that. In a downturn, the fees make the losses even more pronounced than they were before as a result.
Now, I used a high fee rate, typically double the average large mutual fund but not the highest fee currently in the market (which as of the time of writing is 1.53%, held by the HDGE Active Bear ETF Profile Fund according to my research), to best demonstrate the amount lost to these fees.
By comparison, a pension plan is a form of insurance, similar to what you would find for your automobile or your healthcare. Money taken in is used to pay out for those who have met the qualifications for payment. Many of these systems use surplus funds to invest in stable, fixed investments, such as treasury bonds. Social Security works in this manner, surplus funds paid in go into a special trust fund filled with US Treasury Notes, pre-paid cash in effect. The trade-off for this is that the amounts paid out are not directly owned by the individual, they are a large pool that all tap into.
A US Treasury Note, similar to one used by the Social Security Trust
By doing this, the overhead fees are minimal, typically under 1%, and as the amount is not accruing nor are large numbers of transactions being handled, this is not reapplied to the same funds repeatedly as with a mutual fund. As a result, a funded pension plan is far more likely to weather economic hardships without difficulty.
When planning ones retirement, risk is the last word you want to hear.
9:09 -
Let's be perfectly clear, the EMPLOYEE should have complete control over where they invest their money under a defined contribution plan.
If they want to invest in gold, treasuries, or swampland in Florida, they should have that choice - and the risk associated with it. The cost to the taxpayer should end with the yearly contribution.
I am all for higher taxes. I wish the state would make it easier for muncipalities to raise rates.
10:55 -
You're right, since the government knows how to spend our money better than we do.
Again, if the state counties and local governments including the federal level, did not rob the huge balances in the pension funds to fix their deficits the pensions would easily be over 100% funded and we the taxpayer would not be required to pay anything... Why don't you people get this? Why are you so thick. When it comes to the reasons why employee pension funds are underfunded?
I guess the majority of people never pay attention to what is really going on.
In the age of "Limbaugh and Fox News", people have been conditioned to always find a villan to blame for all their problems. Someone or thing that is never themselves. The facts are governments did raid pension funds, the facts are 401K's were never designed to replace pensions. But those are the facts that need research and cool logic. Anger is eaiser and finding a "Judas Goat" to kill is the best.
Now a days we are told the reason you feel miserable is the damn "public unions". No real resaons just the "dman public unions". I remember 25 years ago when people like O'Hare used the same screams to decry the damn "private unions", if only they went away everything would be great.
WEll private unions are dying and with it we have the greatest concentration of wealth in a few hands in the country's history and the unraveling of the middle class with the least amount of personal wealth since the great dpresssion.
Congratulations, as the masters would say, "dance my pretties, dance", yourselves right into the poor house. You are even willing to open the door and lock it behind yourself for the masters.
The Realist
Anonymous 1:42,
Contrary to what you believe municipalities in PA cannot take money from the pension funds. I doubt states or the federal government can either but it's a fact municipalities cannot.
1:42 -
It's you who isn't getting it. Why should the taxpayers have any market risk for your pension?
If things would have been as rosy as you say, then why object to a 401(k) type plan where a certain amount gets contributed and YOU control where your money is invested? If things are as you say you would be very well off.
The reason you won't is because you know the defined benefit plans are a gravy train that has to be funded with an endless supply of tax dollars. The taxpayers can't pay for it, and it's sucking the middle class dry.
What's the big deal...Pay up you'll find the money....Cut back on a luxury or extra vacation.
Thank you anon 2:03 for the "Reality" check.
9:35
Your just jealous that you got saddled with a 401K instead of a pension like you rethought you would have when you grew up. Good luck making that 401K last through your retirement age. You fell for it and now you will, oops I mean we will end up paying for YOU
There is too much mis-information to answer each one but understand that this is a statewide issue and no one WANTS to raise taxes. The issue with the public unions that most individuals here fail to see is that cities must negotiate within the framework of Act111 adopted by --- you guessed it, the state. Join us in getting this 50 year old bill amended to include just a few things like "ability to pay." Chambers of Commerce have joined our effort in pension and Act 111 reform. I support our city employees and I support their need for retirement planning, just not at 75% of compensation while paying into a plan that is based on a lot less. Where does the 75% come from ------ state Third CLass City Law and Arbitration awards by a neutral that doesn't take into account the "ability to pay."
There is so much more, especially about the County Council's injecting their nose in city affairs but I will address them at a County Council meeting when I can attend and the way it looks it will be after our vote.
Hey Sal, how do you feel about "ability to pay", if applied to your sweet teachers pension?
The teacher pensions plus their bloated lifetime benefits are the real killers.
Ed
"Ed,"
Please sign your real name, especially when you want to get personal.
"especially about the County Council's injecting their nose in city affairs"
That's a bat attitude, Dal. You are proposing a tax that will have a direct and immediate impact on many hard-working and modestly paid employees. Some of them receive food assistance.
County Council and the Exec have a duty to look out for them. If not them, who else? You have not reached out to the County, and it is possible they could have done something to help. They might even consider a grant to the City, to keep the money from coming out of their workers' pockets.
Nobody is questioning your own obligation to run your City. But when you take action that will tax those who do not even live there, and you dismiss the concerns of a unanimous County Council, we really do have taxation without representation.
Bernie,
I don't mean this as a personal attack. Everyone says how personable the mayor is. How he responds in all mediums. But you wrote your response at 7:47 PM. Yet there is no reply. There is no reply on the other thread about this tax Easton is proposing. I would have a better feeling if someone from the City wrote something. Even if they said f' off or we got it wrong. But crickets? No response is a crappy response to the voters.
I would not take him to task for not responding to a comment in a blog, or for the delay in responding he has a City to run. I can assure you he will speak out, if not here, at some other venue. It's his nature. I appreciate and respect that quality. He never shies from an asrgument.
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