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Nazareth, Pa., United States

Friday, November 20, 2015

NorCo Council Refuses To Repeal $50 Million Loan

(Blogger's Note: This is similar to yesterday's story, which inaccurately claimed that the repeal could not be voted on until December. I felt I should rerun the story, but try to do so more accurately). 

At their November 5 meeting, Northampton County Council voted 6 to 3 to approve an emergency ordinance authorizing Executive John Brown to borrow up to $50 million so that the County can continue paying human service providers out of its own pocket during the state budget impasse. Fiscal Affairs Director Jim Hunter has since secured a line of credit with Lafayette Bank to borrow only what the County needs, starting sometime in December.

But is the state budget logjam finally breaking up? The Governor's spokesperson, Jeff Sheridan, claims there's a "tentative agreement," and is hopeful that the record-setting stalemate will be over by Thanksgiving. But there is no way of knowing just how long it will take for state reimbursement of human service providers.

Given this uncertainty, Council at its November 19 meeting quickly rejected a Lamont McClure repeal of the $50 million loan authorization. Only Ken Kraft joined him in attempting to kill the loan. .

Executive John Brown stated that, even if the state Budget is adopted by Thanksgiving, it's unclear when state reimbursements will begin trickling back to the County.

"We'll only take exactly what we need," pledged Brown, who indicated the first draw of about $2 million would take place in the first week of December.

Lamont McClure was bothered about borrowing $50 million when the County already has a $10 million rainy day fund. This would require Council action. McClure told Brown, "I think [Council] would give you authorization to use the rainy day fund when it's raining."

But there's another problem. The County can't get at it without incurring penalties. Brown conceded that perhaps that should change.

Northampton County's southern neighbor, Bucks County, is spending about $6 million per month of its own reserves for important programs like child protective services. But instead of borrowing, Bucks Commissioners have threatened to withhold between $4-5 million in taxes and fees it collects monthly for the state, and has already established an escrow fund for that purpose. Bucks stopped paying human service providers in July.

A breakdown of how counties are responding to the budget crisis is located here.

1 comment:

Anonymous said...

Nor. county council is made up of not to swift people. They have no idea what to do. The so-called "veterans" of council are more clueless than the newbies. I feel for the county. They have a mediocre council.