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Taxes to skyrocket in NE Pa.

Struggling cities inflicted with fiscal 'syndrome'


- In Scranton, Mayor Chris Doherty and the city council want to hike property taxes about 25 percent next year with the potential for larger tax hikes in the future.

In Wilkes-Barre, Mayor Tom Leighton planned a 31 percent real-estate tax hike for 2013, then scaled that back to 26 percent once he realized some savings.

In Hazleton, Mayor Joseph Yannuzzi started out proposing a 60 percent property-tax hike and upped that to 75 percent. Now, he's at 83 percent and city department heads still say it's not enough to do everything that they need done.

Northeastern Pennsylvania's three largest cities are planning to boost taxes by huge levels next year to balance their budgets. Their financial struggles symbolize the economic downturn of the last five years but are also more deeply rooted in decades of recurring events: arbitration-mandated labor-related costs rising faster than tax revenues, large numbers of untaxed buildings owned by nonprofits and stagnating tax bases.

Scranton's and Hazleton's budget woes were so bad, their mayors relied on one-time revenue sources to plug budget holes, but such remedies only delay deficits and possible tax hikes. Long-term solutions remain elusive.

"If I'm a doctor, and I have people presenting with all these similar symptoms all over the place, do I blame the patient?" asked Gerald Cross, executive director of the Pennsylvania Economy League Central Division, the agency that acts as financially distressed Scranton's recovery coordinator and authored a five-year management plan for Hazleton.

"Or do I say . . . there's a syndrome, it's a disease, it's not an isolated patient getting himself in some kind of self-inflicted illness."

In 2008, the PEL Central Division authored a report titled "Structuring Healthy Communities: Municipal Case Studies." The report focused on five third-class cities outside the northeast - Bethlehem, Easton, Lancaster, Reading and York.

"The public and municipal leaders greatly value the commitment of their career public employees but the municipal coffers can no longer afford the increasing related health-care and pension costs, as well as the normal expected increases in wages," the report says. It found that "state laws, mandatory [contract] arbitration awards and court decisions have far-reaching effects on the economic health of Pennsylvania municipalities."