Lehigh County commissioners debate tax increase process
Lehigh County commissioners are debating whether they want to stop future county tax increases from happening without their approval.
Commissioners Michael Schware and Lisa Scheller are proposing an ordinance that might end such automatic tax increases, by asking county voters to change the home rule charter next November.
They want to prevent tax increases in a county executive’s proposed annual county budget from going into affect without the approval of commissioners, which is what can happen now.
If the commissioners fail to agree on a new county budget, it automatically goes into effect – along with any tax increase that may be required to meet that budget, explained Schware.
If Schware and Scheller succeed, and commissioners fail to adopt a future budget that includes a tax increase, that increase would not happen. Instead, the tax rate for the next year automatically will remain the same as it is in the current year.
In other words, they propose replacing one budget default mechanism with another.
The proposed change also would eliminate the county executive’s line item veto power. And, if there’s not enough money to cover expenditures in a new budget without raising taxes, across-the-board cuts would be made.
“What we’re doing is giving the people a chance to determine whether they want to keep the system as it is or whether they want to see it changed so it’s fair to them,” said Schware.
While several commissioners seem in agreement that they should be determining whether or not budgets with tax hikes are approved, some disagree with the proposed solution.
“Any default procedure as it relates to budgeting is irresponsible,” said Commissioner Geoff Brace, one of two Democrats on the board. “This is not an amendment I’m interested in supporting.”
Commissioner David Jones, the other Democrat, said if the home rule charter would be amended, the commissioners would be reducing the county executive to a county employee, rather than a “co-equal” elected official.
“This is throwing the baby out with the bathwater,” said Jones. “There is a way to do it without altering the function of the executive branch.”
Scheller wants a vote on the ordinance at the commissioners’ July. 9 meeting, saying “it has to be passed at our next meeting” to get it on the November ballot for a voter referendum.
Deputy County Solicitor Catharine Roseberry warned a government study commission might be required before such a referendum can go on the ballot to change the home rule charter.
“We haven’t done the full analysis,” said Roseberry, but she added that can be done.
The solicitor told the commissioners they can vote on the proposed ordinance and then the county election board will evaluate whether it is suitable to be placed on the November ballot.
If the county executive proposes a new budget with a tax increase, but cannot get five of the nine commissioners to vote for that budget, the proposed home rule charter change would stop that tax increase from automatically taking effect – as it can under the current charter.
Schware previously has said Lehigh County had two major tax hikes since 2002 - "both in the double digits and both without a majority of the board of commissioners voting affirmatively for them. I don't think that's right and the taxpayers deserve better."
On Wednesday night, he said those commissioners failed the taxpayers.
He wants that changed so if commissioners can’t agree on a budget, the previous budget remains in effect and taxes don’t increase. He doesn’t want county taxpayers to get stuck with another tax hike commissioners did not approve.
Schware said acting on the annual county budget is the most important thing commissioners do during the year, yet that budget now can go into effect with a tax hike “without a single commissioner voting in favor of it.”
“If you have nine people up here who don’t agree with that budget, I find it an incredible oddity that that’s what goes into effect,” he said. “It needs to be corrected.”
“It changes the default procedure in the budget,” explained Schware. “Taking the burden off the taxpayers when we can’t agree that a tax hike is the way to go certainly is better than what we have now.”
“It turns around the process from a default tax increase to a default spending cut,” said Commissioner Vic Mazziotti.
Jones, who argued passionately against the proposed ordinance, said the referendum change still allows the commissioners an escape, because they would not have to vote on a proposed budget. “They could do nothing.”
Commissioner Brad Osborne offered a similar opinion, saying his concern is the proposed default would give license to the county commissioners “to not do the job we were elected to do.”
He said it would be telling the county executive: “You need to find those cuts that we don’t want to find. I have a problem with that.”
Osborne said understanding a budget and levying taxes are among the most important functions of a county commissioner, “yet this legislation gives us an out.”
Mazziotti said the current system provides that same opportunity for commissioners to do nothing “and for a tax increase to go into effect.”
He said it also allows commissioners to say: “I had nothing to do with that tax increase. That was the county executive’s tax increase.”
Mazziotti acknowledged either budget default mechanism permits commissioners “to get off the hook, which I’m not crazy about. But nobody’s come up with an alternative.”
The proposed ordinance is similar but more simplified version of a initial proposal made by Schware in March.
“I don’t know that what we have before us is the perfect solution,” acknowledged Schware. “I don’t know if there is a perfect solution. But I do think it’s much better than what we have now.”
Brace called for elimination of default procedures and said the commissioners should be required to produce a budget “that is agreed to” by majority vote.
Osborne said he’s not a fan of requiring across-the-board cuts in a budget, because they could impact county departments that have not proposed any increase in expenses.
The proposed ordinance also requires the county to maintain adequate spending reserves, explained Scheller. She said those reserves ensure the county has money available for emergencies.
The county would be required to maintain cash reserves totaling at least one-sixth of annual expenditures in the operating budget.
Disempower the executive?
“There has to be an ability for the county executive to have a voice in fiscal policy,” said Jones. “The budget is policy. This eliminates that.”
Because it would take away the ability of the county executive to veto such a default budget, he said, “then you’re changing more than a budget process. We’re changing the nature of the executive’s role. We’re treating him as an employee, not an elected official.”
“I’m not advocating for the executive,” said Jones. “I’m advocating for the nature of how the charter in our form of government is constructed. If we take the veto away from the executive – under any circumstance -- we’re changing the nature of the role.”
Jones repeatedly said: “I don’t understand what we’re really trying to achieve. What are we really trying to accomplish?”
Jones told Schware: “The reality of what you’re saying is you want to be able to definitively control the outcomes so that they are not what you don’t like.”
Said Scheller: “I don’t believe that we’re trying to control the process or the outcome at all through this bill.
“This becomes a referendum. We’re asking the taxpayers is this what they want?”
If commissioners don’t believe a tax increase is right for the county, said Scheller, taxpayers should not inadvertently be saddled with an increase.
Jones argued that referendum would be asking people to “disempower their elected county executive. We’re now treating him like a municipal administrator – an employee of the board. That’s not a co-equal branch.”
Mazziotti countered: “We’re not co-equal currently. That’s our concern. A tax increase can go into effect without anybody voting for it.”
No budget gets passed without being voted on by the commissioners, argued Jones. “If we can’t collectively come to some kind of consensus, then it’s not the process, it’s the people engaged in the process.”
He argued the solution is to change the process of amending proposed county budgets, so individual amendments can stand on their own merit, rather than all being lumped together.
Mazziotti said he would support that change, but indicated that’s a different issue.
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