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Voters may decide if raising Lehigh County taxes gets harder to do

By Randy Kraft, WFMZ.com Reporter, RKraft@wfmz.com
Published On: Mar 27 2014 07:30:00 AM CDT
Lehigh County Commissioner Michael Schware

Michael Schware

ALLENTOWN, Pa. -

Next November, Lehigh County voters may decide if they want to give the county commissioners more power to stop future county taxes from increasing.

Commissioner Michael Schware is crafting an ordinance that could result in a voter referendum changing the way the county's annual budgets are approved.

Making such a change requires amending the county's home rule charter, which requires a public referendum.

"My goals are simple," said Schware.

He wants to eliminate the possibility of a large tax hike going into effect without the approval of the county commissioners.

He wants to maintain an adequate reserve in the county's stabilization fund.

And he wants to increase the commissioners' accountability to the taxpayers

Schware said the proposed changes will be "fairer to the taxpayers" and make county commissioners "more accountable to the people that we serve."

He said Lehigh County has 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."

At issue is the "default budget procedure."

What currently happens, Schware explained, is that if commissioners can't agree to amend a new county budget they don't like, the budget proposed by the county executive automatically goes into effect.

He said that results in county residents having their taxes increased, even though the commissioners did not support that increase.

Schware proposes that if a new county budget with a tax increase is presented to the commissioners by the county executive, and commissioners can't come to agreement on it, "automatic, across-the-board spending cuts would occur" that would reduce the size of that new budget and not raise taxes.

He also proposes that if a new county budget is proposed that decreases taxes, that budget also would have to be approved by the commissioners. If they did not agree to decrease taxes, the current tax rate would remain unchanged and surplus cash those taxes generate would go into the county's reserve fund.

"I know some people have mischaracterized this, but my purpose isn't to tilt the field in favor of any one branch of government or toward any one political party," said Schware.

"The field's already tilted and it's against the taxpayers. My goal is to bring some balance back to the default budget process where no one side is at a disadvantage -especially not the taxpayers of Lehigh County."

Schware's proposal was discussed during the commissioners' administrative committee meeting, held just before their regular board meeting Wednesday night.

He said his proposal is just "a way to start the discussion," not being presented as "the only way we can get to the end goal. I'm interested to hear ideas and ways to make it better.

"I hope we can all work together and come to an agreement that improves default budget procedure. I hope we can all agree it's a goal worth pursuing."

Schware said others already have suggested ways to make his proposal better or offered alternatives to achieve the same goal.

After getting feedback from his fellow commissioners Wednesday night, he said his proposal might be too complex and needs to be simplified a bit. But he wants to keep the discussion going

After the meeting, Schware said he hopes whatever ordinance evolves from the discussions will result in a charter amendment for county voters to decide next November.

He said by their second meeting in June, commissioners tentatively would have their first reading on a proposed ordinance to allow that November voter referendum. He added there will be time to get it on the November budget.

He said if a proposed charter change amendment addressing default budgets does go on the November budget, it will have no impact on the 2015 budget that commissioners will consider in the coming months.

County administrator weighs in

Daniel McCarthy, the county's new director of administrator, told commissioners he was not at the meeting to represent the position of the administration on the issue because until commissioners determine "what the ordinance is going to be or not going to be, it would be premature to do that."

But McCarthy offered some historical perspective, saying: "While there have been two tax increases in the last 10 or 12 years, there also have been three tax cuts in the last 10 years or so. That sometimes is lost."

(There also was one tax rebate, noted a couple of commissioners after the meeting.) McCarthy said his main concern is that the commissioners' "fingerprints should be the last fingerprints on a budget."

He suggested commissioners consider asking voters to change the county charter so commissioners always keep a proposed budget in their possession; and that they should be the ones to make the determination about tax increases and spending cuts.

Said McCarthy: "When you abdicate responsibility, saying 'I'm not going to do it, I'm going to send it back to the executive,' that opportunity slips from your fingers.

"The executive will make those cuts, as the executive sees fit, but every cut he makes he may be saying 'I'm only doing this because the bard of commissioner requires it to be done.' To some extent, you'll get the blame but not the credit."

McCarthy said it's encouraging that commissioners are looking at the home rule charter, because no document is perfect. "You'll do what you think is right and we'll look forward to the process."

County Executive Thomas Muller was not at the meeting,

Other commissioners weigh in

Commissioner Percy Dougherty said he agrees with Schware that something has to be done.

"When we had the 69.5 percent tax increase, nobody on the board wanted that, but nobody could come up with a way to get around it," said Dougherty.

"So the county executive's gigantic increase went into effect. Eventually the county executive had to pay for it, with the loss of the election. But that's not helping the taxpayers."

Dougherty said his only concern is the possibility "of freezing the budget, basically forever. I'd like to see us try to figure out a way to avoid that."

Commissioner Scott Ott agreed Schware's proposal could result in county spending being frozen for years.

"While that sounds like a desirable outcome to a conservative Republican, I don't think it's a legitimate way of dealing with year-to-year budgets," said Ott.

Ott said now a super majority of commissioners - six of the nine - are required to stop a county tax increase.

"It would be preferable to require a super majority to implement a tax increase," he said "The taxpayers want it to be as difficult as reasonably possible for us to raise their taxes."

Ott also said a county tax increase now can go into effect "and nobody's fingerprints are on it. Nobody's responsible. Every commissioner who runs for office can claim 'I never voted for a tax increase.' And yet, somehow, there was a double-digit tax increase.
The taxpayers of Lehigh County have a right to know 'did you vote for it or against it?'"

"I do think we ought to make it harder to raise taxes," said Ott. "And we should always take responsibility for our votes."

Commissioner Vic Mazziotti agreed, saying one question will determine his support for recommending budget default changes to the county charter: "Will each of us be accountable for our vote?" He said commissioners should either vote for a tax increase or for significant cuts to eliminate a tax increase.

Commissioner Geoff Brace indicated Schware's proposal would eliminate another level of accountability, because commissioners no longer would have to do anything to amend a proposed county budget to reduce spending.

"We can say 'we didn't cut funding for the district attorneys' office or the courts or the prison or Cedarbrook'," said Brace. "It leads to spending cuts that we don't have to vote for."

Brace recommended a budgetary process without any defaults, one where a majority of commissioners have to vote for both the tax rate and the expenditures. "Anything else creates a situation where we can wash our hands and say it was somebody else's fault."

Ott expressed concern that automatic across-the-board cuts in a proposed county budget would meddle with the county executive's responsibility.

"I don't like telling the executive what to do when it comes to his spending priorities within the budget," said Ott. "One of the problems is the board is continually second-guessing and meddling with the executive's budget. The executive's job is to set those spending priorities."

Ott said if a county executive wants to spend more money than the commissioners want spent, the executive may ask: "What would you cut?"

"Then immediately we get into doing his job. When the executive brings us the budget, the purpose isn't for us to second-guess every line item. Our job is to set policy."

Ott said the county executive is responsible for determining the spending priorities and commissioners are responsible for determining the tax rate.

Losing veto power

In response to a question by Commissioner David Jones, Schware acknowledged his proposal would nullify the county executive's ability to veto a budget adopted by the commissioners. That veto power is given to the county executive in the current home rule charter.

Said Jones: "This conceivably takes out the balance of power between the executive branch and the legislative branch."

Jones expressed concern about the county executive losing the veto, saying losing that "weapon" puts the executive at a disadvantage.

Said Schware: "I see it more as a leveling of the playing field, rather than giving advantage to one person or another."

Said Jones: "What we're proposing takes away veto power from somebody that has been elected by the taxpayers. That's a main concern for me."

Resident Joe Hilliard weighed in, saying he is a fiscal conservative who supports Schware's proposal.

"This has to be heavy-handed," declared Hilliard. "Between County Executive [Jane] Ervin and County Executive [Don] Cunningham, our property tax rates have doubled by executive order. I can't even see how that's legal."

Saying those tax hikes were not approved by county commissioners, Hilliard asked: "Are we under the burden of two illegally enacted taxes? I guarantee you if this happens again there will be some legal challenges. You, the legislature, have to affirmatively say 'we need to raise taxes'."

Commissioners said a 70 percent county tax increase was enacted in 2002 and a 16 percent increase was enacted in 2010.