Mayor Proposes 8.5% Tax Hike, Single Trash Hauler

Bethlehem Mayor John Callahan is proposing a real estate tax increase of 8.5 percent and a radical change in the city’s garbage collection system in his 2013 budget plan, which he officially unveiled during a news conference in City Hall Friday.

Heading into his final year in office, the mayor plans to take on a difficult political fight and hire a single hauler to cart city garbage – eliminating Bethlehem’s longstanding system of requiring property owners to hire their own hauler from a list of city-approved garbage collection companies.

Callahan argued that a single hauler system would save the average city household $110 a year while providing the city with a new source of revenue that is not property tax.

The proposal is likely to draw fire from the 20 or so contractors -- many of them small mom-and-pop operations -- that make their living in the city and a number of residents who believe they are saving money or getting better service by hiring their own hauler.

“People hold that near and dear,” said Council President Eric Evans, who predicted that City Council is likely to spend significant time discussing that issue – and several others – during budget hearings, which he hopes will begin on Nov. 19.

Callahan said that the results of the most recent Bethlehem Citizen Satisfaction Survey showed that 58 percent of city residents would actually be supportive of a single-hauler system. The mayor said he plans to discuss the survey in greater detail next week.

The proposed property tax increase will mean $60 more a year for the average city homeowner in a house with an assessed value of $50,000, city officials said.

Roughly 60 percent of the increase will be a new tax dedicated exclusively to the operation of the city’s 911 emergency dispatch center. The rest is a general fund increase.

Emergency dispatching is also likely to occupy a lot of City Council time before the year ends.

In recent years, the 911 Center has been a drag on the city’s general fund. Dedicated state taxes on telephones and cell phones have failed to provide sufficient funding and dispatching is a county function throughout most of Pennsylvania, with Bethlehem and Allentown being the only exceptions.

However, Callahan and the Bethlehem Police Department have made compelling arguments for keeping the dispatching city-based. Dispatchers have become proficient at using city street cameras to help police catch suspects within minutes of a crime being reported.

Part of Friday’s budget presentation was video and audio of police and dispatchers working together to nab a suspect within a minute of an armed robbery at the Pantry 1 in South Bethlehem.

At the same time, the city is looking at making more than $1.1 million in capital improvements to the dispatching center this year to keep it viable.

Other details from the mayor’s budget proposal:

• Callahan is also calling for the implementation of a 5 percent amusement tax, which he is also calling a “first responders fee,” on all ticketed events in the city, including those at SteelStacks, the Sands Bethlehem Event Center and Musikfest. He estimates that will raise $600,000 in new revenue, which will be dedicated to the police and fire departments.
• The city has begun approaching some of its largest tax-exempt organizations – including Lehigh University, Moravian College and Lehigh Valley Hospital – Muhlenberg – to provide a voluntary contribution in lieu of taxes. Callahan said 19 percent of the city’s land is occupied by tax-exempt organizations, citing Lehigh’s 650 acres as one example. He is hoping to raise $1 million through this effort.
• Five more city jobs will be eliminated from this year’s budget – all through attrition. In all, the city has eliminated 69 jobs over the past three years, a 10 percent reduction in Bethlehem’s workforce.
• Callahan plans to sell five parking lots currently owned by the city but operated by the Bethlehem Parking Authority to the authority for $1.2 million.
• The biggest cost driver that is forcing the city to look at increasing its revenue is a $3.9 million increase in the payment it must make to the Pennsylvania Employment Retirees Fund. In 2012, the payment due was $7.2 million. In 2013, it will be $11.1 million.