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Mayor Proposes 8.5% Tax Hike, Single Trash Hauler

Bethlehem Mayor John Callahan proposes 2013 budget that would preserve the city's 911 Center and radically alter the way garbage is collected.

 

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.
Staberdearth November 10, 2012 at 12:03 PM
Well, aren't you all in the Lehigh County part of Betlum glad that you, at the very least, challenged your reassessment and may have won? Now, just hand it all back to the city. Did you break even? Public sector union pensions will kill us and you know that they sure are far more lucrative than your measly pension in the private sector... All with no profit motive and built on your hard work and taxes. Don't you love them?
David Ruhf November 10, 2012 at 03:19 PM
Really, Staberdeath spoken like a non-union employee. You blame pensions, we pay people wearing football helmets buco bucks while those wearing military or firefighting helmets peanuts. Police officers protect you and your family 24/7 and get paid peanuts as compared to private sector employees with the same educational back ground and these individuals put their lives on the line every day. Many politicians blame public sector pensions for their financial woes, but if Allentown and Bethlehem governments would have paid their fair share 40 years ago to present municipal pensions would be paid in full. Most municipalities were to pay 1% OF ALL TAXES LEVIED, this was never done. Instead city administrations choose to unfund municipal pensions this was the status quo until the state said enough is enough and passed Act 205 (read it i'm not going to educate you). Now municipalities must try to make these pensions solvent by funding them, oh and the state helps them financially too. One more thing police and fire personnel don't receive social security, so when you look at municipal pensions deduct $1100.00/month that they don't get and the private sector does. STOP BLAMING PUBLIC SECTOR PENSIONS,
Jim Reighty November 10, 2012 at 03:24 PM
About time the city went to single hauler. I had municipal service in other places and it was cheaper and was better service. They took old furniture without paying extra, and took yard waste. Bethlehem had this ass backwards system for too long. Also like idea of the colleges paying their fair share. Lehigh charges 50000 a year per student and can't give something to city....come on. Not happy about tax increase, but until Harrisburg does something about pension reform, I am afraid city is in a hard place.
Jim Reighty November 10, 2012 at 03:31 PM
Bethlehem pensions are nearly 80% funded according to article on Wfmz. I think the problem lies in how pensions are calculated and the percentage they pay. I was told that many pensions are based on more than just final salary, but include longevity bonuses and other things. Also, for many years pensions paid 70% of pay. Think the state law needs to be changed. No more defined benefit, but defined contribution.
Sharon Hippensteal November 10, 2012 at 04:21 PM
So, Bethlehem wants to have only 1 trash hauler for the entire city. Who will it be? Not one of the small companies in business at this time. What will happen to them? They might have to go out of business which would leave the owners and their employees with no source of income, while the big company that wins the bid will just make more money. Will this company have jobs for all the misplaced workers? And just how much would each homeowner have to pay for this? Most likely more than the $81.00 for 3 months service that I get with my trash hauler. That is with unlimited number of trash bags allowed. Also, the property tax plan is so outdated. All who work and live in the city should pay toward city hall, streets, police and school costs. Switching to a payroll based tax - or a local sales tax for the above mentioned costs would be fairer than the plan in place now
Dana Grubb November 10, 2012 at 06:04 PM
Note, they want to go to a single hauler for residential customers only. It would be fairer to raise the property tax on ALL property owners instead of picking on homeowners to make up for the Callahan fiscal mismanagement plan. In 2008-2009-2010 he ran a cumulative deficit of $14.2 million, which initially was patially driven by Callahan's use of a number of one-time revenues (stakeholder fee-$5 million/Sands tapping fee-$1 million/UDAG repayment $800,000/Sands construction permit fees-$1 million plus). I happen to agree with the sale of the city owned parking lots to the parking authority, but how do you make up that $1.2 million in 2014? The amusement tax makes some sense given all of the visitors to Bethlehem who attend concert events, but 5% seems high. I think Easton charges 2.5% based on tickets I've purchased at the State Theatre.
Dana Grubb November 10, 2012 at 06:21 PM
Politicians want to blame financial duress on public employee pensions, but who negotiated those pensions? Those same elected officials. When money and taxes seemed more plentiful Mayors like Callahan gave the farm away to public employee unions. Early retirement incentives have been used by Mayors to induce early retirements, but they have a cost as well. Give an employee an extra two years toward pensions, but the employees haven't contributed their percentage as they would if they worked those two years. And, yes Bethlehem's pension funds are better funded than many municipalities, but they're still underfunded. Who made the decision to do that? Politicians! Employees work under the conditions that exist under or are modified by politicians. They employees don't make any of those decisions, the politicians do, but then when budgets are difficult they try to asses the blame to the workers and their pension plans which is completely wrong and unfair. In all fairness to Callahan, he isn't to blame by himself. Prior Mayors conducted city business in a similar vein granting pension increases while requiring workers to work fewer years, and underfunding pensions. Factor in the downtown of the economy and losses in pension investments and the problem exacerbates itself. A fair alternative to the defined benefit pension for public employees needs to be created, one with minimal risk and a reasonable return.
Dana Grubb November 10, 2012 at 06:33 PM
Staber, you're correct that public pensions have become better than their private sector counterparts, but a lot of that happened over decades beginning in the 1960s. A big reason for that is that public employees were at one time paid much less than employees in the private sector so elected officials over time tried to compensate for that through benefit packages (including pensions). The problem has become that the inequality has in a number of ways, pensions included, shifted in the opposite direction. Public employees can retire at age 55 and draw their full pensions. As was done with social security, and given longer lifespans, that age should be increased as well. For example, maybe at age 55 you draw only 50% of your pension; at age 57.5 you draw 75%; and at age 60 you get 100%. I don't know what the magic actuarial numbers are, but this would reduce the cost up front in conjunction with keeping experienced employees in the workforce. But, please remember, it was elected officials who granted these pensions, not the workers. All they could do was ask.
Jim Reighty November 11, 2012 at 01:31 AM
If single hauler is cheaper then current system, then it is not unfair to residential customers. My brother lives in Palmer and they pay about $300 yr for trash, recycling, yard waste and bulky garbage. I pay over $400 a year for just trash and recycling. I pay 30/month for trash and $15 per quarter for recycling. If I want my trash man to take bulky items it is another charge. 10 bucks for an old lazy boy. I can't imagine someone not wanting to save money.
nate November 11, 2012 at 08:51 PM
Jim Reighty that's expensive you most likely have a bigger company such as republic services.
Dana Grubb November 11, 2012 at 09:25 PM
Jim, I do believe that it is unfair for residential customers only to subsidize a $500,000 revenue source meant to subsidize the city's general fund budget. Marking an actual single hauler contract up for a single hauler just to make money is wrong. That is why I believe it should be assessed to all property owners. That amount, $500,000 is roughly the equivalent to one-third of a mill real estate tax. It would make more sense to have all property owners pay that than just residents.
JJ November 12, 2012 at 12:26 AM
Before you go comparing athletes to public workers understand the big difference, The NFL is private business, not gov't funded. The private sector can pay what they chose b/c it doesn't affect every single person in a muncipality or state. The NFL may pay high salaires, but clearly the revenue they bring in is even much more and they continue to make a profit thus affording to pay those salaries. These Pensions will be the death of all things, how in the world you can expect to pay people the rest of their days, you start adding all the people that go through the system and get added to the list to collect these pensions, and guess what at somepoint you are paying so much money to all these people that you can't continue to fund your normal opperational expenses, thus causing every citzen to have to pay higher taxes and the list goes on and on. I'm tired of the Gravy Train that everyone wants to ride, be financial responsible and fund your own life after work, that's what I'm doing, I realize that "I" need to pay for myself down the road, not someone else.
Staberdearth November 20, 2012 at 12:42 PM
I am enjoying the debate here. I have had direct exposure to unions, having come from an ALL UNION FAMILY and having had my fill of the worst of unions in the early days of THE FAR LEFT TRUMPKA AND THE UMWA. UNIONS HAVE CHANGED AND HOLD THE REST OF US HOSTAGE BY NEGOTIATED PENSIONS DONE BY THE CLUELESS INCOMPETENT POLITICIANS WHO HAVE NO REAL STAKE IN THE MATTER AS THE BLOWBACK WOULD ONLY OCCUR LONG AFTER THEY ARE LONG OUT OF OFFICE. HOWEVER, THE CAVING ASSUAGEMENT TO THE UNIONS IN TERMS OF HERE AND NOW GOODWILL WAS OF COURSE IMMEDIATE. A GOOD CLASSIC EXAMPLE IS THE WONDERFULLY INCOMPETENT TAXI CAB DRIVER, ALLENTOWN'S FINEST, ROY AFFLERBACH, WHICH IN GERMAN MUST DIRECTLY TRANSLATE TO "DUMB PHUCK". NOT MERELY DUMMKOPF...
Staberdearth November 20, 2012 at 12:43 PM
RUHF, IGNORING THE BIG HAIRY MAMMAL IN THE ROOM. TOO FUNNY!
Staberdearth November 20, 2012 at 12:47 PM
BTW, Dan Grubb, I recall you from Media St. Aren't you a Moody Blues fan as well?
Dana Grubb November 20, 2012 at 12:52 PM
Yes, I'm the same guy you remember from Media Street and am a huge Moody Blues fan.
Frightwingslayer November 29, 2012 at 04:07 PM
Snagglepuss, How do you manage to turn this story into an attack on unions..I'm glad , however, that you used the word negotiate..If unions enjoy these pensions , it 's because the municipal leaders or leader gave them this in negotiations..Thank you. Also, the Republican backed Wall streeters also decimated municipal pensions, among others, when they almost bankrupted our economy..Lastly, many school districts and other municipalities, thinking their plans were hunky dorey, decided not to contribute to the plans as they should have been doing..So stop all the anti union crap. Because , it's just that..Crap..It has nothing to do with this issues..This shouldnt have been tied to the budget in the first place..

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