Lehigh County Budget notebook

Election time craziness.
First, as always during election time folks try to color conversations with hyper partisan lenses. Problem is over the last year most county discussions really were not partisan in nature. At least between the 9 County commissioners. 7 of which are Republicans who are not always on the same end of the ideological spectrum and 2 Democrats. I know this because I attend meetings. Not religiously. But enough to get a flavor. Ones I don’t attend I frequently watch online.

With this years budget? There was only 1 dissenter with an 8-1 vote.

Cumulative impacts.
Last years tax cut was derisively called a “happy meal”. This year a “pizza”. No matter what silly labeling each year the fact remains – after Don Cunningham’s (D) 16% tax increase of 2011 Lehigh County has since given either a rebate or tax cut 3 of the last 4 years. Just like small tax increases add up over time, so do small tax decreases.

Lehigh County tax cuts and rebates since 2011 increase.
2011 – Don Cunningham’s (D) 16% tax increase.
Since then over last 4 years…
2013 – Tax Cut of 3.0M. Rebate of 3.5M or a 44 dollar reduction
2014 – 0
2015 – Tax cut of 1.25M or 8 dollars for average homeowner
2016 – Tax cut of 2M or 14.21 for average homeowner

So yes, another “small” tax cut. But when you find “small” tax cuts year after year it adds up. And that’s just the County in a silo. Last year every Lower Macungie homeowner got a 19 dollar homestead break. For those at or under the median home value you will get your second in 2 years in 2016.

For some? It’s now a couple happy meals. For others? Maybe 2 tanks of gas. But for some the impacts are more serious. For ex. $40 helps feeds two seniors on fixed income for a weeks time. $40 helps a single mom feed a newborn for 2 weeks. It all adds up.

All told today? Just over 6 million in cuts over 5 years with zero measurable decreases in services. Sounds like a job well done to me.

“Rainy day/reserve fund”.
Commissioners have been criticized for “dipping into the rainy day fund to balance the budget”. Ok let’s examine that.

First, unlike Lower Macungie Township the County doesn’t have a fund balance policy. (Maybe they should consider one?) The next best measure is the Government Finance Officers Association (GFOA). They recommend 20%. This budget maintains that. 106M budget with a 20%+ reserve fund. Including and prior to this year Lehigh County has either met or exceeded recommended reserves. Prudent financial management.

Other Counties already borrowing money because of state budget impasse.
Lehigh County is not. They may very well eventually have to depending on how long Harrisburg gridlock lasts. But to date it’s not been considered. Others counties have had to. This again demonstrates the excellent fiscal shape Lehigh is in.

Takeaway.
I think the makeup of the current board of Commissioners is excellent. A very high functioning board under the leadership of Brad Osborne. The passed budget reduced taxes for the 3rd time in 4 years. The reserve fund is still at or above 20%. The counties bottom line finances are healthy.

In a climate where for better or worse “throw the bums out” is a rally cry.. In Lehigh County? I think stability is a good thing. Is there friction between the Executive and Commissioners at times? Yes. But isn’t that the way American democracy is supposed to work? As for the 9 Commissioners? I think the makeup of the board is excellent as it stands.

 

The “but for” test & farmland preservation.

Part of my opposition to the Hamilton Crossings TIF was a belief the township could attract desired development along the Hamilton Corridor without taxpayer subsides.

The majority of Lehigh County Commissioners took a same tact. In hind-site they were correct. Because of that decision County taxpayers will benefit from 100% of the new incremental revenue.

This general criteria is called applying the ‘but for’ test. Meaning, but for a subsidy will a community get desired economic development. In the case of Hamilton Crossings, the answer was yes. Therefore the subsidy un-necessary.

What about applying the ‘but for’ test to farmland preservation?:

With farmland preservation we are dealing with another form of infrastructure. Industrial infrastructure. A type that supports a $17 million dollar economic activity for the Lehigh Valley annually. At that figure we are just scratching the surface. Soil in Western Lehigh Valley is special. Regionally significant in fact. It is a natural resource. Lehigh’s farmland preservation program places the highest emphasis on soil quality.

Farmland is irreplaceable. Once gone, it’s gone. Cannot re-create it. We cannot re-build or manufacture it.

“But for” someway increasing the counties funding allocation there is no mathematical way we can hit the Lehigh Valley Planning Commissions established target of preserving 25% of our available land. This is an indisputable fact. ‘But for’ the funding increase we will lose the land. We will lose this economic driver.

Percy Dougherty and Tom Creighton’s municipal match program is a smart way to increase funding. It’s something I support 100%.

In a climate where we need figure out ways to stretch county dollars further and further this program does just that. This year in particular the increase can be further justified since this would be a re-allocation of Green Futures fund money to in large part what it was intended for. It should not be used elsewhere. Honor voters wishes and apply it to permanent preservation of an invaluable Lehigh County natural resource.

"But for" compensating landowners market value for farmland development rights, we will not hit the LVPCs goal of 25% preservation.

“But for” compensating landowners market value for farmland development rights, we will not hit the LVPCs goal of 25% preservation.

 

 

Mazzioti and Eichenwald push anti pay to play legislation.

I attended a rare but refreshing bi-partisan press conference today by Allentown City Council-woman Jeannette Eichenwald (D) and Lehigh County Commissioner Vic Mazzioti (R). Eichenwald has long been one of the only independent voices in Allentown city government.

Councilwoman Jeanette Eichenwald and County Commissioner Vic Mazziotti outline pay to play abuse prevention proposals in front of the Lehigh County Government Center.

Councilwoman Jeanette Eichenwald and County Commissioner Vic Mazziotti outline pay to play abuse prevention proposals in front of the Lehigh County Government Center.

After learning about the event, I wanted to learn more about the proposals. Because state laws are weak in this area (and campaign finance in general) local governments have to step up.

I’m now curious what a similar proposal would look like in Lower Mac. We currently have an internal policy regarding “entertainment and gifts” but to my knowledge don’t have a formal anti pay to play policy similar to ones made by Mazziotti/Eichenwald.

To be clear, I don’t think we have an immediate issue in Lower Mac. Or in the County.  But the point is this is good proactive policy to prevent issues. Especially in light of recent high profile allegations. And in the case of Reading admissions. Lower Macungie in the past had little chance of pay to play abuse because frankly, up until recently not many candidates spent much money on township races. BUT, as we continue to grow that is changing. Candidates are now raising and spending money. Inevitably people and special interests will likely start throwing more and more money at township races in an effort to curry favor.

In my primary when I ran opponents raised and spent thousands of dollars. With that kind of fundraising could come the potential for abuse. And I prefer a proactive preventative approach to being put in a situation like Allentown is in now having to react allegations.

As Mazziotti pointed out today, recently down in Reading an elected official was bribed to overturn the cities pay to play law. That’s how you know the laws aren’t just deterrents but serve to stop moral lapses. If they didn’t work no one would be bribing people to stop them.”

Pay to play in politics

Reading Council President admits role in Pay to Play scandal

DC lobbyist: Pennsylvania ‘really needs a pay to play law’

Young Republican County Commissioners Debate – Farmland Preservation Topic

A question was posed to Republican County Commissioner candidates about funding Farmland Preservation initiatives at a recent Young Republicans debate. Attending were all 5 (R) candidates for Lehigh County Commissioner. When it comes time for the general election RenewLV will pose the same question to all candidates again including Democrats.

Backgrounder: The County in the past has allocated funds to the farmland preservation fund ranging from 2M annually from 2006-2010 to a low of 0 in 2011. In 2015 the county allocated 250,000. When the County allocates money it receives $2.50 cents in commonwealth funding for every dollar.

My thoughts: Downzoning farmland is an unfair taking of property value therefore compensating landowners market value for development rights is the only fair and free market way to preserve farmland forever. Second, it’s a fact that preservation reduces local and state municipal obligations to provide services and infrastructure related to sprawl. For every dollar we spend to preserve farmland that is zoned suburban it saves us .15 to .50 cents on each one of those dollars down the road. This figure is even higher if we leverage our dollars with state and county.

For me, this is one of the most important issues as a voter. Preserving farmland is a key component in Lower Macungie’s strategy to keep taxes sustainably low over the long term. Learn more: Want to keep taxes low? Preserve farmland.

The question was posed “Would you support restoring funding of the County Farmland preservation program to previous levels” here are the answers paraphrased:

Marty Nothstein:  “I’m a conservationist” “I own preserved farmland” “Development is important but so is preserving our countryside””We need to look at more ways to preserve farms””We need to do a better job of finding strategic ways to preserve including partnering with townships” “We need to do a better job of finding money…” “When you have farmers that want to see their land protected forever, I think that’s important to residents of Lehigh County”

My thoughts: Marty was most aggressively positive in his answer. It’s very clear he is very much in favor of preserving farmland and even has done so himself. Based on this answer and conversations I’ve had with him it’s clear he would be a champion of funding the program as a Commissioner.

Amanda Holt: “Our natural resources our important and it’s something that’s talked about in the Pennsylvania Constitution.” “Important issue but I’m concerned the average age of farmers is now 57 here in Lehigh County. Looking at the cost I wonder if this is going to be an effective means of really preserving the farmland looking at the average age of farmers. This is something we really need to take look at. We do need to consider moving forward how we can adhere to what the state constitution says and what works best for our situation here in Lehigh County.”

My thoughts: Very good answer. Very impressed Amanda Holt referred to the state constitution. She is absolutely correct to do so. The state constitution in Article 1 section 27 says: “The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all.”

Amanda also was the only one to refer this last years funding. She correctly stated that the County funded 250,000. This led to a state match of 750,000.

Brad Osborne:  “I do know that farmland preservation has been promoted as a good program. The Green Futures Fund generated $20 million.  It ended.  Can we revive it?  Farmland absorbs only .33 cents of every tax dollar generated whereas residential requires over a dollar” “Specific requests need to be in line with the bigger picture.  A larger plan is needed.” “Property tax reform could change the entire question.”  We need to evaluate this further.

My thoughts: As usual Brad was prepared to give a very thoughtful answer. I was impressed he was ready with the statistics demonstrating the long term tax value of preserving farmland. As I write often on this blog, farmland is the best way to keep our taxes sustainably low over the long term. I would have loved a more aggressively positive answer, but I respect that Brad doesn’t put his opinion out there before he completely understands an issue.

Vic Mazzioti: “There are 3 ways we’ve funded preservation in the past. First, through tax dollars. Another was the sale of assets and we received grants from the state.”  “I’m for continuing the program. But if we do it with general tax dollars that requires further discussion.” “Meantime I think we should continue funding the program through the other two sources I mentioned. 1. Any assets that we sell. 2. Grants that we receive that permit us to use those funds for farmland preservation.”

My thoughts: Vic, gave another well thought out answer.

Dean Browning: “The program from early 2000 generated $30 million and we did not need to borrow.  We funded it out of revenue.  I was Chairman of the Sterling Raeburn Farmland Preservation Committee.  I see the benefit of the program, however I am reluctant to continue it absent any specific vote by the taxpayers saying they want the program re-instituted and number 2 identifying a specific funding source for it”

My thoughts:  I was disappointed by this answer. This could have been a way to really differentiate himself to voters in Lower Mac who by and large support open space preservation and understand how an investment today will keep taxes sustainably lower over the long term.

 

 

 

 

County Commissioners demonstrate good government

I wanted to share a note of compliment I sent to County Commissioners this morning after attending a meeting last night. It is not often I (in fact I never have) given a wholesale compliment like this to a board applauding the way they conduct business. The entire 9 person board and Chair Brad Osborne deserve praise. 

Commissioners,

I wanted to take a moment to give you all a Compliment. I decided to come to last night’s meeting at about 6pm. Hind-site was a good decision. I was interested in the LCA appointments in general but didn’t have strong opinions on the subject. Note: I agree with the decision to retain some members, but replace the chair. I have mixed feelings about LCA’s role in the water lease but have always been and remain concerned about overflows along the L. Lehigh which I live next to. New blood in the case of the LCA board is warranted.

Regarding the LCA topic. First, it was tedious. That being said, it was also great government. It was (painfully) clear Commissioners weren’t prepared to vote until they all understood a complicated maneuver. This demonstrated to me as an observer in the gallery that this issue was not “worked out” beforehand and that last night you conducted the business of County in public. Not behind closed doors as is far too often the case. Discussion was slow, deliberate and purposeful. Didn’t make for great theater, but it makes for great government.

I actually left the meeting with a little bit of a headache, but as we know sometimes good government does that. Our representative republic has a tradition of separation of powers, checks and balances and conducting meetings in the public eye. Local boards mirror that American tradition. Far too often bodies I am very familiar with simply do not operate in this fashion. Issues aren’t explained in detail, officials don’t explain their positions, deals are worked out beforehand instead of hashed out in the public, chairs keep one eye on the clock as if meetings have an expiration time. Public input is only lip service. None of this appeared to be the case last night. 
It was very clear that County Commissioners conducted the business of the County in the sunshine. Good Government does not operate at light speed. And yes, sometimes it can be tedious. I appreciate that. All 9 members of the board impressed me last night.  Thank you.
Ron Beitler
5540 Lower Macungie Rd. 
Macungie, PA

Lehigh County gets proactive by moving new hires to new tier in 2015

A couple weeks ago I wrote a quick primer post on the role of the County Controller.

I wanted to do a followup. Even though the controllers primary role (when it’s done correctly imo) is that of a non-partisan fiscal watchdog, occasionally the Controller has a hand in policy decisions. As I mentioned in my previous post in Lehigh County oftentimes this occurs in matters relating to county employee retirement policy. This because the Controller serves as voting member and secretary of the retirement board.

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Recently the board made a decision to change the 1/60th tier retirement plan for current employees.  The tiers are described in Act 96 relating to the County Pension Law of 1971.

Early last year County Retirement Board chose to change the tier for new employees starting next year for those hired after December 31st 2015. The Retirement Board voted unanimously to adopt a second retirement tier of 1/70. The board includes current Controller Glenn Eckhart.

What this change does is reduce the county portion of the a retiree benefit by 14% which in turn will save millions of dollars for county tax payers moving forward. Note: The change will only effect new employees hired after December 31st 2014 and current employees by law will continue to have the benefits of the 1/60 plan.

The difference between 1/60 and 1/70 is basically at 1/60 a person one would have to work 30 years to get half of their final three year average salary a year. 1/70 means they would have to work 35 years. 

Two reasons for the change:

First it takes into account that since the lifetime medical benefit was stopped in 1988 Lehigh County employees now work longer for the County. This is mainly because of medical benefits. Additionally based on the latest mortality table change county employees are living much longer (common problem in many retirement systems) This of course means they work longer. So basically a county employee will end up with somewhere near the current level of benefits but at a significantly reduced cost to the County moving forward.

Again and very important this does not affect current employees. Tiering benefits is an important reform that institutions can enact to make sure we play fair with current employees but to address fundamental fiscal issues moving forward. In the end this change is important since it reduce the County obligations while still  continuing to provide a very fair benefit to our invaluable County retirees who are our backbone. This represented great leadership from Controller Eckhart.

LVEDC calls for 1 cent Lehigh Valley Sales Tax.

Lots of reaction on social media this morning to this Mcall story posted last night. Here are some initial thoughts and questions.

You can read the report in it’s entirety here. The LVEDC paid around 100k to the Georgia firm  “Garner Economics” for the report.

LVEDC Website

First what made the headlines is the report high priority recommendation for a 1 cent sales tax which would generate 33 million a year. LVEDC’s current budget is 2 million. Knee jerk reaction is that this proposed tax increase would create a bloated slush fund for a nebulous board with unelected leadership lacking checks and balances. There were some recent reorganizations of leadership and structure of LVEDC in 2013 and I’d like to learn more about them. But from what I understand decisions in the past were made in private with a public component that was understood to be nothing more then a rubber stamp.

Beyond the big picture issue I took some time reading about what exactly the report outlines be done with 33 million. Some of it is good.

For example, regionalization studies. PA has 2500 individual municipalities and 600 school districts. No other state comes remotely close. This is a big reason why we face some of the statewide problems we do. Here is what the report says:

The Lehigh Valley alone is comprised of two counties and 62 municipalities. The scale of perceived—and, as noted by the taxpayer (businesses interviewed), real—inefficiencies in providing community services is significant. Oftentimes, to a non-resident, there is no separation of lines when traveling from one municipality to another.

No, I am not in favor of forcing individual muni’s to give up local control. As a bottom up government proponent I believe local gov’t to be the most efficient taxing body. Locally a resident can account for every dollar brought in and every dollar spent. A local dollar goes much further then sending your dollar to Harrisburg or Washington to be re-distributed through a broken system. That being said I agree we should conduct studies to identify where compelling cases for consolidation are. Then, if muni’s willingly see the economic and fiscal benefits (in some cases would be a no-brainer) we should make it easy to re-organize.

It’s my understanding Alburtis at one time initiated a study of this subject on it’s own. Remember, Alburtis raised taxes again this year. Macungie raised taxes again this year. Small borough’s often find themselves in tight fiscal jams and their leaders often worry about financial future. This has nothing to do with leadership but everything to do with small size, small population and redundancy of services. Take police protection. In EPSD there are 5 individual police entities operating in one geographic area each with it’s own facilities, union and overhead. I believe in voluntary regionalization and resource sharing initiated from the bottom up.

Another issue cited is the LVIA: I truly have mixed feelings about subsidizing the airport. It is a compelling argument why. The report states:

“Focus group participants and electronic survey respondents noted the need for
additional air service and more affordable rates out of the Lehigh Valley International Airport (ABE).”

Can’t argue with that. But the answer is how do we get there? How do we get a fully operational LVIA? Is the answer more subsidies distributed by another level of bureaucracy? I honestly don’t know.

Lastly here is one example of something that scares me. It deals with infrastructure subsidies. Here is one line:

“Sustainable funding source to allow for mega site development, municipal water
and sewer in more areas of the counties, broadband connectivity in the rural areas, deal closing opportunities, and more.”

This is rural sewer line expansion. That means one thing to me. Sprawl subsidies. More sprawl Industrial complexes paving over cornfields in the outskirts of the valley. More mega strip centers and suburban office complexes. These practices represent the very lowest economic ROI on valuable land. Sprawl subsidies skew the land market. Without subsidies companies will build close to the people who need the jobs and where the infrastructure already exists. Not where the land is justifiably cheap cause it’s in the middle of nowhere.

It boils down to more subsidies for a wildly inefficient development pattern. Sprawl subsidies will encourage local muni’s looking for a quick windfall to build new infrastructure with no accounting on if they can actually afford to maintain it over the long run. After the subisidies dry up and greenfield developers move on to the next field local taxpayers are the ones left holding the bag. We pay for the ongoing improvements and maintenance for projects that were big ole feathers in the caps of local politicians. In many cases unfortunately new liabilities created far exceed the new revenue generated. It then becomes a simple issue of math. Sprawl is financially unsustainable over the long run.

This is definitely something to keep an eye on. I’ll say this sales tax probably has absolutely zero chance of being approved either by Lehigh or Northampton County councils. Def not with their current legislative boards. I do need to learn more about the LVEDC and this study. I’m interested in hearing from folks who have alot more knowledge on this subjec then me. Arguments for and also against. Please feel free to contact me at ronbeitler@gmail.com.

County BOC directs administration to remove County as agent for Unions

Last night, the Lehigh County Board of Commissioners directed the Administration, in all future negotiations between the County Of Lehigh and employee bargaining units (including meet and discuss units), to remove the County as dues collection agent for any third-party membership organizations. The motion was sponsored by Commissioner Mike Schware and was approved by a vote of 6-2. The vote was along party lines.