First in Pa.: state says distressed city of Nanticoke no longer needs oversight

Nanticoke is the first city and 10th municipality in Pennsylvania to complete the Commonwealth’s Act 47 program for distressed municipalities.

The city’s consultants made the case in June that Nanticoke’s financially stable enough to operate without their help.

But under state law, that’s not official until the Pennsylvania Department of Community and Economic Development agrees. Secretary Dennis Davin officially signed off on during a City Hall ceremony Monday.

“This isn’t a distinction bestowed by the Governor,… it was earned,” said state Sen. John Yudichak. The Luzerne County Democrat’s constituency also includes the borough of West Hazleton, which got its distressed status rescinded last year.

Nine municipalities in all had achieved recovery since the inception of the Act 47 program, but no cities. 

Part of the reason it’s so tough for cities is they tend to be older than their suburban counterparts and relied on industries that have since declined. Population follows suit, along with tax base, infrastructure, housing stock.

After decades of this, Nanticoke sought help from the state in 2006. 

The city’s government was so short on cash that the public works building didn’t have running water. And its aging population and dwindling economy were exacerbated by the 44-year lag in property value updates, a responsibility that rests with Luzerne County.

Nine years after entering distressed status, the water’s back on. The city also has a balanced budget, most debts paid off and a full complement of financial management staff in place. And the county did a reassessment in 2009, which helped increase property tax revenue.

But residents are paying higher taxes without much improvement in services (for a median-income household assessed at the city’s median property value, the new expenses add up to $563 per year, which works out to 2.5 percent of earnings). And that’s expected to continue. Another critical component in Nanticoke’s recovery was others agreeing to go home rule – a form of government allows local officials to tax more than state law otherwise allows.

Nanticoke will need that to maintain its newfound stability, City Manager Andy Gregaris acknowledges.

Consultants from the Pennsylvania Economy League’s Central Region office will guide the city through the next two budget cycles, Gregaris says.

Check out the Keystone Crossroads feature on Nanticoke for more, including what other cities can learn.

This post was updated to correct the number of municipalities that have had their distressed designation rescinded by the state.

Nanticoke will be the first city and 11th municipality in Pennsylvania to complete the Commonwealth’s Act 47 program for distressed municipalities.The city’s consultants made the case in June that Nanticoke’s financially stable enough to operate without their help. LINK http://whyy.org/index.php/keystone-crossroads/item/83360-nanticoke-poised-to-become-first-distressed-city-to-stabilize-under-pennsylvanias-act-47-program But under state law, that’s not official until the Pennsylvania Department of Community and Economic Development agrees. DCED announced Friday LINK Secretary Dennis Davin would officially sign off on Nanticoke’s exit during a City Hall ceremony this afternoon. Nanticoke’s been in Act 47 since 2006. After decades of post-industrial decline, the city government was so short on cash that the public works building didn’t have running water. An aging population and dwindling economy were exacerbated by the 41-year lag in property value updates, a responsibility that rests with Luzerne County. Nine years later, the water’s back on. The city also has a balanced budget, most debts paid off and a full complement of financial management staff in place. And the county did a reassessment in 2009, which helped increase property tax revenue.But residents are paying higher taxes without much improvement in services. For a median-income household assessed at the city’s median property value, the new expenses add up to $563 per year, which works out to 2.5 percent of earnings.That’s expected to continue. Another critical component in Nanticoke’s recovery was others agreeing to go home rule – a form of government allows local officials to tax more than state law otherwise allows. Nanticoke will need that to maintain its newfound stability, City Councilwoman Lesley Butczynski previously acknowledged. Butczynski also she knows the added expenses have been as “overwhelming” for many residents as for her, personally. “A lot of times there’s nothing you really can about it,” she said.Still, other cities might learn something from Nanticoke. Check out the Keystone Crossroads feature. LINK