It’s taken more than a decade, but another of Pennsylvania’s distressed communities might finally be on firm ground.
Luzerne County’s West Hazleton will be the eighth municipality to fix its finances through Pennsylvania’s Act 47 program for distressed communities if the state Department of Economic and Community Development approves the borough’s exit plan unveiled Tuesday night.
The local government’s chaotic response to financial challenges already was a firmly ingrained habit when state intervention began 11 years ago, according to longtime Councilman James Kulaga.
“They didn’t want to say, ‘We don’t have the money, don’t do it.’ So they just went and borrowed, and borrowed money, borrowed money, borrowed money,” Kulaga said.
The resulting $2 million-and-growing debt is now being paid off.
And the budget that was running an $850,000 – or 60 percent – deficit now has a surplus.
Those numbers might seem small, but similar results remain elusive for 20 other distressed municipalities – even those engaged longer in the Act 47 process.
Officials there say such recoveries are likely to be limited unless state laws change.
Kulaga and his fellow councilmen said municipalities need more options for raising revenue.
Crushing local public debts often are rooted in those limited choices, according to their Act 47 coordinator Joe Boyle.
“A lot of these places really get to the point where they say,’ What can I do?'” said Boyle, senior research associate at the Pennsylvania Economy League.
Boyle also notes the decades-long wait between property revaluations, which are handled by county governments in Pennsylvania.
The lag can artificially depress property values and severely restrict real estate tax revenue for local government.
West Hazleton’s property tax revenue last year was more than $730,000 – almost double the $380,000 amount in 2009 when Luzerne County did a property revaluation for the first time in nearly half a century.