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Meeting in State College, Pennsylvania Mayors Address Funding Woes

on September 17, 2010 8:15 AM

Pennsylvania's urban municipalities face nothing short of a financial crisis, mayors from across the state said Thursday.

Their tax revenue is stagnant at best. Non-taxed properties, used by nonprofit groups and educational and governmental entities, consume large portions of their land area.

Meanwhile, the mayors explained, expenses are growing dramatically -- but state laws tightly restrict how their towns, boroughs and cities can generate new income.

And so on Thursday, a 29-member municipal task force gathered in the State College Borough Municipal Building, weighing how they might best approach and lobby a new governor and a new state Legislature next year.

"There isn't a community in this room that doesn't face the same set of problems," State College borough Manager Tom Fountaine said.

The task force, comprising mostly mayors from Pennsylvania cities and boroughs, is an arm of the state League of Cities and Municipalities. State College Mayor Elizabeth Goreham is a member of the task force; Borough Council member Don Hahn sits on the league's board.

"We have to have people at the state recognize that we're in trouble," Reading Mayor Thomas McMahon said in an interview with reporters. "We're not crying wolf. We're in trouble."

Already, 19 Pennsylvania municipalities have entered the local-government equivalent of bankruptcy. More than 50 others have joined an intervention program to avoid such dire straits, according to the league.

The task force -- formally dubbed the Core Communities in Crisis Task Force -- is scheduled to meet again next month in Reading, to continue discussions and begin formalizing recommendations for the new state leaders.

Here's a look at some of the preliminary suggestions that the task-force members discussed Thursday:

  • Diversification of revenue sources. Municipal leaders said they need the state to grant them more options for generating local income, now largely limited to property-tax and income-tax revenue. Some useful options might include an increase in the local-services fee that a municipality may seek from workers employed within its borders, they said. That fee has been $52 -- unchanged -- for about six years.  Municipal officials cited several other fee-and-tax ideas, including local sales-tax, payroll-tax and drink-tax options.
  • Renewed incentives for the "regionalization" of local public services and the consolidation of some municipalities. The state can make it easier for communities to share services -- such as libraries and garbage collection -- in some cases, thereby making it easier for municipalities to streamline expenses, municipal leaders said.
  • Reformation of state Act 111. The act governs collective bargaining for police and firefighters. But it doesn't take into account a municipality's ability to pay, municipal leaders said. Many would like to see the state change that.
  • A service fee for nonprofit organizations, which don't pay property taxes. In State College, for instance, 46 percent of the land mass is exempt from property taxes. (That 46 percent includes the land that's counted as the University Park campus.) Urban municipalities tend to have a higher concentration of non-taxed land than their suburban counterparts do, as nonprofit groups and other public-, government- and socially oriented functions often cluster in urban areas. That's a boon to community life, but it take a toll on the tax base, leaders have said.


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Penn State Trustees to Hear Annual Address, Appropriation Report
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