Friday, November 28, 2014

When No New Taxes is a bad thing

How much longer will Chester politicians propose No New Taxes? Of course, no one wants to pay more taxes, but no one wants to see their city go broke either. In my opinion, small annual tax increases are more palatable than a whopping tax increase some year in the future. 

I’m no finance guru and all the facts I have come from today’s article in the Daily Times. Either the reporter is trying to paint a conflicting picture or my ignorance is showing itself again. Here’s what I mean…

Contractual obligations for wages, healthcare and pensions continue to drive the budget, according to Councilman Nafis Nichols, the city’s finance director. Pension costs are expected to nearly double to $6.5 million while the city’s health care obligations will rise by 7.1 percent. The budget includes varying contractual wage increases for the city’s union workers, including firefighters and police officers. Non-union employees are expected to receive a 1.5 percent cost-of-living increase, Nichols said.
 Pension cost will double. Health care will rise by 7.1%. Wages will increase for city union workers, firefighters and police officers and non-union workers get a 1.5% raise. Where is all this money going to come from?
...council acknowledged in September that it faced a budget deficit, which Nichols attributed at that time to rising expenses, declining casino revenue and too much police overtime. 
There was a budget deficit reported 2 months ago but I guess it went away somehow. And please read this next line very one wants to be told there is too much police overtime when we're living in the most dangerous city in Pennsylvania. No one doubts a lot of overtime is being paid, but everyone will agree that if that's what it takes to keep police on the beat, please pay it and complain about it behind closed doors.  
“We made it. We have a contingency plan in place that we are following to a tee.”
I think he’s saying that the deficit has disappeared because they followed a contingency plan. What that usually means is someone didn't get paid on time.
To further increase revenue, city officials are considering adding parking kiosks and hope to beef up the city’s tax collection rate, he said. 
How many people pay for parking in Chester outside of downtown? A quarter gets you an hour. A single kiosk probably cost more than what they collect in the meters. 
The city also must combat declining casino revenue from Harrah’s Philadelphia Casino and Racetrack. The proposed budget includes $10 million in casino revenue — the minimum amount Harrah’s must annually pay the city.
I guess we can expect a couple more years of the minimum $10 million from Harrah’s. Then what?
The budget proposal also decreases the bottom line by $2.4 million from the current budget, a reduction mostly attributed to the absence of a $2 million tax anticipatory note. Nichols said the city is considering using a TAN in 2015. (A TAN is a short-term debt security issued by a state or local government to finance an immediate project that will be repaid with future tax collections).
So, we’re already anticipating borrowing money next year which must be reflected on the following year’s budget? See, I really don’t understand this money stuff. 

Council also approved the city’s 2012 audit. 
It shouldn't take almost 3 years to approve an audit? Imagine how much you can hide in the meantime. That just doesn’t sound right to me. 
Click HERE for the article


  1. The City needs to get out of the pension business, and start offering 401k's, most working people in this city don't have pensions. I shouldn't have to pay for your retirement until you die. The city also needs to start using its Government access channel to promote the businesses in the city, people need plumbers, roofer, and masons. If businesses that are located in the city are doing well the city will get more tax revenue. What is the city doing to promote the businesses that are here. And you can't play around with the numbers forever, Its going to catch up with you at some point. Part of the reason the city is in this condition is because politicians were lying and cheating and the financial picture of the city wasn't clear to all. People get into office talking about change and in up doing the same things they complained about, be up front about the numbers. Where is 2013 audit how long will we have to wait for the 2014 audit.

  2. Why is your sub title the most dangerous city in pa?

    1. I'm so glad you asked. As a reward for the first person to ask, it will be removed. I wondered how long it would take. Chester was voted PA's most dangerous city this year. I never posted the reference but it's easy to find with an internet search.