Scranton mayor proposes no-tax-hike city budget for 2025
Scranton Mayor Paige Gebhardt Cognetti's proposed 2025 budget would not increase taxes or change the garbage-collection fee.
The city's no-tax-hike budget proposal follows the Scranton School District also proposing no tax increase for 2025, while the Lackawanna County commissioner majority plans a county tax hike of 33% next year.
The city's $113.1 million budget proposal submitted to Scranton City Council is $5.6 million lower than the $118.7 million amended budget for 2024.
The 2025 budget says it "does not increase the city's real estate tax millage rates," and does not mention changes in rates of any other taxes the city collects, including wage (earned-income), payroll, local services and real estate transfer taxes.
The $300 annual trash fee would remain unchanged.
"We have managed expenditures and mitigated rising costs as best we can, including driving down health care costs while maintaining excellent employee health plans, and paring back budget line items to only fund what is necessary," according to a budget narrative.
A total annual budget for 2025 lower than 2024 is achieved partly by an approximately $8.6 million decrease in the city's contribution to its pension system, dropping from $18.4 million to $9.7 million, attributed to a 40-year pension amortization that the city entered into with the commonwealth that will end Dec. 31; as well as by moving $3.7 million in capital expenses from the operating budget to a separate capital budget.
Refinancing debt from 2016 saved $2.2 million. The city's credit rating also got a two-notch jump and a positive outlook for improved "liquidity" of cash reserves and not relying on one-time, federal stimulus funds to fill gaps. The city also again will not need a short-term, tax-anticipation loan to provide cash flow until tax collections come in, which will save $100,000 in fees and interest.
"While our cash position is stable, we have a long road ahead to true fiscal health given legacy obligations for pensions, health care and other benefits," the budget says.
The budget details various ups-and-downs of revenues and expenses. Some other highlights include:
• Real-estate assessments generally will continue to decline until 2026, when a countywide reassessment takes effect. While tax revenue may not increase as a direct result of the reassessment, the process and results should create a more fair and equitable tax base and encourage the confidence of prospective buyers and investors.
• A robust real estate market brought in more than $7 million in collections of delinquent real estate taxes in 2023 and 2024 to date, and the city expects to collect $4.2 million in these delinquencies next year. The city also expects to see an approximate $2.5 million rise in real estate transfer taxes in 2025. But the anticipated sale of the for-profit Commonwealth Health system and its Moses Taylor and Regional hospitals in the city to the nonprofit WoodBridge Healthcare would result in the city losing $835,625 in property taxes.
• Earned-income (wage) tax revenue has steadily risen over several years and the budget anticipates collecting $1.3 million more next year, for a total of $35.9 million in wage taxes. Collections of payroll taxes also increased from the 2023, the first year for this tax, to 2024 to date, and the city is budgeting this category to double to $2.7 million collected next year.
• Required minimum funding of workers' compensation will rise from $3 million this year to $3.9 million next year.
• Annual salaries for the mayor ($75,000), council members ($12,500 each), city controller ($53,300) and tax collector ($26,650 half of salary that city covers) all would remain the same.
• The budget provides salary increases generally incrementally across-the-board for 500 employees, including union employees under labor contracts and non-union employees. Proposed pay raises for some department heads include:
The budget also contains a salary comparison of comparable municipalities in the state and Lackawanna county. "There is still a significant gap in our salaries versus similar Pennsylvania cities, however, we have made progress and continue to seek competitive salaries for current and future staff. City employees need to pay their mortgages, too," the budget narrative says.
• Seven new positions in the 2025 budget include five provisional police officers, a public safety specialist in the Information Technology department and a traffic/sign maintenance employee in the DPW.
Cognetti submitted the budget proposal to council on Wednesday, Oct. 30. Council's next regular weekly meeting was rescheduled from Tuesday, Nov. 5, to Thursday, Nov. 7 at 6:30 p.m. at City Hall, because Tuesday is Election Day. So, this coming Thursday would be the soonest council might begin discussion or debate on the budget proposal or introduce legislation to enact it, starting a process that would unfold over several weeks.
CHRISTOPHER DOLAN / STAFF PHOTOGRAPHER,
Cover page of Scranton's proposed 2025 budget
