WILKES-BARRE — The state Department of Community and Economic Development has denied Mayor Tony George’s request to declare the city financially distressed.
“I’m kind of shocked,” George said. “They understand we’re $3.5 million in debt this year,” and larger deficits are projected down the road.
City Administrator Ted Wampole said he and the mayor were informed of DCED Secretary Dennis Davin’s decision during a teleconference Friday morning with DCED Deputy Secretary Rich Vilello and C. Kim Bracey, executive director of the Governor’s Center for Local Government Services.
In a letter to George, Davin said Wilkes-Barre’s citizens “deserve every opportunity for the city to retain its financial independence, and keeping Wilkes-Barre out of Act 47 at this time provides that opportunity.”
George sent a request to Davin on June 29 asking him to deem the city financially distressed as defined under the Municipalities Financial Recovery Act of 1987, commonly referred to as Act 47, citing projected budget deficits as a major reason for his request.
Act 47 allows distressed municipalities certain revenue-collection advantages other cities don’t have, such as increasing the local services tax — the $1 tax withheld weekly from people employed within city limits — and imposing an earned income tax on people who work in the city but reside outside its borders, commonly called a commuter tax.
DCED Press Secretary Michael Gerber said the department — based on testimony presented at an Aug. 1 public hearing, written testimony, and an extensive review and analysis of the city’s financial data — found several actions the city could take before it needs to enter Act 47 “as a last resort.”
Davin’s decision gives the city the opportunity to incorporate those recommendations in the 2019 budget process, and reassess the city’s financial condition and need for Act 47 status at a future date, Gerber said.