Judge allows Shamokin to maintain tax rate above state maximum

Dec. 05--SUNBURY -- Taxpayers in Shamokin will continue paying a 35-mill real estate tax and 2 percent earned income tax as part of the city's state-guided Act 47 recovery plan.

On Tuesday, Northumberland County Judge Hugh Jones approved the city's petition to keep millage rates 5 mills above the maximum millage rate and 1 percent above the maximum earned income tax, which would allow the city to generate nearly $1 million in revenue to balance the 2019 budget. It is the 11th consecutive year that the city was approved for the higher millage rate and the fifth year for the EIT.

"Without the court's approval, the city of Shamokin would run out of money, probably around October," city administrator Robert Slaby testified. "We would have no funds for payroll, no funds for insurance, nothing. We'd have to shut the city down."

One mill of tax generates approximately $24,000 in revenue for the city, Slaby said.

In the last four years, Slaby said the city's bills have been paid, no new positions have been created and no salaries have been increased.

"Is the city filthy rich? Now, but it is paying the bills," Slaby said.

Act 47 Coordinator Ryan Hottenstein testified that not approving the petition would negatively affect the city, such as not having police or emergency services.

"It would impact the health, safety and welfare of the city of Shamokin," Hottenstein said.

As part of the Act 47 protection program since July 2014, the city is considered a financially stressed municipality, which allows the city to avoid bankruptcy, secure state interest-free loan assistance and budgetary oversight and authorizes the collection of higher taxes. Hottenstein said the city can start drafting an exit plan for the program at the end of 2019.

The $4.14 million budget for 2019 will be discussed at a workshop meeting at 6 p.m. Wednesday followed by the first vote on the budget at 7 p.m. Monday. The budget will be on display until a special meeting at the end of December where council members will give final approval.

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