Property taxes in Scranton, Penn., will be lower thanks to Gary St. Fleur, the city’s Libertarian mayoral candidate, who won a major court victory for the city’s taxpayers on Oct. 18. Lackawanna County Common Pleas Court Judge James Gibbons made a final ruling that the city of Scranton must follow the Act 511 requirement for cities to cap property taxes at 1.2 percent of property valuation.
“This case forces the city to confront the reality that they have run out of time and that the Scranton taxpayer cannot bail out the city of Scranton,” St. Fleur said. “The state legislation is written to protect citizens from excessive taxation. If home values are plummeting, that is a sure indication that the people are becoming poorer. It is unconscionable to continue increasing the levying of taxes on an already impoverished people.”
Scranton has levied taxes in excess of the Act 511 limitations for several years. Last year alone, excess taxes amounted to $10 million. The city’s argument that it was exempt from Act 511 because of its home rule status was specifically rejected by Judge Gibbons, who ruled that “Act 511 clearly and indisputably applies to the City of Scranton.” He went on to elaborate that “Act 511 denies Scranton the right to repeatedly levy and collect taxes in excess of its prescribed cap without taking further steps.”
St. Fleur joined seven other Scranton taxpayers in March to file a lawsuit protesting the illegality of the city’s property tax hikes, and this new ruling vindicates their hard work.
“In other words, the city of Scranton is unquestionably subject to Act 511,” St. Fleur said. “This means that Scranton’s economic recovery plan is a farce and bankruptcy is an inevitability. Furthermore, taxpayers will be liable for refunds for any taxes paid in excess of the cap for the past three years. The potential cost to the city will be upwards of $50 million dollars.”
St. Fleur contends that Scranton is in severe financial distress and there is practically no recourse left except for the government to file for Chapter 9 bankruptcy, and he has initiated a ballot measure that would allow citizens to force the city’s hand. An October 2016 Wells Fargo report explains that a 2014 audit of Scranton revealed $375 million in liabilities and $184 million in unfunded non-pension post-retirement benefits to government employees. The city has had to sell various public assets, such as the sewer authority for $195 million, and issue “junk”-rated bonds in order to maintain its revenue stream.
St Fleur is adamant that lowering taxes across the board is the only way to Save Scranton from its economic depression.
“Bankruptcy would lessen the city’s financial burdens,” he said, which would make it possible to decrease taxes.