Mayor Papenfuse on Monday announcing a sponsorship deal with Mary Smith, director of the Hershey Harrisburg Regional Visitors Bureau, that the city says will help fund two full-time hires next year. The 2016 budget adds dozens of new positions at city hall, about half of them funded through outside sources.
In an unapologetic rebuke to the state’s recovery plan for Harrisburg, Mayor Eric Papenfuse on Tuesday night proposed a 2016 budget that includes at least $5 million in additional expenses and 36 new positions, paid for in part by $3 million in new taxes he says are needed to provide essential services for the Pennsylvania capital.
Presenting City Council with his spending plan in preparation for December’s budget hearings, Papenfuse described the expenses as a way of fixing a state plan he has repeatedly said is not working and of “building critical capacity” at city hall.
Some of the additional expenses are inherited, and Papenfuse was quick to point blame at incorrect projections by the state regarding the price of certain budget items. Among these are health care and pension costs, which the administration said will each be $1 million higher than initially projected for next year.
At the same time, however, Papenfuse sent a clear signal through his proposal that he will demand much faster growth at city hall than the state was prepared to recommend in the guiding document it drafted two years ago.
The mayor wants the growth to be paid for in part through the tripling of the local services tax, a flat tax on anyone who works within city limits, which would increase from $52 to $156 per year, or from $1 to $3 per week. After a few months’ delay before the hike can be enforced, the city expects it to net $3 million next year.
Calling it the “least painful” of available revenue sources, Papenfuse said the local services tax hike would not affect retirees and people earning below $15,600 per year, while being distributed between working residents and commuters.
The budget’s new hires would encompass 28 union and eight management-level jobs, ranging from additional firefighters and police officers to public works employees, bill collectors and staff devoted to managing the city’s annual festivals.
About half of the new positions would be funded by sources other than city taxpayers. Five additional police officers will be partly funded by federal community policing grants, while four new firefighters are expected to pay for themselves through savings in overtime. A litigator position in the city solicitor’s office is expected to pay for itself, as are three additional bill collectors.
Eighteen of the proposed hires—17 union workers and one manager—will fall under the umbrella of a new “neighborhood services” division Papenfuse plans to create next year. The new division, building on recommendations in a consultants’ report last year, will merge trash collection with tasks like street repair, park maintenance and fielding 311 calls in a single unit with a $15.8 million budget.
The neighborhood services budget, which is separate from the tax-dependent general fund, will be funded almost entirely by Harrisburg trash customers.
Papenfuse described the additional sanitation staff, along with $1.3 million he plans to invest in new equipment, as essential to providing reliable services to both residents and the hundreds of commercial trash accounts the city hopes to win back from private haulers in the next two to three years.
Papenfuse said Tuesday night that he had reached agreements with many commercial customers, along with the three major private trash haulers in the area, to switch their accounts back to the city. But the campaign to win back such clients has also hit snags, including a lawsuit last year accusing the city of “unconscionable” trash rates that it said subsidized government expenses unrelated to sanitation.
The proposed 2016 budget depends heavily on revenues the city is set to lose if it ever leaves the state oversight program for financially distressed municipalities. These include the hike in the local services tax, which cannot be assessed without approval from the state court overseeing the city’s recovery, and an increase in the local income tax that has been in effect since 2012.
Papenfuse, addressing this concern Tuesday, said he hoped to make up for these losses in future years with a combination of revenues from new residents and businesses and a permanent authorization of certain tax hikes through a home rule charter initiative. He also said, in reference to the state’s 2018 deadline for the city’s exit from state oversight, “There is no chance we’re getting out on their timeline.”
Even if council approves the mayor’s budget as proposed, it doesn’t necessarily mean the city will spend all the money it’s asking for. Since taking office, Papenfuse has consistently scaled down or withheld expenses until the city had demonstrated it had sufficient revenues coming in to pay them.
But the administration was resolute in defending the new expenses. Comparing the city to a “ship that isn’t sinking anymore, but needs some repairs and investments in human and physical capital to make her seaworthy,” finance director Bruce Weber said the choice was either to spend now or “put her out in dry dock and go home.”
“If we can’t run the city functionally at a minimum of capacity, with some realistic plan for future improvements, then you might as well close up the city now,” he said.
