Jeannette passes draft budget, EIT increases
Jeannette City Council passed its preliminary 2015 budget last week, calling for an increase of .5 percent in the Earned Income Tax (EIT) but no increase in property taxes.
The EIT will be 2 percent total, with .5 percent going to the school district and the remaining 1.5 percent will go to the city.
Mayor Richard Jacobelli and councilmen Gabriel Homan and Mark Levander voted in favor of the draft spending plan. Councilman Mark Clark was absent from the meeting.
Jacobelli said he hopes that when Governor-elect Tom Wolf takes office, he will shift the state away from pensions and toward contribution retirement plans.
The city’s pension debt has long been the source of Jeannette’s financial woes.
“Even if we were in Act 47, the pension would still need to be paid,” Jacobelli said.
He added that with the increase in the EIT, which will bring in an additional $500,000 to spent solely on pensions, “the city is poised to emerge from being a distressed municipality.”
New city manager Bruce Jamison created five budget scenarios, so that council members would have options and could see how each option would impact the overall financial picture of the city.
Those scenarios included versions of the 2015 budget that eliminated the fire department, one that eliminated half the police department, one called for property taxes and the EIT to be increased and another called for no changes to be made.
None of the solutions would have entirely righted the city’s ship, all would have been at least two-year plans to get the city to “break even” by the end of 2016 at the earliest.
“I’ve tried every possible scenario,” said Jamison. “This is a monumental amount of funding that you need to get caught up.”
The EIT increase was chosen by council as the more palatable option because those funds are required to be used on pension debt and once that debt is eliminated, the EIT is required to be lowered.
Homan, who has voted against all tax increases, said he changed his vote after sitting down with the mayor and Jamison.
“It is the faster way to deal with the pension issue,” Homan said. “I voted in principle against it (last month). We need to be managing for decline. I wanted to get rid of the paid fire department but it didn’t pass.
“I want to dig in to evaluate the garbage and whether to keep it in house. But I’ve been met with a lot of resistance. I’m attempting to (plan) for the city for the next 10 to 20 years.”
Ultimately, and after closing his eyes for a minute and taking a deep breath, Homan did vote in favor of the EIT increase.
Jamison explained after the meeting, the EIT increase is for residents and for those who work in the city.
Those who work in Jeannette and live elsewhere will also have a 2 percent EIT tax, with 1 percent going to their home municipality and 1 percent coming to the city.
The manager believes that an increased EIT will bring the city’s finances back into line within two years. Jamison has said the budget has been cut as much as it can be without eliminating services or potentially impacting the safety of equipment used by police and fire department employees.
Former council finance chairman Bill Bedont, whose resignation was approved last week because his family is relocating out of state, originally sought this increase in September but it was initially voted down.
Bedont’s seat must be filled by Dec. 19.
Those interested in joining council should contact city hall at 724-527-4000.
Kristie Linden is an editor for Trib Total Media. She can be reached at [email protected] or 724-838-5154.