March 2, 2017
For Immediate release:
Scranton Mayoral Candidate Sues Scranton Government Over Taxes
Scranton Mayoral Candidate Gary St. Fleur and the Group of Eight strike back with a recent lawsuit filed today against the city of Scranton. The lawsuit, filed today at 9am, contends that the government of Scranton has been collecting Taxes in excess of the legal limit and that a mandamus should be issued against the city. The statutory law in question specifically states:
“The aggregate amount of all taxes imposed by any political subdivision under this section and in effect during any fiscal year shall not exceed an amount equal to the product obtained by multiplying the latest total market valuation of real estate in such political subdivision, as determined by the board for the assessment and revision of taxes or any similar board established by the assessment laws which determines market values of real estate within the political subdivision, by twelve mills.”(Act 511)
Act 511 taxes are considered the one of the City’s Primary Revenue sources, these taxes include Amusement Tax, Business Gross Receipts Tax, Business Privilege Tax, Earned Income Tax, Mechanical Devices Tax, Mercantile Tax, Local Service Tax, Occupational Privilege Tax, Occupation Tax, Per capita Tax and Real Estate Transfer Tax. They fundamentally include all taxes on the local level. The most recent budget shows a $10 million overage.
A Mandamus action would force the Mayor of the City to obey the law which under Act 511 reads:
“If, during any fiscal year, it shall appear that the aggregate revenues from taxes levied and collected under the authority of this chapter will materially exceed the limitations imposed by this chapter, the political subdivision shall forthwith reduce the rate or rates of such tax or taxes to stay within such limitations as nearly as may be. Any one of more persons liable for the payment of taxes levied and collected under the authority of this chapter shall have the right to complain to the court of common pleas of the county in an action mandamus to compel compliance with the preceding provision of this subsection. Tax moneys levied and collected in any fiscal year in excess of the limitations imposed by this chapter shall not be expended during such a year, but shall be deposited in a separate account in the treasury of the political subdivision for expenditure in the following fiscal year. The rates of taxes imposed under this chapter for the following fiscal year shall be so fixed that the revenues thereby produced, together with the excess tax moneys on deposit as aforesaid, shall not exceed the limitations imposed by this chapter”
Mayoral Candidate Gary St. Fleur who leads the Group of 8 and is Founder of local civic group Save Scranton(www.savescranton.com) maintains that the municipal government has been illegally collecting taxes from Scranton residents for the past five years. He and seven other residents subpoenaed current Scranton mayor William Courtright, the City Council, and the Pennsylvania Economic League (PEL), after the City attempted to triple the local services tax for fiscal year 2017. This tax falls under Pennsylvania’s Act 511 taxes; a taxing cap is placed on how much money can be collected, but the City of Scranton has exceeded the legal limit for the past five years.
The Judge who heard the first case ruled last week that the city of Scranton could triple its local services tax, but did not say that the city did not have to observe the Act 511 cap. Today’s case is brought forth to establish that the cap does apply to the city of Scranton and that it has exceeded this cap.
“Act 511 exists for a reason…..if the city of Scranton is at the point where it has to begin illegally collecting tax, you know that the city is admitting that it is functionally insolvent and the clock has run out,” says St. Fleur
If this suit prevails it will mean the city’s current budget will be reduced by $10 million. Mr. St. Fleur contends that the City of Scranton is in severe financial distress and there is practically no recourse left except for the government to file for Chapter 9 Bankruptcy. He has also initiated a ballot measure to force the City into Bankruptcy. A Wells Fargo report from October 2016 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 ($195 million), and issue bonds (that are rated as ‘junk’ status by rating agencies) in order to sustain adequate revenue stream. Mr. 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 cities financial burdens to make lessening taxes possible.
The suit was filed today at 9am and the city of Scranton was served at 10:30am through Mayor William L Courtright and Scranton government Business Administrator David Bulzoni. They have twenty days to respond.