Luzerne County deficit shrinking, administration predicts

By Jennifer Learn-Andes - | May 18th, 2016 5:19 pm

By Jennifer Learn-Andes


Luzerne County government’s $16.9 million deficit had decreased by $2 million by the end of 2015, the county administration has predicted in a new report.

County Manager C. David Pedri delivered the projection to the council by email Sunday in a first-quarter report due May 15, while stressing in capital letters that it was based on unaudited analysis.

The final say on the state of county finances will come from the 2015 audit due June 30, Pedri said.

If the administration’s prediction holds true, it will show the county has started to “right the fiscal ship,” Pedri said.

“There will always be a lot of work to do, but at least it will show we’re moving in the right direction,” Pedri said.

Evidence of progress reducing the deficit also would reflect favorably on Pedri’s predecessor, former county manager Robert Lawton, who resigned the end of 2015.

While Lawton had been criticized for allowing the deficit to balloon to $16.9 million during his four years at the helm, he had promised to make strides toward getting the county out of the red in 2015.

Standard & Poor’s has kept the county on a downgraded investment rating with a “negative outlook” largely due to its failure erase the deficit and start building a reserve that will provide a cushion in emergencies.

Unless an unexpected windfall comes in, the county is not expected to make significant gains towards further reducing the deficit in 2016.

This year’s $130 million general fund operating budget relied on $7 million in revenue that won’t be available again or is now earmarked for other purposes, including $4.7 million from the suspended county homestead tax break on primary residences, which was supposed to be put toward efforts to create a reserve.

County officials must identify $7 million in new revenue or cuts next year — more if expenses rise — to avoid a tax hike and free up the $4.7 million in homestead money for the deficit reduction.

Pedri said Wednesday that he is keenly aware of the 2017 budget challenges and has started internal budget planning while monitoring this year’s spending and revenue.

All eight division heads will be heavily involved in 2017 budget planning, Pedri said.

However, half of these top management positions are now open. Pedri has started interviewing applicants for three of the four vacant division head positions overseeing human, correctional and operational services. Pedri’s prior position overseeing the law division will be publicly advertised soon, he said.

The council must confirm the manager’s division head nominees under the county’s home rule charter. Pedri said he plans to submit all nominees to the council by early July.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.