In a significant shift from last year, Lackawanna County commissioners have introduced a budget for the upcoming year that avoids raising property taxes, marking a unanimous decision that contrasts with previous contentious budget talks.
Commissioners Bill Gaughan and Chris Chermak, representing opposing political parties, have come together to support a preliminary 2026 budget that outlines $180,691,098 in spending. This cooperation comes a year after a divisive 33% tax hike was approved for 2025, which Gaughan had supported and Chermak opposed. Gaughan expressed appreciation for Chermak’s efforts in crafting a budget aimed at achieving “stability, predictability and sustainability.”
Gaughan remarked, “This doesn’t happen by accident. It’s the product of a solid plan, honest accounting and the hard work of county staff who tighten spending, found savings and kept essential services up and running.” Chermak also acknowledged the budget officials for their efforts and expressed optimism about identifying further savings as the budget progresses.
Looking Back: The 2025 Tax Increase
Last year, Gaughan advocated for a substantial tax increase to address a looming deficit nearing $30 million, which he attributed to prolonged financial mismanagement. Former Commissioner Matt McGloin also supported the hike but resigned shortly after its approval. In contrast, Chermak had proposed a more modest 6.3% tax hike, which Gaughan publicly criticized.
Understanding Property Tax Rates
The current tax rate, set at 89.98 mills, translates to a tax of $989.78 for a property assessed at the median value of $11,000. This rate is poised to change as new assessments take effect in January, the first major reassessment since the 1960s.
With reassessment, property values are expected to increase significantly, resulting in adjustments to tax rates. However, the county is legally required to maintain revenue neutrality initially, meaning the new rates should yield the same revenue as before. Commissioners have assured that they will not exploit the reassessment to raise taxes by the maximum allowable 10%.
Balancing the Budget: A Closer Look
Chief Financial Officer David Bulzoni presented a budget briefing that initially revealed a nearly $4 million deficit. This shortfall was addressed through several measures, including departmental adjustments, selling rights to collect past-due taxes, and a refund from the county’s health plan due to lower-than-expected expenses.
Bulzoni highlighted the importance of periodic tax adjustments to prevent budget deficits from ballooning, as seen with the $37 million deficit the county faced in previous years. He emphasized the challenges of maintaining a balanced budget without regular tax increases, especially given the slow growth of the property tax base.
The Role of Surpluses and Credit Ratings
In the past, the county has used its surplus to cover budget gaps. However, the commissioners are cautious about relying on this strategy, given that recent downgrades by Standard & Poor’s have increased borrowing costs. The county’s financial strategy now aims to maintain a surplus that equals 12% of annual spending, which would require a surplus of approximately $21.7 million based on the proposed 2026 budget.
Bulzoni noted the risks associated with using one-time revenue sources like surpluses, especially in light of the uncertainty caused by the lack of a state budget, which could impact funding for essential services.
