Lehigh County commissioners passed an amendment to the 2019 budget that keeps the millage rate at 3.64, opposing the administration’s plan to raise taxes during a four-hour meeting Oct. 10.

The amendment, sponsored by Commissioner Brad Osborne, a Republican and recent contender for the office of Lehigh County executive, passed along party lines 6-3.

The amendment specifies the millage rate shall be reduced in an amount representing $4,448,840 in 2019 real estate tax value.

This equates to a millage reduction of 0.15 setting the millage rate at 3.64.

This will move the millage rate from the budget’s proposed 3.79 mills to 3.64 mills.

The amendment will take $4.4 million from the proposed budget’s line item from the Stabilization Fund and transfer it to the line item for the Operating Fund - described by County Fiscal Officer Tim Reeves as the county’s “checking account,” thus negating the need to collect that amount in real estate taxes which has consequences down the line according to Reeves.

The stabilization fund is often referred to as a “rainy day fund.”

The move forestalls an increase in income taxes, but, according to Reeves, forces the administration to finance or borrow money for capital expenditures for which they had planned to pay cash.

“The ultimate repercussion of this action,” said Reeves in a post-meeting interview, “is when they do raise taxes, the taxes will be higher.”

In doing so, commissioners rejected the advice of both Reeves and County Executive Phillips Armstrong.

Reeves worked as Lehigh County’s director of collections and tax claims under former Fiscal Officer Brian Kahler before accepting an appointment to his current position as fiscal officer.

Reeves argued against the amendment saying passing the proposed amendment would lead to a case of “Robbing Peter to pay Paul.”

At least one Republican Commissioner Nathan Brown, seemed to acknowledge the inevitability of the need to raise taxes.

“I think a tax increase is coming soon,” Brown said.

Commissioner Brad Osborne had a more nuanced rationale for opposing the administration’s proposed tax increase.

“It was clear to me the budget had to be amended,” Osborne said in a post-meeting interview

The administration’s five-year plan showed the stabilization fund for 2020 was being drawn down to $12.7 million which is well below the Government Finance Officer’s Association’s recommended guideline of $18.7 million for the stabilization fund.”

Osborne said the GFOA recommends the stabilization fund be $18.7 million, or equal to 60 days of operational expenses.

Osborne said there has been an average favorable variance for the past six years of $7.5 million, meaning the administration has budgeted for more expenses than was spent.

He said a 4.1 percent tax increase would yield $4.4 million for 2019 which was not warranted.

Osborne said the five-year financial projection presented by the administration during the budget presentation “ignores the historical favorable fund balance average $7.5 million each year.” sponsor of the amendment Osborne argued, “We [the administration] don’t have a good track record of estimating expenses and revenue.”

“This puts us further behind the eight-ball,” said Commissioner Dan Hartzell in a later interview. “I wish the administration’s budget had passed more or less intact; instead the changes made by the majority of the board will only make a bigger tax increase likely in the near future.”

Commissioners were expected to vote for the final budget on Oct. 24.

The county executive will have an opportunity to veto the budget. If he does, then commissioners can vote to overturn the veto.

In other business, commissioners considered more than 20 amendments to the 2019 budget.

Most were routine, but two were the source of passionate pushback from county department heads and fellow commissioners.

A proposed change to the salary schedule for nonunion workers got the most attention.

The amendment, sponsored by Osborne, proposed that “step increases for nonbargaining unit employees” be “removed from the budget and replaced with a 2.5-percent wage increase” for nonunion employees.

Commissioner Dr. Percy Dougherty opened the discussion with an objection to the idea.

He said the plan is “very unfair.” He suggested waiting until “we find a better way” and to wait for a “pay study.”

The proposal motivated the department heads to stand and strongly argue against the action. They all saw it as bad for their employees.

Rick Molchany, director of General Services, said the plan, “makes no sense.” He urged the Commissioners to not “miss our chance to set pay policy.”

“Motivation is not gained through pay increases,” Molchany said.

“You have to address job dissatisfaction.”

District Attorney Jim Martin commented.

“I represent the non-union people in my office.

“It’s high time that employees be treated better.

“You have a terrific work force who deserves fair treatment.”

Martin told commissioners after 21 years on the job, “I happen to have some institutional memory.”

“I also have supervisors making less their subordinates.”

President Judge Edward Reibman referred back to the pay study mentioned by Dougherty.

“This nonexistent, illusory pay study” needs to be done.

He said the proposal to drop proposed step increases “affects morale.”

“Our important assets are our people,” he noted.

He urged commissioners “to take into account that we know our people.

“Wait for the pay study so we have some objective basis” for decisions. “Reject the amendment!”

Coroner Scott Grim also wanted commissioners to wait for the pay study.

“We ask [our non-union employees] to go above and beyond the call of duty.”

Controller Glenn Eckhart, Director of Corrections Janine Donate and Public Defender Kim Makoul all took turns at the microphone and, together with their fellow department heads, presented a united front to commissioners opposing the amendment and supporting the idea they wait until the pay study is completed before taking action.

Brace urged the pay study be wrapped up by the end of February 2019.

Director of Administration Ed Hozza Jr. addressed commissioners on the status of the pay study being done by Arthur J. Gallagher & Co., a firm specializing in compensation and benefits practices.

“Your time schedule of February is aggressive,” Hozza said.

One amendment proposal sponsored by Dougherty seemed to catch fellow Commissioner Geoff Brace by surprise. The proposal dramatically reduced grant money to several area nonprofit organizations including the Bradbury Sullivan Community Center which was slated for a cut from the budgeted $10,000 to $2,500. The grants are from the Hotel Tax Fund line item of the budget.

Other cuts proposed include: Allentown Art Museum - from $25,000 to $20,000; Arts Quest - from $10,000 to zero; Davinci’s Discovery Center - from $25,000 to $20,000; the Martin Luther King and Coretta Scott King Memorial - from $10,000 to $2,500.

South Whitehall had been slated for a $2,500 grant but the proposal reduced it to zero.

Dougherty said in an interview the intent of the reductions was to increase the amount that could be put to paying for the county-owned baseball stadium.

After heated objection from Brace, the amendment was withdrawn. The grants remain in the budget.