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Transfer tax hike bashed

Realtor: Home ownership ‘impossible’ under proposed changes

Greater Scranton Board of Realtors Vice President Wayne Evans speaks with City Council solicitor Boyd Hughes on Tuesday.

Rich Howells photo

At a City Council public hearing to discuss the 2012 operating budget on Tuesday, Greater Scranton Board of Realtors Vice President Wayne Evans decried Mayor Chris Doherty’s proposed 16 percent realty transfer tax increase, saying it would be “nearly impossible” for middle income families to buy a home in the city if taxes continue to climb.

The mayor’s proposed budget would raise real estate transfer taxes from 2.5 percent to 2.9 percent, property taxes by 29 percent, and restore business and mercantile taxes to the 2010 level of .1 percent from .075 percent in 2011.

Lackawanna County has already approved a 38 percent property tax increase for 2012.

Evans said Scranton’s newly proposed realty transfer taxes will make be the second highest in the state and more than twice the rate of any other municipality in Lackawanna County.

The realty transfer on the purchase of a home in Scranton for $100,000 would be $4,400, he continued, yet the same transaction for a home in Dickson City, Dunmore, Moosic, or Clarks Summit would be $2,000.

“Our realty transfer tax is higher than both Philadelphia and Pittsburgh and almost twice that of the city of Harrisburg, a city which is currently seeking bankruptcy protection and financial takeover from the Commonwealth of Pennsylvania,” Evans stated.

“In fact, since 2006, the year of the last increase in realty transfer tax, the city of Scranton has seen a dramatic reduction in the sales of single family homes and other properties.”

He said 495 single family homes were sold with a sales volume of $48 million in 2006, compared to 250 in 2011 with a sales volume of $20 million year-to-date. He estimated that it would take approximately 15 months to sell the homes currently for sale in Scranton, with homes sitting on the market for an average of 140 days as compared to 88 in 2006.

“We have seen the average sold price of a single family home fall from a high of $104,876 in 2007 to the current average of $82,864. You and I have lost at least 20 percent in the value of our homes,” Evans said, himself a homeowner, property owner, and small business owner in the city.

“We have to find a way to stop those trends. We have to.”

He called the tax increase “regressive” and asked council to roll back the tax, pointing out that lower income homeowners spend a higher percentage of their income on housing than higher income households, adding that up-front costs are the “biggest constraints” to homeownership for first-time buyers.

“The mayor’s budget on its face continues the attack on the American dream of homeownership in our city. Nationally, 65 percent of all residents are homeowners. In Scranton, that number is 55 percent. Economically healthy cities are not defined by how many renters occupy their neighborhoods, but an economically healthy city can be easily defined by how many homeowners occupy their neighborhoods,” Evans said.

“When it comes to Scranton’s future, homeownership matters, and it should matter.”

Only three additional speakers addressed council at the caucus, primarily to criticize the proposed tax increases and elimination of 29 firefighters in the mayor’s budget. Councilman Frank Joyce said during the regular Tuesday meeting that amendments are being drafted by all members of council and the “blow” to taxpayers will be softened as much as possible.

Councilman Jack Loscombe said he was “disappointed” that Doherty, Fire Chief Tom Davis, and Business Administrator Ryan McGowan did not attend the caucus to discuss how the fire department would be affected by the cuts despite being invited via letter. City Clerk Nancy Krake told council that only Davis responded to invitation, saying he could not come to the meeting because he was hunting that evening.

The Home Rule Charter mandates council to adopt an operating budget by Dec. 15.

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