SHAMOKIN — City council took a first step Tuesday in placing a referendum on the ballot for the May 21 primary election asking whether a government study commission be formed to draft and recommend a home rule charter.
Council unanimously approved during a special meeting at City Hall the first reading of Ordinance 2019-01, which reads “shall a government study commission of seven members be elected to study the existing form of government of the City of Shamokin, to consider the advisability of the adoption of a home rule charter and, if advisable, to draft and recommend a home rule charter.”
Voting in favor were Mayor John Brown and councilmembers Barbara Moyer, Charlie Verano, Scott Roughton and Dan McGaw.
Council is expected to vote on the second and final reading of the ordinance at its Feb. 11 regular meeting. The deadline to have the referendum on the ballot is Feb. 19, which is 13 weeks before the primary election.
Home Rule government transfers the basic authority to act in municipal affairs from state law, as set forth by the General Assembly, to a local charter that is drafted, adopted and amended by municipal voters.
During a workshop held prior to the special meeting, council and administration discussed for 45 minutes the various aspects of Home Rule and financial history of the city, including it being declared a financially distressed municipality by state Department of Community and Economic Development (DCED) on June 16, 2014.
On Feb. 23, 2015, city council unanimously adopted a financial recovery plan containing 128 initiatives. A major initiative in the city’s Act 47 plan is establishing a new city charter under Home Rule, which would allow the city to maintain the court-approved earned income tax rate of 2 percent. State law sets the cap rate at 1 percent for all third class cities, but Home Rule does not have any limitations for earned income tax for residents of a municipality.
For the 11th consecutive year, a Northumberland County judge granted in December the City of Shamokin permission to maintain a 35-mill real estate tax, while also approving for the fifth year in a row a 2 percent earned income tax.
“The purpose of having Home Rule, is so that we continue to be able to survive as a government,” McGaw said. “If we don’t have a Home Rule, we will end up going bankrupt because we loose extra money. Then the state steps in and they manage us.”
Brown was told by state officials that if a Home Rule charter is approved, the city will be removed from Act 47 immediately because it will “financially stable enough” with having the 2 percent earned income tax.
“If this passes, we are capable of sustaining the city, as it is, with that percentage,” Brown commented. “This is a way to fix ourselves.”
The referendum can be defeated by a majority voting against it or a lack of candidates. If the referendum is defeated in the primary election, it cannot be placed on the ballot again for four years.
According to statute, the option exists to have either seven, nine or 11 residents serve on the commission. During a discussion on how many people should be on the city’s commission, Roughton expressed interest in having more than seven members elected.
“The more there is, the merrier, for the simple fact we would get more input,” Roughton said during the work session.
Administrator Robert Slaby said candidates must follow the state election code, which relates to the nomination of a candidate by nomination papers filed for offices elected by the voters. The required number of signatures to run for a Home Rule commission seat is 10 signatures. Current members of council are permitted to run for the commission.
Slaby said if an insufficient number of persons file nomination papers for the commission, the question would still be placed on the ballot. Write-in candidates would need a minimum of 10 votes. Even if a majority approves the referendum, the full slate of commission members must be elected before it is considered approved, he said.
Council later approved a motion made by McGaw and seconded by Verano to have a seven-member commission. Council then approved a motion made by McGaw and seconded by Roughton to approve the first reading of the ordinance.
In justifying his vote to accept the first reading of the ordinance, Verano stated, “I would be doing an injustice to the people of Shamokin if I didn’t vote to put this on the ballot and let them decide.”
About 20 years ago, Northumberland County commissioners attempted to establish a Home Rule form of government, but it was soundly defeated by voters. According to Slaby, this is the first time the city has made such an attempt.
Slaby commented, “We are in a different situation here. My opinion is that Shamokin isn’t broke. It isn’t mismanaged. It is a tax issue and a lack of revenue. Without that earned income tax, we would have to shut down in August.”
Within nine months of a referendum approval, a commission must choose Home Rule, an optional plan or no change. Another nine months is provided to write the charter and a final report with an additional two months, if council is elected by districts. The Home Rule or optional plan is either adopted or rejected by the voters.
Limitations of Home Rule include the U.S. Constitution, state Constitution and state laws that are uniform and applicable throughout the commonwealth, including, but not limited to, election code, open records law, regulation of utilities and the vehicle code.
Slaby said, “(The commission) can simply take our third-class city code and add stipulations that 5 percent (35-mill real estate tax) and additional one percent (earned income tax) be included. They can also re-write the whole thing.”
Brown said the city did explore other options, including asking the county to reassess properties and requesting the state change the third-class city code to allow higher earned income tax than what state law permits. He said of the potential of seven elected people on the commission, “They will have a lot power as to how the city moves forward and how the government is run.”