Scott Ott

Executive Veto Validates Board Budget Page 1 of 2

NEWS RELEASE

November 12, 2012 ScottOtt@LehighCounty.org 610-810-1688

CONTACT: Scott Ott, vice chairman Lehigh County Board of Commissioners.

Lehigh Executive's Veto Validates Commissioners' Budget Plan

Commissioners Need One More Vote to Override Veto On Wednesday

Lehigh County Executive Bill Hansell proved that spending actually can be cut and he validated the Commissioners' approach to doing it when he vetoed their $5 million spending cut last week but substituted his own $3.5 million cut, according to board Vice Chairman Scott Ott. "The allegedly impossible can be done, and done quickly," Ott said. "In just seven days Mr. Hansell found 70 percent of the cuts we directed him to nd. We're giving him more than year to nd the other 30 percent. We knew he could do it. We told him so at the beginning of the process when we laid out our expectations for spending cuts and a taxrate cut. There's no reason for this veto." At this Wednesday's meeting (11/14 at 7:30 p.m.), the Commissioners will vote on whether to override the Executive's veto. They'll need six votes to do so. Republican Commissioners Brad Osborne and Percy Dougherty voted with the Board's two Democrats against the $5 million spending cut on October 10. While insisting they favor spending cuts, they expressed concern that the amount was too high. Osborne also said he thought the Commissioners should decide where to cut, rather than the Executive. But Ott said the Executive's veto strategy removes the amount objection, and afrms the approach, which he said is more in keeping with the separation of powers in the county's Home Rule Charter.

Ott said he understands that Osborne and Dougherty wanted to be sure the Commissioners' amended budget is scally responsible. Now that the Executive has conrmed it, Ott said he's hopeful that Osborne and Dougherty will join Commissioners Tom Creighton, Lisa Scheller, Vic Mazziotti, Mike Schware and himself, to override the veto on Wednesday night. In a 5-4 vote on October 10th, the Commissioners cut $5 million in spending and gave the Executive the choice of deciding where those cuts would happen. (Hansell has mischaracterized the Commissioners' plan as requiring staff reductions. It does not.) His director of administration, Tom Muller, said the Commissioners had refused to make line-item cuts because no cuts could be made. Muller said the county is already on pace to run a $7.5 million decit going into 2014. The President Judge, District Attorney,

Scott Ott

Executive Veto Validates Board Budget Page 2 of 2

Coroner, Sheriff and other county ofcials each took a turn at the podium predicting the dire consequences of any spending reductions. However, for the past eight years the Budget vs. Actual Spending Variances 2003-2011 county has predicted large annual decits and ended up with surpluses each year, Ott $9,000,000 said, noting the $6.68 million average variance between the predicted decit and $6,750,000 actual surplus. $5 million

"That simply means there's enough cushion in the budget so that nothing catastrophic would happen if the county spent about 1.45 percent less in 2013 than it budgeted in 2012, which is what our amended budget plan does," Ott said.

$4,500,000 $2,250,000 $0

2011

2009

2007

2005 Average

Hansell also vetoed a Commissioners' amendment that would cut the property tax millage rate, and he substituted his own version that cuts the tax rate by 40 percent less. The administration had portrayed a millage-rate reduction as irresponsible, proposing instead a one-time discount that would leave the rate at 11.9 mills where it jumped after the 16 percent tax hike in 2010.
Data Supporting Chart Above General Fund 2011 2010 2009 2008 2007 2006 2005 2004 Average Budget v. Actual Variance $ 8,122,261 $ 7,824,165 $ 5,320,813 $ 5,573,419 $ 7,655,456 $ 5,734,495 $ 6,100,865 $ 7,124,735 $ 6,682,026

Data Source: Lehigh County Financial Statements

Ott said he's glad Hansell has taken a second look and realized a tax-rate cut can be done without increasing the decit, if spending cuts are included.

However, Ott added, "More can be done to keep more money in the hands of Lehigh County residents and small business owners. Cutting the tax rate, rather than issuing temporary discounts, is the right approach. If the Executive wants to raise rates in the future, he should have to ght for it. The 16 percent tax hike of 2010 should not become the 'new normal.'" --30--