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Pocono News Section
Hazleton Facing Possible Bankrupty
Hazleton Facing Possible Bankrupty - Wednesday, June 24, 2009 at 5:30PM EST
Reported by: Andy Mehalshick
Wednesday, Jun 24, 2009 @ 05:30pm EST
HAZLETON, LUZERNE COUNTY- There's a budget backlash in Hazleton. The city is facing bankruptcy. That could mean major cutbacks and lay-offs in city services, including the police and fire departments.
The money troubles apparently have to do with a pension fund. It all has to with a move made by Mayor Lou Barletta in 2003 to prevent layoffs and balance the budget.
The city has been overpaying into its pension fund, some $500,000 a year, for the past four years. It totals about 2 million dollars.
Barletta used that overpayment to pay for healthcare benefits for retired police and firefighters. Barletta was told several years ago, by the Auditor General's Office, that they didn't see a problem with the use of that money, but they wanted to perform an audit on the books before making any formal decision.
The mayor says he assumed it would be okay. He rolled the dice since it was an overpayment anyway. But the state now says they could not use that money and wants Hazleton to repay the 2 million dollars. The city has taken the state to court hoping for permission to use that money.
"If we were putting extra money, overfunding the pension, it just was common sense to allow us to use that money to pay retirees health benefits, which I believe is part of pension to begin with," says Barletta.
So the city must win a court appeal or get a law passed to allow it to use that overpaid pension money, or they will have to reimburse their pension fund of 2 million dollars.
"Quite frankly if the bill is not passed, I'm not optimistic we will be successful. The city could be bankrupt," says Barletta.
Taxpayers like Joe Boyle say they are watching very closely and don't want services cut. "It's using tax dollars for peopleÕs pension. ItÕs tax dollars for people's pensions. I don't see what the problem is," he told Eyewitness News. | | |
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