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<p>HAZLETON &#8212; Mayor Jeff Cusat vetoed the city&#8217;s realty transfer tax Tuesday, saying it is unclear if the rate exceeds state regulations.</p><p>That leaves the city&#8217;s budget in limbo as Hazleton officials face a Thursday deadline to get a spending plan in place.</p><p>The tax, approved with the city&#8217;s 2018 budget, originally stood at 1.5 percent.</p><p>That rate seemingly violates the Pennsylvania tax code, which caps the realty transfer tax at 1 percent.</p><p>&#8220;The problem is that the veto leaves the budget underfunded,&#8221; said councilwoman Jean Mope.</p><p>Mope said Thursday is the deadline for finalizing the budget and taxing ordinances, and that puts the city in a precarious situation.</p><p>&#8220;I believe that the mayor and the solicitor were informed that the realty transfer tax was a maximum of 1 percent in early February and it was brought up at a meeting,&#8221; she said. &#8220;I don&#8217;t understand why the mayor waited until the thirteenth of the month to address it.&#8221;</p><p>Council newcomer Allison Barletta said she voted &#8220;no&#8221; on the budget and its taxing ordinances which raised the city&#8217;s real estate taxes from 4.51 to 5.85 mills because of concerns about the realty transfer rate and the nearly 30 percent tax increase.</p><p>&#8220;I did contact the county and the 1.5 percent rate has been in effect since 2014,&#8221; she said. &#8220;The council doesn&#8217;t seem to have been granted permission for the rate to be above the state maximum.&#8221;</p><p>Councilman Bobby Gavio, who voted in favor of both the 2018 budget and its taxing ordinances, said he was aware of some questions about the legality of the realty transfer rate. But he relied on the reasoning of previous councils who also approved the 1.5 percent rate. </p><p>&#8220;I thought perhaps the previous councils had special permission. It had been a rate approved for several years,&#8221; he said.</p><p>Gavio also pointed out that city solicitor Sean Logsdon researched the matter and pointed out other municipalities had a realty transfer tax above 1 percent.</p><p>Grace Cuozzo, who had served as a councilwoman until January and pointed out the possible inconsistency between the tax rate and state code for the past several years, said comparison with other municipalities had little value.</p><p>&#8220;Some of the municipalities that Sean cited had home rule and I believed allowed higher transfer taxes,&#8221; she said.</p><p>Both Mope and Cuozzo voiced concerns about the possibility of the city needing to pay back those who had paid the tax during the sale of properties.</p><p>Cuozzo said the passage of the inflated realty transfer tax had taken place under the tenure of two mayors and three solicitors.</p><p>&#8220;If this is a mistake, it should be paid by errors and omissions insurance,&#8221; said Cuozzo. &#8220;I&#8217;ll tell you where it shouldn&#8217;t come from &#8212; not one penny should come from the general fund.&#8221;</p><p>Mope has concerns about whether or not the city can amend its budget to meet Thursday&#8217;s deadline.</p><p>&#8220;I believe that we would need to amend it, advertise it and then have a second and third reading,&#8221; she said. &#8220;The budget right now isn&#8217;t balanced. We can&#8217;t fix it to meet that deadline.&#8221;</p><p>The Pennsylvania Economy League will hold a public meeting at 6 p.m. Thursday at City Hall to introduce a recovery plan subsequent to the city&#8217;s entry into distressed status under Act 47.</p><p>Several council members indicated they would seek the league&#8217;s input on what to do next in regard to the veto of the realty transfer tax.</p><p>Mayor Cusat did not return several phone calls by the Times Leader.</p><style>
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<div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2018/02/web1_cusat-election-photo-2015.jpg">
<div class="neCaption">Cusat </div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2018/02/web1_cusat-election-photo-2015.jpg</photo0><caption0>Cusat </caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>By Geri Gibbons</p><p>For Times Leader</p></bylineMeta></div>

Hazleton mayor rejects realty transfer tax, leaving budget in limbo