As I write this blog, I am being inundated with thoughts about my candidacy and the multiple platforms/topics that I am representing and wishing to engage for the good of those who may be the most effected. One of these hot button issues is the idea of water privatization in the city of Allentown, PA. It is being discussed daily and being championed and fought against by multiple organizations/groups in the public/private sector. The problem, in my opinion, is that while many struggle over the fate of the water system, many of those who it will impact the most still don't have a clue.
Many may ask, "How can this be? It's in the newspaper, on the internet, being discussed on the news, and there has even been a public forum held, so how can ANYONE be clueless?" The truth of the matter is that many Allentown residents, like most of the U.S., are less engaged with the future and more worried about the here and now. If it doesn't affect their immediate lifestyle, home life, family, employment, or relationships, then it isn't on their radar; and it should be, but because it is often discussed in complex or less easy to understand terms, people tend to "blank out" and imagine that if they don't think about it then it won't affect them, which is very incorrect !
So, I have decided to use this platform to try to "break it down."
Allentown, PA is in debt. Period. It is due to the decision of a former mayor to put a police pension in place that is slowly but surely killing the City financially. The pensions are weighing the City down and money is running out. In fact, bankruptcy was a possibility. A bankrupt city is not pretty and the current Mayor decided that one of the ways in order to increase the monetary flow into the City and, hopefully, begin to pay off all debts owed, would be to utilize water privatization.
The definition of water privatization: It is used for private sector participation in the provision of water services and sanitation, meaning private companies come in and buy/lease the City's water source with contractual obligations.
Water privatization is not a new idea but some cities have stated that it has kept them from "going under", while many are wary and state there are histories of places that have had disastrous results. Over the past couple of months, proponents have stated the money gained will assist the City's debt and prevent a $200-million-and-growing unfunded liability in its pension plan from "breaking" Allentown. The City has to pay that debt or risk the current payments being made to the pension fund, from consuming at least one-third of the city’s entire general fund budget. Opponents have argued that with water privatization you have no control over the cost in the future to the citizens of their most important basic need — water, and that water rates will increase more than taxes, especially for lower income families. It's because water rates are not tax-deductible and City taxes are. Taxes will rise because the private water company will not provide or pay for many city services that Allentown is currently paying for with water revenue. The pension problem will decrease over time BUT the water rates will continue to rise. It has been quoted that the rates could go up from 700 - 1,200 percent over the proposed 50 year lease.
The question many ask is "What is the solution to Allentown, PA's own fiscal cliff, then ?"
Higher taxes, bankruptcy, or something worse ?
There are actually many alternatives to solve the pension obligation without the use of water privatization:.
Allentown could set up its own water authority that could loan the City money
.
Allentown could issue its own pension bonds.
In a few years, the Downtown and Waterfront development will be generating more tax revenue that could help pay the pension obligation.
Short term real-estate and Earned Income Taxes will have to be part of the solution
BUT none of the above is as costly as privatizing.
So, where do I stand? I speak for the people who, unfortunately, were not given a voice or the choice to decide on their situation that will affect us for the next 50 years...
The incredulous part of this whole scenario is that the strongest opponents did not ask to STOP this plan. They requested that the City allow we, the People, to decide our own fate by placing it on a referendum so that it could be placed on a ballot, and the public could vote.
It was struck down by the majority of Allentown's City Council who many thought had investigated and did their due process. It was, then, revealed in the oncoming weeks when new information was presented regarding the legality of the Mayor’s plan to use a private company, that instead of the Council stating matter of factly, "This is wrong. We have reviewed this and we have looked at the law and it’s not allowable," they actually did the opposite, which was the equivalent of a defendant stuttering and looking confused in a courtroom episode of LAW AND ORDER. In fact, they admitted to still needing to look further into the matter and investigating the situation. The obvious was, finally, admitted in regards to the Council being guilty of accepting what the mayor had told them without any type of investigation. So, those appointed and elected officials who have, continuously, insinuated they know what is best for us, in reality knew nothing at all.
I SAY NO TO WATER PRIVATIZATION !
