McHale

Releases Plan to Improve City Finances & Exit Act 47

Since Reading has entered Act 47, taxes have increased and the quality of
services has declined. That is no way to attract new jobs and revenue, or
encourage residents to remain here. Exiting Act 47 oversight so
government can work for us again must be a top priority.

Reading, PA- Jim McHale, candidate for Mayor, today continued his release of
comprehensive policy statements with his plan on addressing city finances and
exiting Act 47.

When Reading entered into Act 47 in 2010, I attended every public information
meeting and reviewed the proposed economic recovery plan. At that time, I
addressed City Council and urged them to reject the plan because it was poorly
conceived and would not work. Today, we know it has not, and we need to forge a
new path to financial independence and stability.

Some of the key reasons McHale urged rejection of the plan in 2010 were:

The plan was incomplete: it had no financial statements. It is impossible to
have a good financial recovery plan without financial statements.

The plan offered no solution for handling the Citys debt, and true fiscal
solvency cannot be achieved without reducing and eliminating debt.

The plan took no steps to protect taxpayers. Rather, it did nothing more
than raise taxes and reduce services without requiring fiscal reforms.

Act 47 was never designed to help residents or fix our problems, it was designed to
keep government afloat, McHale said. This Act 47 plan is what drove me to run for
mayor in the first place because I believe we deserve a government that works for
us and addresses our problems.

McHales plan today to put Reading back on strong financial footing is similar to
what it was in 2010 when he fought the Act 47 implementation. It focuses on four
key areas: transparency, debt elimination, affordable taxes, and economic growth.

Transparent Finances

One of the biggest issues facing taxpayers is that they dont really know how and
where their money is spent. This leads to wasteful and unnecessary expenditures in
city government.

As he has outlined in previous policy releases, McHale again proposes an Open
Checkbook for Reading government. This system would allow taxpayers to see (on
the internet) exactly what their money is spent on, and how much.


If we give people the opportunity to help reduce spending by letting them see
where and how their money is spent, they will respond, McHale stated. In addition,
transparency acts as a natural oversight of all city spending eliminating the need
for expensive audits to simply find out what we already know: city government
spends too much.

Debt Elimination

Currently, Reading is approximately $150 million in debt, and debt service alone
requires $14 million from taxpayers every year. Eliminating debt by leveraging the
assets of the city would free that money to be utilized both for tax reduction and
needed services like police protection, job skills training, keeping the city clean,
revitalizing neighborhoods, and more.

By leasing the citys assets to private companies, while still ensuring the rights of
residents and consumers who use those assets we can protect from unchecked cost
increases, and we can raise the money to pay off our debt, McHale said. Under my
administration, no assets will be leased without requiring the proceeds go directly
to debt reduction first.

McHale was referring to past city attempts at selling assets in which the proceeds
went toward covering general fund expenses, thereby never addressing a core
financial problem for taxpayers.

Dont spend money you dont have is a motto that Readings machine politicians
have failed to live by, McHale stated. Ill make sure its a cornerstone of how we
treat the taxpayers money.

Affordable Taxes

As outlined in earlier policy statements, McHale believes the city must overhaul its
current tax system to make it more understandable and less expensive for
taxpayers. Further, McHales proposals on taxes would help make Reading more
competitive with surrounding municipalities in the effort to attract and retain
employers and residents which in turn would increase City revenues without
increasing tax rates.

Everyone agrees we need to reduce taxes, but we must do it in a way that doesnt
hurt our other efforts for revitalization, McHale said. Our top priorities for tax
reduction must be providing relief to residents, and attracting new jobs.

McHale also took the city to task for its poor tax collection efforts; currently, city
government spends more collecting some of its taxes than they actually collect.

We need to stop losing money while trying to collect back taxes. Ill work to lower
taxes so we can see increased collection efforts, McHale stated.

Economic Growth

I have said it thousands of times before and for the past five years: without more
and better paying jobs, Reading will never grow, McHale stated

As outlined in past policy initiatives, McHales plan for encouraging job growth
focuses on matching worker skills with employer needs, tax reforms that make the
city competitive with the suburbs, revitalizing the citys housing areas, helping
improve schools, and dealing with public safety all to help attract and retain
employers.

For us to exit Act 47, we need to ensure expenses do not exceed revenue, and we
address our debt situation once and for all, McHale stated. I believe that by leasing
some of our assets, increasing the citys tax base instead of the tax rate, and
attracting good paying jobs, Reading can exit Act 47 within a year.

The fact is that whether it is creating jobs or getting out from under Act 47, there is
no silver bullet. We need a comprehensive set of policy initiatives that address the
root causes of our issues, McHale stated. I have a vision and a plan to move all of
Reading forward as Mayor that is based on concrete, proven ideas that work, and I
have released it to the voters for their review.

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