ALLENTOWN, Pa. — Allentown Mayor Matt Tuerk said he is considering a veto after City Council on Wednesday voted 5-2 to reject his request for a 3.96% tax increase.
Council instead will take $1.5 million from the city's reserve fund to fill a gap between projected revenues and expenses in next year's budget.
“It is literally kicking the can down the road. At some point, you have to increase your revenue. You can't just keep going to cash (reserves) or there won't be any cash left.”Mayor Matt Tuerk
“It is literally kicking the can down the road,” Tuerk said. “At some point, you have to increase your revenue. You can't just keep going to cash [reserves] or there won't be any cash left.”
The mayor was optimistic he could persuade at least four council members of the need for a tax increase that he described as “modest” and the “fiscally responsible thing” to do.
The city needs to find new revenues to cover the rising costs of materials, services and personnel — most of which are contractually obligated, Tuerk said.
“Costs are rising all around us, and we cannot avoid those rising costs,” Tuerk said. “We have to generate revenue in some way” to maintain “the services that our residents have to come to demand and to deserve.”
He said his proposal would see half of Allentown property owners pay about $2 more in taxes per month.
'Don't think that this is the time'
But three council members — Ed Zucal, Ce-Ce Gerlach and Natalie Santos — immediately voiced their opposition after the mayor presented his 2026 budget proposal last month.
And Councilwoman Cynthia Mota used her Nov. 4 Election Night victory speech to say she would cast the deciding vote against Tuerk’s proposed tax increase.
Mota on Wednesday introduced the measure to tap the city’s bank account rather than raise taxes.
“In my humble opinion, I don’t think that this is the time,” she said, noting residents are facing a $140 increase in annual trash fees.
She was joined by Gerlach, Santos, Zucal and Council President Daryl Hendricks in voting to remove Tuerk’s proposed tax increase from the 2026 budget.
Members Santo Napoli and Candida Affa voted against Mota’s amendment.
That vote does not finalize next year's tax rate. Council must adopt the full budget before Dec. 31 and still could amend the city's revenue and spending plans for 2026.
And the mayor’s veto pen looms large.
'Venial sin': Controller
Tuerk told members ahead of Wednesday’s vote that “it is not a good idea” to fund some of the city’s operations with its reserve fund.
“Paying out of reserves is the opposite of what we've been doing for a long time,” he said.
Tuerk offered an alternative that would've cut the impending trash fee increase by $25 while maintaining his requested 3.96% property tax increase.
“You can't be a little bit pregnant. Whether you're taking ($1.5 million) out of the fund balance or $800,000 … it's poor financial management.”Controller Jeff Glazier
That proposal still would've required about $800,000 in reserve funding, but the mayor said it would shift more of the overall burden to wealthier residents and commercial property owners.
Most of them pay for private trash services and wouldn’t be affected by a trash-fee increase, he said.
Council did not entertain that proposal, instead opting for Mota’s measure.
Controller Jeff Glazier urged council members not to squander any of the city’s more-than-$40-million reserve fund.
Tapping into reserves to pay any amount of operating costs is a "venial" sin if not quite a "cardinal sin” — and shows “council doesn’t have discipline and doesn’t have good financial management skills,” Glazier said.
“You can't be a little bit pregnant,” he said. “Whether you're taking [$1.5 million] out of the fund balance or $800,000 … it's poor financial management.”
What led to current situation
Tuerk repeatedly has urged council to accept more frequent smaller tax increases rather than sporadic large jumps.
He pushed for a 6.9% hike two years ago before acknowledging it was an "ambitious" request. The mayor twice lowered his request, but council rejected any new taxes for the 2024 budget.
The mayor vetoed council's budget, but members overrode him. He eventually let that budget take effect without his signature.
Tuerk and city Finance Director Bina Patel then warned the lack of new revenues could force officials to consider a significant tax hike in 2025.
Tuerk sought no tax increase for this year after the city earned $6 million more than projected from investments and a significant increase in its total assessed property value.
But the city is running out of alternative solutions to maintain its financial status after seven years without raising taxes, according to the mayor.
Going into 2019, then-Mayor Ray O’Connell sidestepped council to raise property taxes 27%.
The most recent tax increase in Allentown before then happened more than a dozen years prior. It's been two decades since the city's executive and legislative branches have agreed on a tax increase.
Council governing 'by vibes': Mayor
After Wednesday’s marathon committee meeting — which delayed council’s full session by more than two hours — Tuerk slammed some council members.
He said he found it “embarrassing” to watch some “make asinine decisions” during the long meeting.
“It’s challenging to govern with unserious people.”Mayor Matt Tuerk
"They are making decisions — and budgeting decisions — by vibes,” Tuerk said. “It’s challenging to govern with unserious people.”
He criticized Mota — who supported O'Connell's 27% hike seven years ago — for calling to again postpone a tax increase and those who supported her.
Some members feel it's "never the year [to raise taxes] because they lack courage,” Tuerk said.
He noted council’s composition soon will change, with Hendricks and Zucal to be replaced next year by Cristian Pungo and Jeremy Binder.
Tuerk questioned whether some members read his budget proposal and said he doesn’t think they listen to him or other officials in his administration. Some have their votes cast before any discussion, he said.
He said he believes Pungo and Binder will be more active council members and more capable of making “hard decisions.”
EDITOR'S NOTE: This story was updated to clarify Controller Jeff Glazier's comments on officials tapping into the city's cash reserve.
