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Washington and Butler have a lot in common

Washington and Butler have a lot in common

But one has a budget surplus while the other had a deficit

In the famous novel "A Tale of Two Cities" by Charles Dickens, the author describes two towns -- London and Paris -- and two main characters who look alike but couldn't be more different under the surface.

The famous first line, "It was the best of times, it was the worst of times," could be applied today to two towns in Western Pennsylvania, sister cities that should be in the same circumstances but are inexplicably quite different.

The city of Butler, the county seat of Butler County, has a population of about 15,121, with about one-third of its properties generating no property tax.

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Those tax-exempt properties include schools, numerous churches, a hospital, county housing, a prison and government buildings, such as a county courthouse and county government building, all the same features as the city of Washington, which is about the same size as Butler.

In Washington, the county seat of Washington County, the population is about 15,268, and 34 percent of the properties are tax exempt as well.

Most of the buildings on each main street are historic; Butler has the Lowrie/Shaw House and Washington, the David Bradford House. Each has trouble keeping storefronts open as competition with malls increases.

Median household income is similar -- between $25,000 and $26,000 -- with 20 percent of the population below the poverty line. Both third-class cities are just under 3 square miles in size and have a full-time police force and a paid fire department.

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Statistics show you're more likely to be killed or beaten in Washington, but thieves seem to prefer Butler.

If you closed your eyes in one and awoke in the other, you wouldn't notice the difference.

So, how is it possible that Butler finished 2007 with a $1.24 million surplus and Washington, a $900,000 hole in the budget?

Delinquent taxes a key

There are a variety of reasons for the disparity, some of which could be good news for Washington, which last year began preparing for bankruptcy, should it become necessary.

Butler, too, was knocking on the door of financial doom several years ago until city officials took a fresh look at taxes and spending. Development in nearby Cranberry was also an element in the city's rehabilitation.

Butler Mayor Margaret Stock said it's too early to say if the city has weathered the worst, but she believes it's on the way to recovery.

"I don't know if we've overcome everything," said the mayor, who is serving the third year of her first term. "It was a combination of things all at once."

Recovery efforts were due, in part, to finding more than 50 landlords who should have been paying business privilege taxes but were not; increased efforts by the city treasurer's office to collect back taxes, and rounding up per capita taxes owed by tenants. The city used a collection agency for some taxes.

"That was a much more aggressive, concerted effort," Ms. Stock said. "That was huge."

Butler also sought give-backs from unions and hosted about $8 million worth of building projects in the city, including construction of a bridge, jail, hospital and ballpark.

Although municipalities sometimes waive fees for other governmental projects, Butler did not do so, reaping thousands in building permit and other fees from the big-ticket projects.

"We're just doing what we need to do," the mayor said. "Butler is in a remarkable situation."

The city is seeing overflow from the development boom in neighboring Cranberry.

It recently undertook a $150,000 federally funded streetscape project, which included new flower baskets, benches, flags, and lighting for the downtown area, and plans are underway for a main street makeover, designed to lure more commerce to the city, which lost 27 businesses over the past several years.

Some good signs

Washington residents and business owners are no strangers to the Main Street program, which received much criticism in recent years as a $17 million boondoggle that improved the look of the downtown area without drawing in new merchants. That has slowly begun to change in recent years as the art community, especially, has gained a foothold in the area.

Butler, and its relationship to booming Cranberry, may be a beacon of hope for Washington, when you consider a county seat's role in regional development. Interestingly, Butler and Washington were the only two counties in the state to see a population increase in the last census.

Development in Peters, North Strabane and South Strabane has been steady for the past several years and county commissioners last year touted Washington County as having the second highest rate of job creation in southwestern Pennsylvania, and the second lowest tax rate, behind Butler County.

Butler has an annual budget of $6.9 million and lives frugally, with a five-member street crew and three-member parks department. Those sponsoring events in the city must pay 25 percent of overtime costs for any group of employees -- such as police or street department -- that has to stay late for an event. The city is taxing residents as much as it legally can at 30 mills for real estate.

Washington posted a $9 million budget this year. It, too, has a five-member street crew, but that was reduced only in recent years from a one-time high of 15 employees. This year's budget includes a $2 million bond issue needed to pay bills in 2007 and an $800,000 tax anticipation note needed to help pay for some of this year's bills.

Tax increase last resort

"It's a big problem," said Mayor Anthony "Sonny" Spossey, a former mayor who re-took the seat in the November election from Mayor Kenneth Westcott, who had led the city's administration for eight years. "They've dug a real hole for us," Mr. Spossey said.

Washington also renegotiated contracts with its bargaining units, but was unable to secure pay freezes for one year, as Butler did. Instead, the contracts call for minimal raises and higher health insurance co-pays.

Several years ago, when Mr. Spossey was city treasurer, the city instituted an aggressive crackdown on delinquent taxes, resulting in a 97 to 99 percent collection rate today.

Washington reopened its budget in January and raised taxes on land, but not buildings. The city is anticipating the tax increase to generate about $1.1 million in revenue, which would cover the $900,000 shortfall and provide $200,000 in reserve funds.

After that, Mr. Spossey said, he expects balanced budgets.

The city's budgeting efforts so far this year have been flowing seamlessly with two new council members. Past political bickering held up financial decisions, bill paying and any real progress toward balancing a budget, the mayor said.

The city has not reached its maximum taxing level, and Mr. Spossey said he never intends to raise taxes that high. He's hoping that the city's brush with financial disaster will be just that -- only a glimpse into a dangerous abyss.

"We don't want to raise taxes," said Mr. Spossey. "We didn't want to raise them this year."

First Published: March 2, 2008, 5:00 a.m.

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