18 month extension available for City of New Castle

Earlier this year Governor Wolf signed Act 23 into law that allows Act 47 municipalities to extend their time in the program by 18 months. New Castle has the option to extend its Act 47 status by 18 months from August 2022 until February 2024.

The extension can impact New Castle in two practical ways.

#1: More EIT revenue to be used for operations in 2021

New Castle still needs to make progress toward exiting Act 47, but with the 18-month extension option, the City potentially has more time to eliminate the portion of the Act 47 EIT currently used for operations. The City could zero out the Act 47 EIT used for operations in 2022 instead of 2021, providing an additional $300,000 for the General Fund in 2021. This does not impact the Home rule process, which is separate.

Act 47 Stats

#2: Workforce allocation for 2023

The City’s current labor agreements with its four bargaining units run through the end of 2022 based on the maximum annual allocations for employee compensation set by the Exit Plan. With an 18-month extension, we would provide an additional year of workforce allocations that set the maximum amount the City would spend for each employee group in 2023, which means the City would have another year of labor contracts that are governed by the Exit Plan.

“Proceeding practically over the next four years is critical to ensuring our future community and economic success.” “With 21,797 residents quality of life in mind, it’s imperative that we accept this extension and continue in State oversight until City government is fully stabilized,” says Mayor Frye

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