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41 BUSINESSES PLANNING TO WITHHOLD TAXES; REVOLT AIMS TO FORCE LACKAWANNA INTO BANKRUPTCY, PROMPT STATE TAKEOVER

Forty-one Lackawanna business people pledged Tuesday to join a tax revolt by withholding payment of their city property taxes.

The protest, designed to bring the city to its financial knees and force decreases in spending and taxes, is sponsored by the Southtowns Business Association.

Donald A. Doino, president of the group, acknowledged the campaign will have to attract far more supporters to be effective. Most of the businesses taking the pledge are small ones, he said.

A general meeting of the association and the Lackawanna Area Chamber of Commerce will be scheduled, probably during the third week of July, and all interested residents will be invited.

Businesses, facing a nearly 70 percent increase in city taxes this year, "have nothing left to lose," said Doino, a funeral home operator who pledged to withhold his taxes.

The plan aims to force the city into bankruptcy. The state then would appoint a control board to run the city and institute fiscal reform, Doino said.

Those who withhold taxes will be charged a 1 percent penalty per month and face eventual foreclosure proceedings, Doino pointed out. But foreclosure can take several years, and those pressing for the revolt hope things will change by then, he said.

About 70 persons attended the meeting Tuesday in Ilio DiPaolo's restaurant in Blasdell.

While no one at the meeting was happy with the situation, some were plainly uncomfortable with the idea of withholding taxes.

Thomas Ciesla, president of the Chamber of Commerce, said after the meeting he, too, wants "to get the city's attention" but said forcing it into bankruptcy isn't the answer.

Gerald S. DePasquale, a director of the Ridgewood Village Co-op and city clerk, stormed out of the session. "I see a lot of hypocrisy here," he said, pointing to residents who didn't attend City Council or School Board meetings on spending but now want to withhold taxes.

Contacted Tuesday afternoon, City Finance Director Robert T. Dombrowski said withholding taxes on 41 of the more than 4,000 parcels of property in the city hardly would be noticed.

But it would be counterproductive, he said, because it would force the city to borrow money and use tax revenue to pay interest charges to a bank rather than paying employees.

"If we can't pick up garbage or plow the streets or have to lay off the Fire Department, who does it hurt?" Dombrowski added.

During the meeting, businessmen said that doing business in the city is becoming increasingly difficult.

A business assessed at $100,000 pays about $9,800 a year in total property taxes in Lackawanna, compared with $3,200 in Hamburg, said Jim Crean, a restaurant owner.

Jack Giardina, another restaurant owner, said city officials have to realize "the cow down Ridge Road (Bethlehem Steel) is no longer there to be milked" and that remaining businesses "aren't cows."

Mike Radominski, a tow-truck operator, suggested eliminating three of the five Council members rather than laying off firefighters and police officers.

Norm Smolinski, chairman of the association's tax withholding committee and owner of Norcraft Tool & Die, said several lawyers have told him withholding taxes would not be illegal.

People with mortgages would default, however, without first making arrangements with the lending institution, he pointed out.

Third Ward Councilman Leonard A. Woyshner, the only elected city official at the meeting, said afterward that he supports reduced spending, but, as a city official, he would not participate in the tax revolt, nor would he advise others to.

City officials, meanwhile, have calculated what tax rates would be if Mayor Thomas Radich's vetoes of last week are sustained.

The homestead rate would remain at $14.62 per $1,000 of assessed valuation.

The non-homestead rate would jump by $14.84, from $21.41 to $36.25 per $1,000.

Preliminary estimates last week placed the rates slightly higher.

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