No Lackawanna County Tax Hike — Because the Law Says So

After a massive 33% property tax increase last year, Lackawanna County residents are unlikely to see another one in 2026. Commissioners Bill Gaughan and Chris Chermak say the county’s next budget will hold the line on taxes while erasing a projected $5.4 million deficit.

But while Gaughan framed the announcement as a sign of fiscal discipline, the reality is more complicated. Under Pennsylvania law, counties cannot use a reassessment year to increase revenue. The county must adjust its millage rate downward so that total tax collections remain the same — even as property values rise.

That means the “no tax hike” headline was never really an option. Once the reassessment takes effect January 1, the county’s tax rate must be revenue-neutral. What happens after that is another story.

The restriction lifts the following year, allowing officials to raise taxes again if needed. Given the county’s long-term obligations — including an underfunded pension system, deferred capital projects, and lingering structural deficits — 2027 could bring a new round of difficult choices.

At a public presentation Monday, the county’s financial consultant, PFM Group, said the county’s financial condition is “better, but not fixed.” The tax hike last year and other cost-saving moves, including hiring freezes and health plan changes, helped cut the projected 2026 deficit from nearly $30 million to just over $5 million.

The county’s cash position has also improved, though much depends on the outcome of the ongoing state budget impasse in Harrisburg. A $5 million payment for human services remains frozen until a state budget is approved. If the impasse drags on, the county could face a $2.6 million year-end deficit instead of the projected $3.6 million surplus.

Gaughan insists last year’s unpopular tax increase was the right call, despite the pain felt by residents. “If we hadn’t acted, we’d be facing massive layoffs, service cuts, or worse — insolvency,” he said.

Still, the law-driven “no tax hike” of 2026 may offer only temporary comfort. Once the reassessment year passes, the county will again have full authority to adjust taxes. For taxpayers already rattled by rising home values, the real question isn’t about 2026 — it’s about what happens next.