The first draft of the borough’s 2021 budget is calling for a four mill tax increase, part of which is needed to shore up a deficit mostly created by the pandemic. Borough manager Paula Johnson delivered the budget update during council’s Sept. 15th Zoom meeting.
Johnson said revenue is down across the board from real estate transfer taxes, fines and violations, special police services, building permit fees and contributions from private sectors.
To make up the deficit and to build up the borough’s capital reserve fund, Johnson is recommending four additional mills for 2021, with two mills going to the general fund, which supports day-to-day operations, including the purchase of a new police car, repairs to the roof of the annex building, and general borough hall maintenance, and two mills allocated to its capital reserve fund for future projects, including sidewalks and other major projects.
That would mean a resident with a property assessed at the borough’s average of $26,800 would see their taxes increase by $107, from $662.76 to $769.96.
Council President David Bria thanked Johnson and the administration for the work they put into the document. “It is certainly not fun to be the one who has to come to council and say we need more money.” Councilman Uri Feiner said “Nobody wants to pay more taxes,” Feiner added. “We don’t want to be up here suggesting it. But we have to be reasonable people,” he said.
Councilman John McCann said he’d rather borrow money than raise taxes in the midst of a global pandemic when some households are struggling.
“For me, personally, I would rather draw from the line of credit for these items,” said McCann referring to a $500,000 line of credit pre-approved for the borough through the First National Bank of Newtown.
“Money is cheap. Interest rates are really low. This is the time that you draw money and not raise taxes,” he said. “I would lean more toward using that line of credit for these capital projects. And then look to a tax increase after the pandemic is over and we’re on surer footing.”
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There's a lot of pressure on Supervisors to keep #NewtownPA taxes low. Even with a 3 mil increase as proposed by this budget, our municipal tax millage rate is still lower than most neighboring towns and boroughs.
The new taxes are to cover fire services and for a loan to upgrade street lights to LEDs and for a pedestrian safety project on Newtown-Yardley Rd.
Of course, there will be pressure to lower the increase in propose taxes and my fear is that the debt service tax will be top of the list to eliminate. This, in my opinion, would be a mistake. Brighter LED lights not only save money, they can be adjusted to be brighter, which is a crime deterrent where needed. And the pedestrian safety initiative can save lives.