The following is the opinion of Newtown Supervisor Dennis Fisher.
Newtown Township — one of the state’s and Bucks County’s most prosperous communities — is facing a difficult fiscal challenge, made worse by a loss of revenues caused by the COVID-19 pandemic. In short, preliminary findings of a long-range study of township finances funded in part by a state grant show that the township will soon face a choice of sharply cutting back services or increasing revenues.
According to ESI [consultants hired by the township], however, because of the pandemic, the township is facing a loss of almost $900,000 in expected revenues from all sources, including a potential 8% decline in our EIT collections [see insights] and cancelling Summer Camp. The board of supervisors has already taken steps to compensate for that loss through measures like postponing some planned capital expenditures…[Read “2020 Road Program Falls Victim to COVID-19”; https://www.johnmacknewtown.info/covidvroads.html]
There are a number of alternative ways to remedy this problem: cost containment …; adopting best management practices to achieve operational efficiencies in the township; seeking revenue enhancement; implementing long-term economic development; and pursuing inter-governmental cost-sharing strategies.
When it comes to the revenue enhancement, raising taxes is only one way. Others include bringing in new business that would result in greater Earned Income Tax (EIT) collections, increasing fees to do business in the township and seeking regional service agreements with our neighboring municipalities. To this end the BOS has reestablished an Economic Development Committee.
But township residents will need to answer the same question staring the board of supervisors in the face: what price are we willing to pay to keep Newtown Township a great and safe place to live, work and raise a family? The board will be spending the rest of this year trying to answer that question, in public meetings where we hope to hear from our friends, neighbors and the business community. You are invited to be active participants. The BOS, Finance Committee and Economic Development Committees are open to the public. Check the township website for dates, times and agendas.
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A Recommended Fix
Keep in mind that consultants hired by the township to solve this fiscal crisis, recommended a scenario that includes a 7.25 Millage increase in real estate taxes in 2021, which works out to be about $260 in additional taxes for the average homeowner – a 161% increase. That increase, BTW, is necessary – in part – to cover the added expense of hiring 10 NEW personnel as per the recommended scenario: an assistant township manager, code enforcement officer, 5 career firefighters, and one police officer plus an additional two police officers in 2022. Do we need to hire all these new personnel immediately? Are they the right resources we need now to “keep Newtown Township a great and safe place to live, work and raise a family?”
Read more in the September 2020 issue of Newtown News Update
Not included in the recommended consultant scenario is the hiring of any new staff for the Public Works Department, which was “critiqued” for the condition of Township roads and highways in the Citizen Survey (read “Newtown Residents Cite Need for Infrastructure Improvements”).
UPDATE on EIT
In April, 2020, the Board of Supervisors “re-allocated” the 1.0 mill real estate tax slated to be used to borrow money to repave more than 5 miles of roads in 2020 to cover General Fund expenses - a drastic move in anticipation of an Earned Income Tax (EIT) revenue shortfall of 8-11% due to the COVID-19 shutdown of local businesses. That shortfall, however, never materialized. According to Keystone Collections, which collects EIT, comparing earned income collections for 1/1/20 – 8/31/20 vs 1/1/19 – 8/31/19, Newtown Township specifically is up about $258,000.00 or 4.8%
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