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Chambersburg faces tax jump

October 11, 2000

Chambersburg faces tax jump



By DON AINES / Staff Writer, Chambersburg


CHAMBERSBURG, Pa. - For the first time in more than a decade, property owners in Chambersburg could be looking at a real estate tax increase in 2001.

Borough Manager Eric Oyer Wednesday unveiled a preliminary budget recommending an increase of .3 mills. Oyer said his best guess on the impact of the tax would be an increase of about $4.11 on the average property owner's bill. A mill equals $1 for every $1,000 of assessed value on a property.

Real estate taxes are a major source of revenue for the borough's general fund, projected at $6.6 million next year. Total receipts, however, are estimated at $4.5 million. Transferring funds from other accounts will raise that by $1.45 million to about $5.94 million, but cash reserves of about $700,000 will have to be used to balance the general fund.

"I think we're really pushing the envelope as far as transfers are concerned," Oyer told the Borough Council.

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The Borough's policy has been to maintain cash reserves equivalent to a minimum of 15 percent of the general fund budget, but he recommended the Council allow more flexibility in the future, suggesting a range of 10 to 15 percent.

The budget plan showed the Borough took $274,000 from cash reserves to balance the budget in 1998, a figure that has increased steadily each year.

All municipalities with real estate taxes in Franklin County will be figuring their real estate tax rates based on a new predetermined ratio approved by the Board of County Commissioners in July. The current rate for Chambersburg is 30.5 mills, based on the old ratio which taxed properties at 40 percent of their assessed value, based on the county's last reassessment in 1961.

The new ratio is 100 percent of that assessed value, but the change required municipalities to recalculate their tax rates. In Chambersburg's case, the new mill rate would be 12.2 mills and the tax increase would raise that to 12.5 mills, according to Oyer.

Under the existing ratio, the tax increase would be the equivalent of three-quarters of a mill and generate about $42,000 in revenues, Oyer said.

Personnel costs account for 70 percent of the expenditures in the 2001 budget. The number of authorized positions would increase by eight to 186 with AFSCME and non-union employees getting 3.5 percent raises.

Firefighters would receive a 3 percent increase in pay, but the budget document said only a "guesstimate" on police salary increases can be made because that issue is being decided in arbitration. Oyer said the impact of arbitration on the budget could be significant because salary hikes will be retroactive to Jan. 1, 2000.

Health insurance premiums will also be going up 30 percent to $1 million, Oyer said.

The largest part of the general fund is the police department budget, projected to increase 3.3 percent to $2.3 million. The fire and ambulance budget for 2001 is up 5.2 percent to $1.7 million.

Highway, traffic and street lighting is budgeted for $950,000 and the Recreation Department for $700,000. Planning, zoning and code enforcement will get $323,000.

The total budget is $35.65 million, which is down from the 2000 budget of $38 million. The total budget, which includes the operating budgets for the sewer, water, electric and gas departments, was $40.6 million in 1999.

Oyer said the budget has been going down because of decreased capital expenditures. Over the past few years, the Borough has spent several million dollars on its share of a wastewater treatment plant that also serves Guilford Township.

A water rate hike, the first in nine years, is likely in 2001 because of an extensive upgrade in the water system, Oyer said.

Preliminary adoption of the budget is scheduled for Wednesday, Nov. 8, with final adoption on Wednesday, Dec. 13.

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