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Chambersburg borough taxpayers get first tax hike since 1990

December 10, 2003|by DON AINES

chambersburg@herald-mail.com

CHAMBERSBURG, Pa. - Borough property owners will see their first tax increase since 1990 after the Chambersburg Borough Council Tuesday voted to give final approval to its 2004 budget.

Real estate taxes will increase 4.8 mills to 17 mills next year, according to Borough Manager Eric Oyer. "It's necessary in order to provide the services we are providing," Oyer told the council, which voted unanimously for the package.

The tax increase will generate an estimated $720,000 in new revenues to almost $2.5 million, according to budget figures.

"It truly is remarkable that we went 15 years without a tax increase," Councilman John Redding said when he introduced a motion to approve the $48.2 million budget.

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General fund revenues, including transfers from other borough funds, have grown 11.3 percent over the past four years, while expenditures have risen 36.7 percent, according to the budget document.

In recent years the borough has relied on cash reserves to balance the budget. When the preliminary budget was unveiled on Oct. 28, Oyer said about $950,000 in cash reserves were used to balance the 2003 budget.

The new budget will still require several hundred thousand dollars from cash reserves to balance revenues and expenditures in the $8.2 million general fund, according to a budget summary. Without the increase, the revenue shortfall would have been an estimated $1.25 million, the summary states.

Also going up in 2004 are sewer rates. The council approved a 15 percent rate hike to take effect at the beginning of the year, following a 10 percent increase this year.

One factor in the increase was the lost of an annual state subsidy of about $160,000 a year for the sewer system, about 5 percent of the system's budget, Oyer said. The subsidy for municipal sewer systems was ended by the state in a budget-cutting move last summer.

The bulk of the borough's budget outside the general fund is revenues and expenditures for the town's sewer, water, gas and electric utilities.

As with most other municipalities, the borough saw a large increase in health-care costs, which now exceed the approximately $1.3 million it spends on the fire department, Oyer noted last month.

The police department is the largest expenditure for the borough, budgeted at nearly $2.9 million in 2004. The recreation department is budgeted at $913,000, the highway department at $865,000 and the ambulance service at about $690,000.

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