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Chambersburg Council approves preliminary budget

October 26, 2004|by DON AINES

chambersburg@herald-mail.com

CHAMBERSBURG, Pa. - Two weeks earlier than scheduled and with few members of the public in attendance, the Chambersburg Borough Council on Monday unanimously approved a 2005 preliminary budget that includes a 2 mill increase in real estate taxes and the first increase in sanitation fees since 1992.

"Health care, as a category, is the third largest item in this budget" behind the police and fire departments, Council President William McLaughlin said. In the recommended budget presented last week, Borough Manager Eric Oyer said insurance premiums will go up 18 percent to $1.8 million.

A similar increase in 2005 and the cost of health care will exceed running the fire and ambulance service, McLaughlin said. "Our problems begin in earnest next year," he said.

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In addition to negligible growth in real estate tax revenues, McLaughlin said the borough is limited in its ability to transfer revenues from its electric and gas departments to balance the general fund budget. Approximately $1.1 million in funds from those departments are going into the general fund in 2005, but the money generated by those utilities has to be used primarily to maintain and improve those systems, he said.

McLaughlin said he has lobbied state officials to allow municipalities to generate income "that is not real estate-based and it has fallen on deaf ears." An example of that is a proposal to raise the occupational privilege tax from $10 to $52 a year, he said.

The tax is levied on people who work within a municipality, whether or not they live there, he said. The $10 tax was created in 1965, with half the revenue going to the school district, McLaughlin said.

The tax increase will generate about $303,000 in new revenues, Oyer told the council last week. Even with that, the borough will have to take $480,000 from its cash reserves to match the projected $9.1 million in general fund expenditures, he said.

Total spending next year, including the budgets for the water, gas, sewer, electric and sanitation departments, is estimated at $54.5 million in 2005, Oyer said last week.

Borough property owners saw the first increase in real estate taxes in 14 years in 2004 when taxes went up 4.8 mills to 17 mills. The proposed increase would raise taxes to 19 mills.

Oyer estimated last week that the proposed increase would add about $40 to the tax bill for the average homeowner.

Sanitation fees for trash and leaf collection, recycling and other services would go from $8.50 to $11.50 under the proposed budget.

Oyer said he did not recommend cutting any of the more than 180 personnel employed by the borough as a means of cutting expenditures. Personnel costs, including health care, pensions and other benefits, represent about two-thirds of general fund costs, he said.

A vote on the preliminary budget was scheduled for Monday, Nov. 8. McLaughlin said the date for final approval remains Monday, Dec. 13.

At the point of the meeting where the borough began what was listed as a budget discussion, only one or two members of the public were present and no one commented on the proposal. McLaughlin said members of the public still can address the council about the budget at meetings between now and its final passage.

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