In October, before the law was passed, Borough Manager Eric Oyer recommended a 2 mill property tax increase to help balance the $9.1 million general fund, of which about two-thirds goes to police, fire and ambulance and streets. As a result of the new tax, which Council President William McLaughlin said will raise about $847,000, real estate taxes will remain at 17 mills, or $17 for every $1,000 in assessed value on a property.
The 2 mill tax increase would have generated about $303,000 in revenues, according to borough figures.
Oyer said the new tax also means the borough will only use about $60,000 in cash reserves to balance the general fund, instead of the $480,000 proposed in the preliminary budget.
"Without the full implementation of the EMST, property tax increases would have become routine in the future," McLaughlin said. Even with the new tax, he said, a few years of health-care premium increases such as the 18 percent more the borough will pay in 2005 "will fully absorb the potential revenue generated" by the new tax.
At about $1.8 million, health care is the borough's third-largest general fund expenditure behind police and fire and ambulance services, according to Oyer.
McLaughlin said the borough cannot rely on property taxes to pay the increasing costs of services. Because of successful assessment appeals, he said the growth in property tax revenues has averaged about 1 percent a year, despite $350 million in construction since 1990.
"It's a big increase ... but consider the fact that it hasn't been increased in 39 years," Councilman Ken Gill said.
The vote was unanimous for both the new tax and the budget, although Councilwoman Sharon Bigler called an exemption for those making less than $5,200 a year "a joke." The law allows exemptions of up to $12,000 in income.
Only one borough resident spoke about the tax and Wade Burkholder said he considered it fair because so many of those who work in the borough and benefit from its services live in townships that do not have either property or occupational taxes.
Oyer said approximately 18,000 of the 22,000 people who work in the borough live outside its boundaries.
Employers will have the option of deducting the tax from employees' paychecks over one to four pay periods, Oyer said.
The council also approved the first increases in trash collection fees since 1993. The household rate will increase from $8.50 to $11.50 a month and commercial rates are also going up.