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Borough budget includes series of tax hikes

October 31, 2006|by DON AINES

CHAMBERSBURG, Pa. - Borough real estate taxes could go up 10 mills between 2007 and 2010 under a budget recommendation that adds more police, firefighters, a new police headquarters and municipal pool renovations over the next four years.

"That's just for new things, not for old things," Borough Manager Eric Oyer said, warning the council Monday that tax increases beyond next year could be higher.

Oyer recommended the borough add 3 mills both in 2007 and 2008 and 2 mills each in 2009 and 2010 in the "game plan" he outlined. The 2007 tax increase, if approved, would be the first since 2004, and would increase property taxes to 20 mills.

On a property with a market value of $100,000, each mill would add about $10 to the owner's tax bill, Oyer said.

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Council President William McLaughlin said there are some variables in the 2007 budget, and they are not good ones.

The General Assembly is proposing broader income exemptions in the emergency municipal services tax that could cut the $900,000 the borough anticipates receiving. A disputed PJM Interconnection, a regional power transmission organization, could cost the borough $5 million more for electricity and raise rates for the 9,000 residential customers, he said.

At 37.7 percent of the general fund budget, the $3.95 million for the police department is the largest expenditure, Oyer said. Under the four-year scenario, the department would add two officers in 2007 and one in each of the following three years to raise department strength to 36 officers, as recommended by a police department study.

Three firefighters would be added in 2007 and three more in 2009, raising the number of paid personnel to 24, excluding an emergency services chief and assistant chief, Oyer said. The proposed budget increases spending for the fire and ambulance service to about $2.77 million, or 26.5 percent of the general fund.

More police officers could mean a new police headquarters, possibly at the former Stevens Elementary School building at the intersection of South Main and South streets, now owned by the Chambersburg Area School District, Oyer said.

Renovating the municipal pool, at an estimated $2.5 million, "is something that has to be done," Oyer said. Paying for debt service on the pool and police department projects and borough hall renovations is figured into the possible tax increases for 2008 and 2010, he said.

The borough is projecting revenues of $9.8 million next year, but expenditures would be $10.46 million. The deficit of almost $650,000 - the equivalent of about 4 mills in property taxes - would come from cash reserves, he said.

Without those reserves, taxpayers could be looking at a 7-mill increase, Oyer said. How much the borough will have in cash reserves to offset future deficits is unknown, he said.

"In three years, we could be reducing those departments to make a budget ... McLaughlin isn't crying wolf," McLaughlin said. Other cities are already laying off personnel, he said.

The total budget, which includes the borough's self-funding electric, gas, water and sewer utilities and sanitation department is about $58.7 million, down $1 million from this year, but that is due to reduced capital improvements, Oyer said.

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