FRANKLIN COUNTY, Pa. — It's been the municipal budget season of doom and gloom.
"Good times are not here. The future does not look bright," Chambersburg Borough Council President William McLaughlin said last Monday.
About the time radio stations start playing Christmas carols each year, Pennsylvania's county commissioners, borough councils and boards of township supervisors start hammering out their annual budgets. This year's negotiations have brought some unprecedented hand-wringing.
McLaughlin's board is considering shrinking its police and fire forces to avoid a tax increase for 2012.
"I'm not comfortable raising taxes, and I'm not comfortable getting rid of firefighters. I didn't spend the past 365 days thinking that would ever happen," Chambersburg Borough Councilwoman Sharon Bigler said.
In the Borough of Waynesboro, council members are figuring out how to make loan payments associated with a $6.3 million stormwater system project.
"The economy is in a state of flux. ... I've lost more sleep on this budget than I have in others," Lloyd Hamberger, who has been Waynesboro's borough manager since 1980, said Nov. 17.
Municipalities can collect several types of taxes, but their elected officials have the most control over the rate of property or real estate taxes.
Pennsylvania property owners pay taxes based on the assessments of their land and buildings. Assessed value is different from appraised value.
For each "mill" of taxes being collected, a property owner pays $1 for each $1,000 of their assessment.
For instance, let's assume a hypothetical man, John Doe, has a Borough of Chambersburg house assessed at $15,000. That municipality's tax rate of 20 mills means his bill would be $300.
John Doe also would pay real estate taxes for county and library services in early 2012, then he would pay property taxes to his school district mid-year.
The county commissioners plan to hold the line on taxes for 2012, as do several municipalities, including Antrim and Washington townships, which are two of Franklin County's five largest municipalities based on population.
The Greencastle Borough Council is not planning for a tax increase, despite a 12.5 percent increase in health care costs.
"It's always too many requirements and not enough money," Borough Manager Kenneth Womack said.
Mercersburg Borough Manager Tammy Oberholzer said the Mercersburg Borough Council raised taxes half a mill for 2011; it is considering another half-mill increase for 2012. She said the council was taking those steps to pay its bills and avoid surprising taxpayers with a large increase in a few years.
"We did an exceptional job this year of keeping expenditures down," Oberholzer said.
What property owners need to be thinking about is how municipal budgeting woes foreshadow their school districts' budgeting, which is done on a July-to-June fiscal year. Those tax rates are markedly higher than municipal or county taxes.
School boards have cut programs and laid off employees in recent years. Faced with increased contributions to the state pension system and uncertain federal and state funding, similar choices could be made in 2012-13.
"I don't think it'll be any simpler than last year," said Steve Dart, business administrator for Chambersburg Area School District.
Dart's district experienced a $4 million drop in state revenue for 2011-12. While he doesn't expect reductions that drastic again, he said questions remain about actions from the Pennsylvania General Assembly, the governor, and even Congress, which distributes federal money for economically disadvantaged and special-education students.
Answers about funding won't be coming until late winter or early spring, so Dart plans to prepare early budget documents with uncertainties.
"I'd like to say we'll see an upturn in the economy, but we've been saying that for a couple years and it hasn't happened," Dart said.