Council Unanimously Adopts 9.5% Tax Hike

Arguably, the single most important thing local government does is pass a budget every year.

One year after raising considerable dust by hiking taxes by 12 percent, Pottstown Borough Council raised considerably less dust by hiking taxes another 9.5 percent.

No one showed up to complain.

In fact, hardly anyone on council said a word, with the exception of Councilman Joseph Kirkland.

Some readers may remember that last year, when the budget was passed by a 4-3 vote and the tax hike that loomed was above 18 percent, it was Kirkland who complained loudest that serious cost-cutting measures needed to be made.

He was the one who made the motion for a budget that raised taxes by 12 percent.

Because 2017 was a local election year, the borough code allowed the budget to be re-opened and changed in 2018 and Kirkland was appointed to head up an ad hoc commission to look for ways to cut costs and lower the tax hike.

But when the February deadline came around, the commission had no cuts, or savings to offer and the tax hike and budget remained intact.

Nevertheless, the ad hoc commission remained in place through out the year, so it could implement some of its ideas in time for the 2019 budget.

But it produced no savings that were ever presented to council.

If it produced anything and it was incorporated into the 2019 budget plan, it remained a secret. In fact, Kirkland reported last week the ad hoc committee did not even meet this month -- the month the budget is adopted.

It should be noted that the budget adopted last night calls for spending $49,986,179, which is $4.4 million less than the $54.4 million 2018 budget. That's some tricky math when you consider that Justin Keller said last week that while spending is down, it was a $1 million pension obligation and several tax refunds of several hundred thousand dollars which drove much of the tax hike.

But I'm not a financial consultant like E-Consult.

Speaking of E-Consult, the firm hired under the state's Early Intervention Program to do what borough officials apparently cannot -- keep taxes sustainable -- will not deliver its report or suggestions in time to change the tax hike just adopted.

And after a budget process, which included little public discussion of the staff's conclusion that all that could be done to keep taxes down had been done, it received unanimous support from council.

But not before Kirkland decided to lecture council that some difficult choices need to be made in the budget process, perhaps including staff cuts.

Too little too late Joe.

The 2019 budget sets a new tax millage is 12.675 mills.

For a property assessed at $85,000, it means an annual borough tax bill of $1,076.95, an increase of $92.65 over the 2018 tax bill of $984.30.

(Oh, and just in case your forgot, in October the Pottstown Borough Authority voted to raise water rates by 5 percent a year for the next three years. So in addition to the $92.65 more the average property will pay in property taxes in 2019, the average water user will pay an additional $26.88 in water costs, for a grand total of $119.53)

Here are the Tweets from the meeting:

Tax Hike Budget Sails Through

Pottstown 2019 Budget Draft Calls for 12% Tax Hike

Photos by Evan Brandt

The bottom line for the general fund, from last night's budget presentation.

So let's get right to the heart of the matter.

In it's first budget presentation of the season, the administration has dropped a $48.9 million draft budget proposal in front of borough council that, if adopted unchanged, would hike property taxes by just under 12 percent -- 11.97 percent for the sticklers out there.

This comes on top of the 12 percent tax hike adopted in December for the current year.

The primary culprits for this unpleasant state of affairs, according to Borough Manager Justin Keller are:

Flat spending thanks to cost savings.

• The $779,000 hike in pension obligations to both police and non-uniform plans; 
• the $1 million increase for post-retirement health care;
• The $360,000 the borough has to pay back to the owners of the moribund Pottstown Center shopping center at 799 State St. after the court decision on an assessment challenge;
• Contractual pay increases to the  borough police and employees;
• Not to mention the annual absence of $263,000 in tax revenue from Pottstown Hospital being off the tax rolls.

The removal of Pottstown Hospital from the tax rolls

last year only capped off a continuing trend.

Keller and Finance Director Janice Lee, under a heading they appropriately titled "Revenue
Headwinds," pointed out that since 2016, including what's proposed for 2019, spending has actually dropped.

But even though taxes have been raised, thanks to an unending stream of property value assessment losses, revenue has dropped faster.

Although the general fund holds the largest deficit, almost $700,000, there are also deficits in the parks and recreation fund ($114,246) and in the fire fund ($216,798).

Millage for the Parks and Recreation Department, which cares for 15 parks totalling approximately 100 acres at a cost of just under $1 million, has not been increased seven years.

Millage supporting the fire fund -- which covers the $275,000 payment made to each of the borough's

The bottom line.

four fire companies annually, as well as the $246,739 fire chief/fire marshal's office and functions -- has only been raised once since 2011.

In the meantime, fire calls since 2014 through 2017 are up 6 percent.

Taken together, the total budget deficit at this early stage stands at $1,029,674 according to the presentation.

To close it, the current recommendation calls for raising the total tax millage from the current rate of 11.58 to a 2019 rate of 12.966.

For a home assessed at $85,000, that translates into an annual tax hike of $117.79

Keller said although this preliminary news seems dire, "it's not all doom and gloom."

Overall, Pottstown property values are up 11 percent; properties for sale are spending less time on the market and the march of assessment challenges seems to be leveling off, with the results of challenging being not much less than the current assessment, making the challenge less attractive.

That said, here are the Tweets from the meeting:

Pottstown Facing 12% Tax Hike

No Pottstown Borough Tax Hike for 2016

Fuzzy Photo by Evan Brandt

A copy of the 1965 Pottstown Borough Budget taken from
the time capsule 

opened in September and now on display
in the lobby of borough hall.  

I didn't have the heart to
find out what the taxes were then.

Not that any of you think Pottstown's taxes are going back to what they were in 1965, but its nice to dream.

And after all, given that council adopted a 2016 budget last night, it seemed like a good time to reminisce.

But enough of that, to business I say!

It might have been a four-page agenda, but council made quick work of most of it, including a relatively painless decision on the budget.

When borough staff unveiled the proposed $57.3 million budget last week, it included the possibility of a 3.25 percent tax hike to close a $245,349 deficit between projected revenues and expenditures.

By Monday night, the estimate of that  deficit had dropped to $212,731.

Borough Manager Mark Flanders said the reduction was made "after we had our meeting with AFSCME (the borough's non-police workers are represented by the American Federation of State, County and Municipal Employees) and we felt confident in making some adjustments."

Closing that deficit entirely with a tax hike would have meant a 2.74 percent increase in the borough's millage.

Finance Director Janice Lee had also put together a sliding scale to allow council to choose from a menu of options between closing the gap with a tax hike or taking it from reserves.

• A 2 percent tax hike would have meant taking $25,000 out of reserves and an annual tax increase of $19.99 for a property assessed at $100,000.
• A 1.5 percent tax hike would have meant taking $98,000 out of reserves and an annual tax increase if $15.01 for a property assessed at $100,000, she said.



Don't forget, Borough Hall will be closed Wednesday.

• A 1 percent tax hike would have meant taking $137,000 out of reserves and an annual tax hike of $10.03 for a property assessed at $100,000.

But council wanted none of that.

With praise for the staff, and expressed confidence in their ability to find $212,731 in savings or additional revenue over the course of 2016, council voted unanimously for adopt the budget with no tax hike at all.

It will be the third budget in four years with no tax hike.

(BTW, if any of you are wondering why the budget amount seems so high, it's because for the first time this year, Lee also included the $6.2 million water and $9 million sewer budgets -- as well as the $9.5 million sewer capital budget and $5 million water capital budget -- into the total figure.)

An artist's rendering of what Fecera's will look like renovated.

Also of interest last night, council unanimously adopted the preliminary and final site plan approvals for the conversion of the former Fecera's furniture warehouse at Beech and North Evan's streets into apartments and a new home for ArtFusion 19464.

With that, I will let you loose on the Tweets from last night's meeting.