Budget predicts tax hike
POTTSTOWN >> In its first budget presentation of the season, the administration 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:
• 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.
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 totaling 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 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-andgloom.”
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.
These figures are likely to change as council moves closer to budget adoption in December and as factors affecting the budget are made more precise.
This article first appeared as a post in The Digital Notebook blog.
This graph from Oct. 3’s presentation shows increased spending in Pottstown’s general fund.