Bethlehem passes budget, boosting money for police, but also hiking taxes to help deal with the pandemic
In a nearly unanimous vote, Bethlehem City Council on Tuesday passed an $84.7 million budget for 2021 that includes a 5% hike in property taxes.
Mayor Robert Donchez said in his budget message this month that a tax increase is needed because of lost revenue from the pandemic and steep rises in pension obligations.
Council approved the budget 6-1. Bryan Callahan was the lone dissenter.
Under the spending plan, millage rates for properties in Lehigh County will go from 5.76 to 6.05 mills, and in Northampton County from 18.22 to 19.14 mills.
The tax increase would raise taxes by about $46 for a home assessed at $50,000, Donchez said.
Callahan’s vote stems from the added cost of two housing inspectors that had been paid for by Lehigh University and a new stormwater collection and management user fee.
“I’m voting no because the city is picking up the $100,000 inspection expense,” Callahan said.
Callahan also didn’t like the stormwater fee, calling it “a tax on rainwater.”
“We can’t keep adding fees and taxes … and I promise you that this time next year we will be looking for a tax hike for the same amount,” he said.
Councilmen J. William Reynolds and Michael Colon said the tax hike still keeps the city at a lower rate than similar-sized neighboring municipalities and at the same time on a sound fiscal footing.
“All of us have something in the budget we don’t like, but if we voted against it [based on one dislike], we wouldn’t have a budget,” Reynolds said.
Regarding the inspectors, Council President Adam Waldron said the university decided to no longer cover the cost of two contracted housing inspectors whoworkedprimarily on South Side.
However, he said there is still need for health and safety inspections, which will continue, and that the two inspectors would not be entirely focused on South Side homes.
While the stormwater fee is not a state mandate, state regulations call on municipalities to remedy stormwater issues, including making provisions to prevent flooding and insuring water runoff is not contaminated.
The money would go toward upgrading, repairing and maintaining the city stormwater
system.
City Finance Director Mark Sivak said the fee for a single family residence is $60 per year, more for businesses and multifamily dwellings. The fee will be an itemized addition to sewer and water bills and be billed quarterly.
The fee, set to start Jan.1, was to begin July 1 this year but was canceled to offer financial relief to residents. It is expected to generate about $3 million, according to the budget.
“Creating a user fee is hard to swallow,” Waldron said, but the city is experiencing larger costs in dealing with stormwater.
“And the only way to handle it is with a dedicated fee. The administration has made it [the fee] as fair as possible, but maybe we need make a few changes,” he said.
Council members Grace Campsie Smith and Olga Negron said they would like to see some way of making the fee more equitable or less of a hardship for low-income or people on fixed incomes.
The budget also includes increases for the police department, from $15.4 million in 2020 to $15.8 million; the fire department, from $9.2 million to $9.4 million; and emergency medical services, from $2.29 million to $2.47 million.
In his budget address, Donchez said this year “delivered a punch in the gut,” but the city came out of it on stable ground, ready to face next year’s challenges.
“Even under the best scenario, the impact of the pandemic will continue to be with us well into 2021,” he said.
The biggest factors affecting the budget are a projected $1 million loss in revenue from the pandemic and an increase of $1.1 million toward the city’s pension obligations.
That includes the police pension, which will increase by $900,000 to $7.2 million, and the fire pension, which will increase $200,000 to $4.4 million.
The city’s pension obligations will be $16.2 million in 2021, which represents 18.5% of the general fund budget.
By late summer, it was clear the pandemic would have a significant impact on next year’s budget, with initial projections calling for a $4.5 million deficit.
Over the last several months, city officials narrowed the deficit to $2 million, which would be plugged with a tax increase and $1 million from the city’s cash reserves.
To cut expenses, the city is expected to eliminate six positions next year though attrition.