Borough officials review proposed budget

SOUDERTON » Even though there won’t be a tax rate increase, the amount of income from borough property taxes is expected to increase next year, Borough Manager Mike Coll said while reviewing the proposed budget at Souderton Borough Council’s Oct. 30 budget work session meeting.

“The budget reflects some growth in our total assessed valuation because of new housing that’s coming online,” Coll said. “That naturally will give us a little bump in tax revenue.”

This year’s budgeted $1,381,500 of property tax income is being increased to $1,393,350 in next year’s proposed budget.

Real estate transfer taxes are also projected to increase.

“I do expect that the housing market will stay strong with both sales of new construction in 2018, as well as resales,” Coll said.

“The resale market is pretty strong in the borough. Houses are turning over pretty quickly,” he said. “Every time there’s a sale, there’s revenue that comes back to the borough.”

The earned income tax, paid by residents on the amount of wages they earn, is also being projected to increase, he said. This year, it was budgeted to bring in $835,000. Next year’s proposed budget puts that number at $850,000.

“It’s a little heavier than our 2017 budget, but, believe it or not, it’s actually a little bit less than what we actually realized in 2016,” Coll said.

In 2016, the borough received $855,443 from the earned income tax.

The local services tax, paid by persons working in the borough, isn’t being increased, though, in the budget. It remains at $90,000, the same amount as budgeted this year.

“We seem to be lagging a little bit behind this year,” Coll said.

“What would grow local services taxes is job growth,” he said, “and I really don’t see a lot of new commercial coming onboard in the borough.”

The proposed budget, which includes an almost $3.6 million general fund, will be officially presented at council’s Nov. 6 meeting, with a final vote set for Dec. 4.

General fund expenses in the proposed budget include $415,299 for legislative matters, most of which is for the borough office; $69,300 for government buildings and plant; $1,052,171 for the police department; $451,475 for trash and recyclables collection; and $604,142 for highway maintenance.

The budget does not include any additional debt, Coll said. It does include $370,805 for debt service on existing loans.

“There is no money taken

from reserves to balance the budget, so it’s truly a balanced general fund budget,” Coll said.

Salaries for full-time borough employees increase by 2 percent in the proposed budget, according to borough information.

The cost of health insurance will increase by 11 percent. Capital reserve fund spending in next year’s proposed budget includes $65,500 for new playground equipment and stormwater control improvements in Souderton Community Park.

The property tax rate is proposed to remain at 5.51 mills, equaling $826.50 on a home assessed at $150,000. Each mill equals $1 of tax per $1,000 of assessed property value.

The 5.51 mills includes 5 mills for the general fund, 0.21 mills for the fire prevention fund and 0.3 mills for the library tax.