Chester eyes 10% tax hike in proposed budget
CHESTER >> The city is on track to no longer be the lone municipal holdout with a separate real estate assessment ratio from the county’s, as city council moved through a series of financial ordinances this month. Council passed a preliminary 2020 budget of $55.7 million on its first reading Wednesday, marking the city’s third consecutive balanced budget.
The city held the line on most taxes – including the business tax reductions implemented last year – with an exception of a 10 percent increase in real estate millage. Should the ordinance pass on its second reading, it will be the first real estate tax increase in roughly 25 years. A public hearing and final action on the 2020 budget is set for council’s regular meeting at 10 a.m. Dec. 18.
Council passed an ordinance on its second and final reading Nov. 13 moving the city’s tax reassessment period from triennial to annual and its real estate assessment ratio to be in line with the county’s. The ordinance states “Effective Jan.
1, 2021, and each year thereafter the assessed value of all real property located in the city of Chester shall be the value as determined by the Delaware County Board of Assessment and Appeals.”
It instructs the city assessor that “on or before Sept. 1 of each year, the city assessor shall certify to city council the assessed value of all real property in the city of Chester as determined by” the county board. All appeals from real estate appraisals for tax assessment in
2021 and onward will now be filed with the county board.
The ordinance then states the subsection “Predetermined Ratio of Assessed Value to Market Value” is repealed from the city assessment code. This eliminates what city Chief Financial Officer Nafis Nichols called the “an old, old ratio” during a 2018 interview, assessing property at 25 percent of its market value. Nichols and other city officials were not available for comment Friday. Delaware County Common Level Ratio, set by the Pennsylvania Department of Revenue and used by its other municipalities for local taxes, is 58.1 percent of market value for 2019. It is set for 56.4 percent in 2020.
Council passed six ordinances relating to the preliminary 2020 budget on their first reading during Wednesday’s regular meeting along with a resolution to “authorize the proper city official to prepare specifications for the advertisement for Request for Proposals for the management of the city’s pension funds.” The resolution provided no further detail on the timeline or other parameters for the RFPs.
The tax ordinances will now head to their second and final reading vote during council’s quarterly evening meeting at 7 p.m. Wednesday, Dec. 11 before the final vote on the 2020 budget at 10 a.m. Dec. 18 meeting.
The city’s 2020 General Fund Budget is set for $55,712,914, up 2.3 percent from 2019. The balanced budget’s largest revenue sources are Act 511 taxes at $17.5 million, real estate taxes at $10.6 million and intergovernmental revenues at
$10 million. The largest general fund appropriations for
2020 are Department of Accounts & Finance at $22.3 million and Department of Public Affairs at $19.9 million.
In the first reading of tax ordinances, real estate taxes set for a 10 percent increase to 32.7712 mills from 29.792 mills – or $32.77 per $1,000 of assessed value – with the library tax staying flat at
1.5 mills. According to the Times’ archives, this marks the first real estate tax increase since 1996. Business privilege taxes are set to stay flat at 3.0 mills for retail businesses (reduced from
3.3 last year) and 2.0 mills for wholesale (reduced from 2.5 last year). Local services tax remains at $52 per year. Refuse collection fees for singlefamily homes and apartment single living units are slated for $175 per year, up 14.8 percent from $152.50.
The city’s residential earned income tax remains at 2.75 percent, one of the highest in the state. The non-resident earned income tax will stay at 2 percent. The tax was increased from
1 percent for the 2019 budget as a means to address the city’s police pension fund liability. Chester is currently working to exit its Financially Distressed Municipality status under Pa. Act 47 by 2021 or face state receivership. The city’s exit team recommended the non-residential EIT increase for the
2019 budget. The city is able to exceed the state cap of 1 percent on non-residential EIT under provisions of Act
47 and the state Municipal Pension Plan Funding Standard and Recovery Act with the stipulation that the difference be used solely to pay down the police pension fund liability.
The city held the line on most taxes – including the business tax reductions implemented last year – with an exception of a 10 percent increase in real estate millage.