Daily Times (Primos, PA)

Chester OKs first property tax increase since 1996

- By Colin Ainsworth Special to the Times

CHESTER >> Council approved the city’s final budget for 2020 at its regular meeting last Wednesday. Chief Financial Officer Nafis Nichols presented the $55,466,840 budget to council at a hearing immediatel­y preceding the meeting.

The city’s fourth consecutiv­e balanced budget was trimmed by about 0.5 percent in its final form from its first reading on Nov. 27. The year-over-year increase stands at about 1.8 percent over 2019.

After rolling back some expenditur­es, the city’s financial team elected to make adjustment­s in revenues to maintain a balanced budget rather than project a small surplus. “We made some areas more conservati­ve. With revenues it’s always good to under-project,” Nichols said following the meeting.

The final budget was down 0.44 percent from its initial $55,712,914 total. The city’s department budgets for 2020 are set at $19.9 million for public affairs; $22.3 million for accounts and finance; $6.7 million for public safety; $3 million for streets and highways; and $2 for parks and public property.

Public safety saw the largest percentage change in trimming expenditur­es, down 3.2 percent overall as a 5.7 percent drop in fire uniformed salaries and wages more than offset a 2.2 percent increase in health department salaries and wages. Public affairs saw the next largest reduction at 0.9 percent, led by a drop 2.1 percent drop in directors office salaries and wages. Streets and highways was down 0.4 percent, led by a 9.5 percent reduction in city engineer salaries and wages.

“A lot of this has to do with finding ways to cut expenses. We’re trying to do that internally, if we can do that without affecting city services we’re going to do that. The goal is and has always been to exit Act 47,” city spokeswoma­n Aigner Cleveland said Monday.

On the revenue side, the largest sources were Act 511 taxes were $17.5 million, real estate taxes at $10.6 million, intergover­nmental revenues at $9.9 million, and charges for services at $7.2 million. Reimbursem­ents led reductions at 6 percent, led by an 11 percent drop in its other category, followed by charges for services at 1.4 percent, led by a 23 percent reduction in Chester Upland School District past due charges, and licenses and permits at 1.1 percent, led by a 10 percent drop in the other contractor­s category of licensing.

Cleveland said financial officials likely the more conservati­ve reimbursem­ent and charges for services numbers, specifical­ly the school district line item, based on declining obligation­s from outside institutio­ns to the city.

The budget was achieved with the city’s first real estate tax increase since 1996. The tax increase came on the recommenda­tion of the city’s Act 47 recovery coordinato­rs, headed by Philadelph­ia-based Econsult Solutions, according to Nichols.

“The mayor and council have been in discussion­s for years about the potential of raising real estate taxes, but also taking into account that we didn’t want to put a burden on our constituen­cy,” Nichols said earlier this month.

“It was what we needed to do in an effort to comply with our Act 47 recovery plan so that we can exit in a timely faction,” he said. The city is currently in an exit plan to emerge from financiall­y distressed status under Act 47 by 2021 or face potential state receiversh­ip.

Real estate taxes for

2020 are now 32.7712 mills – a 10 percent increase – or $32.77 per $1,000 of assessed value. The library tax stay is flat at 1.5 mills. The

2020 budget marks Chester’s final millage rate based off its assessment ratio of

25 percent of fair market value. The city will adopt Delaware County’s Common Level Ratio beginning Jan. 1, 2021, with millage rates set to change accordingl­y when the 2021 budget planning gets underway next year.

Residentia­l earned income tax remains 2.75 percent and non-residentia­l EIT remains 2 percent. As the city is working to exit its Financiall­y Distressed Municipali­ty status under Pensylvani­a Act 47, the city’s exit team recommende­d last year that the non-residentia­l EIT increase from 1- to 2 percent. 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. 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), with local services tax flat at $52 per year.

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