Delco eyes possible tax decrease in next year
“It may seem early in the year since we finished the first quarter of the current year but budgeting and financial planning is really a yearround activity and we all did make the commitment last year ... to expand the opportunities for discussion and for engagement.”
— Delaware County Executive Director Howard Lazarus
Delaware County may be headed for a tax decrease next year — but at this point, it’s too uncertain for county council to tell as the revenues and expenditures aren’t clear.
Last week, county Executive Director Howard Lazarus gave a budget presentation focusing on the county’s fiscal situation through the end of March. The county budget cycle runs from January through December. This is the first time a budget presentation was offered in the spring; usually, a presentation is given in December prior to the adoption of the following year’s budget.
The presentation is available on the county website at www. delcopa.gov/council/calendar. html.
“It may seem early in the year since we finished the first quarter of the current year but budgeting and financial planning is really a year-round activity and we all did make the commitment last year ... to expand the opportunities for discussion and for engagement,” Lazarus said.
The executive director noted that 40 percent of the county’s revenues and 12 percent of its expenditures had been recorded and added that normally, at this time of year, 80 percent of the revenues have been received.
County Councilwoman Elaine Paul Schaefer pointed out that the revenues reflected $35 million behind 2020’s yearto-date and $40 million behind 2019’s year-to-date.
“That’s a pretty big variance,” she said, “and I find it hard to believe that it’s collections.”
The real estate tax discount period closes at the end of March, with the regular deadline in June and the penalty phase following that.
County Chief Financial Officer Drae M. McCombs said there was a processing issue in the Treasury Department in that posting data wasn’t occurring in a timely manner. Lazarus noted that while the goal is to have the reporting no later than two business days’ behind, he said the process has well improved over the four months’ lag last year.
She added that more certain numbers would be available at the end of June.
However, some council members said once the finances are clearer, there could be tax benefits for the residents.
“Once I get my hands around this and we all get our hands around this, we may find that we may actually be able to give a tax decrease and still make all the investments that are necessary,” county Council Chairman Brian Zidek said, noting the county has until 2024 to use its $110 million American Rescue Plan allocation. “We may find that we have the ability to make all the investments, do all the programming that we want, put the county in a firm financial footing and offer our residents a tax break.”
The presentation also looked forward into where county council would want to direct funding in 2022 and on that list were opening the county Health Department in January 2022 and deprivatizing the prison in March 2022.
Schaefer said it’s important to include pandemic recovery as a part of that package.
“Over the next two to three years, we’re going to have to make decisions and do things that we totally would not normally do because we are recovering from a pandemic and the economic impact of that,” she said.
Among one of Lazarus’ recommendations was increasing the hotel tax from 3 percent to the allowed maximum of 5 percent, a move in line with other surrounding counties.
Council Vice Chairman Dr. Monica Taylor cautioned that, saying that industry has been hard hit during the pandemic. “Now might be a little difficult for them,” she said.
As the county moves to grow its salaries and find efficiencies in its benefits plan, Lazarus said that Delaware County had already saved $1.8 million in its prescription medical care.
Some items he identified as driving the 2022 budget included the creation of a Department of Elections, which would be a consolidation of the Voter Registration, Bureau of Elections and Voting Machines offices.
He earmarked an additional $1.3 million and $1.5 million for operating costs for the Medical Examiner’s Office, which is also on schedule to have a new complex designed and constructed next year.
The issue of funding the Fair Acres Geriatric Center arose as the facility has been having sicker, more age- and sickness-progression in clients coming, but fewer of them as more of an emphasis is placed on aging-inplace, Councilwoman Christine Reuther said.
Schaefer also spoke of the need to invest in open space and trails; to revisit and revamp the county’s approach to economic development; and to properly staff an understaffed Parks Department.
While the guidance directing counties and municipalities on how to use the American Rescue Plan funding, council theorized how they could potentially use it, including funding parts of the Health Department, putting it towards the new Medical Examiner complex, supporting businesses and finding ways to help unemployed people re-enter the workforce, resource recovery and technological access.
Zidek said the money could also be used to find alternative ways to get rid of the county’s waste rather than send it to Chester to be incinerated.
And, he also suggested that it could be used to fund investments needed at DELCORA. Zidek noted that DELCORA had been doing fine before they considered a sale offer from Aqua. However, he said these federal funds could help pay for future infrastructure needs without having to increase rates, something he said Aqua would have to do to recoup their costs.
In January, Administrative Law Judges Angela T. Jones and F. Joseph Brady recommended that the Pennsylvania Public Utility Commission reject the sale of the Delaware County Regional Water Quality Control Authority to Aqua Pennsylvania Wastewater Inc. for $276.5 million. In September 2019, DELCORA and Aqua agreed to merge with proceeds paying off outstanding debt and to create a rate stabilization fund that would increase rates at 3 percent annually for a decade.
In January 2020, under a new all-Democratic leadership, county council moved to terminate the authority and reverse one of DELCORA’s articles that allowed the creation of the trust. The matter now resides in the legal system.