New Budget Reflects Tax Increase

From YourSITE.com

Daily News
New Budget Reflects Tax Increase
By Glenn McKay
Jan 26, 2006, 4:45am

Tax Increase Reduced by half to 1 mill

The Warrington Township Board of Supervisors, at its meeting on Tuesday, approved an amended 2006 Budget which included a 1 mill increase in real estate property tax and a proposed establishment of an Emergency Service Tax of $52 for employees working in the township.
In accordance with municipal law, the municipality, in even numbered years following municipal officials’ elections, has the option to reopen and change a budget previously approved before the start of the year.
The proposed amended budget advertised and available for public inspection at least 10 days prior to the meeting originally anticipated a tax increase of 2 mills.
The meeting evolved around considerable discussion between the Board and a full conference room of concerned residents. Chairman Glenn McKay initially explained to the audience the differences between the budget approved in December and the amended budget being considered that night. Two revenue items were adjusted downward by a total of $1,764,000 and expenditures were reduced by $380,000..
The first revenue item was the proposed sale of dirt for $750,000 which McKay said the Board felt there was no substantiated value for this line item. It was inappropriate and potentially illegal to include inaccurate items in a budget. It there was any value for the dirt, the Board would continue the process to evaluate its sale, but not as a budgetary item.
The second revenue item reduced was the proposed sale of township properties. Sale of one improved property was removed because its income was already reflected in a debt reduction line item elsewhere in budget, it presently provides better value to the township by retention and future use, and there was a concern for the impact on our bonds and credit rating with its sale. Another property was an improved gutted stone residence on County Line Road with only a verbal appraisal. There had been discussion of its land use within the Parks & Recreation program.
On the expenditure side of the budget, the proposed amendment cut $380,000, primarily in capital improvement items, which would be deferred until next year.
To create a balanced budget with these changes, building permit fees were increased by $250,000 and the real estate and EMST tax revenue items were added.
McKay further stated that the auditor strongly recommended that an ending balance in the budget be 5-10% of expenditures to maintain proper fiscal management. This was achieved.
The Board emphasized that remaining in the budget, even with the revenue cuts, were $525,000 of one-time revenues, not to be available to balance the budget in future years.
McKay admitted to the audience that because of the short deadline by law to amend this budget, the Board did not have the luxury to do long term financial analysis of the future impact on revenue from the continued growth. The Board’s goal is to establish a long term fiscal spending plan consistent with the proposed 10 year growth plan, on the docket for review and enactment this Spring.
Listening to the comments from the residents, many of whom volunteered to lend their assistance on a financial steering committee, the Board agreed to reduce the millage to 1 mill while replacing that revenue by adding back the gutted stone residence, based upon a required written appraisal to legally sell it.
The Board noted to the audience that this increased the one-time sales revenue for 2006 to approximately $775,000 which would have to be replaced by additional revenues or additional expenditure cuts in future years.
McKay summarized that the 1 mill real estate property tax increase represented $40/year on an average Warrington home with a $40,000 assessment. He further noted that the township property tax represents less than 5% of the total paid by the homeowner, the School District collecting 78% and County 17%.
He said the Board was very pleased by the volunteerism expressed by the residents, saying that there is an untapped wealth of expertise in its residents which the township would welcome.