Like many municipalities in Bucks County, Newtown Township is struggling to maintain its current finances. In 2018, the general fund balance decreased by more than $665,000.
Being blamed for part of downward trend is the loss of Earned Income Taxes as surrounding towns such as Bensalem and Middletown have enacted EITs of their own.
Real estate transfer taxes have also decreased in 2019. Factors affecting the volatile housing market include diminishing supply, rising costs, interest rates and demand. The township has reduced the budgeted figure for transfer taxes for the second consecutive year, this time from $800,000 to $750,000.
Where Newtown really runs into a budget shortfall is debt service. A 2020 municipal bond that was refinanced at TD Bank has allowed township officials to make payments to debt service without contemplating a tax increase.
In his presentation of the 2020 budget to the supervisors on Oct. 14, Township Manager Micah Lewis announced that the township’s current millage rate doesn’t cover the cost of future payments it has to make to its debt. The current fund balance will carry debt service payments through 2020. After that, Lewis said, the fund will fall short by more than $100,000.
Lewis reported that the township has significantly scaled back expenditures in its 2020 budget in order to offset projected shortfalls. He is recommending that future budgets contain revenue increases to support the diminishing general fund and offset the volatility of the current funding structure.
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