Newtown Township Seeks Grant to Assess Finances

Claiming “stresses” on finances, Newtown Township has applied for a matching $40,000 PA Department of Community and Economic Development (DCED) grant to implement an Early Intervention Program (EIP) that will assess the township’s financial condition and identify additional sources of income.

[Listen to this podcast: “About DCED's Early Intervention Program”]

If the township is awarded the grant, it would have to match it by providing up to $40,000. The grant would be used to hire a consultant to develop a “multi-year trend analysis of historic financial data” and to perform an “assessment of current budget performance.” A secondary, but an “extremely important objective,” is to identify additional sources of revenue for the township.

On the Expense Side

The grant application, which was filed on March 15, 2019, states that the township will need additional capital resources to “address fire protection and emergency response needs.”

A Fire and Emergency Services Study commissioned by the Township recommended developing plans for a new fire station in the area of Sycamore Street as well as the purchase of several vehicles including a “75-foot quintuple pumper/aerial Unit” to replace engine 55-1, which has over 110,000 miles on it. In addition, the report recommends that career firefighter staffing hours be expanded to a seven day a week schedule and that the township create a fund that allows for sufficient financial support for an ongoing departmental maintenance program.

The grant application also mentioned that by 2020, the tax millage dedicated for loan repayment for the construction of the township building will no longer meet mandatory increased yearly payment amounts.

On the Revenue Side

The application points to the township’s “heavy” reliance on the Earned Income Tax (EIT), which is a 1% tax imposed on residents and nonresidents who work in the township. In 2017, the EIT accounted for nearly 80% of the township’s tax revenue.

Aside from the impact of general economic conditions, the Township’s EIT revenue was described as "volatile" by the township's previous manager because it can be impacted by businesses moving out of town and by decisions of neighboring towns to implement an EIT to support their own budgets. [For more on that, read “Earned Income Tax Trends”]

If the grant is awarded, the township expects the hired consultant to make recommendations to the township regarding:

1. Possible changes to the operation of the township
2. Proposals regarding establishing a multi-year budgetary process.
3. Identification of additional sources revenue, including possible sources of economic development within the township.