Newtown Township property owners could be facing much bigger tax bills if recommendations from a consultant are adopted by the township supervisors.
A final report from Econsult Solutions Inc. that lays out a five-year financial plan for the township recommends a property tax hike of between 5.75 and 9 mills, depending on what other measures are taken to increase revenue and create more financial efficiency.
That's an increase of between $215 and $310 in annual taxes for a real estate owner with a property assessed at the township average of $37,459. The increase would be applied to the township's general fund now funded strictly [mostly] with an earned income tax. Newtown Township's current total real estate tax millage of 4.5 is among the lowest in Bucks County.
Citing the economic impacts of the coronavirus pandemic, some residents urged against any tax increase in emailed comments read during the meeting where the supervisors voted to accept the consultant's final report.
"Given our job losses, the last thing we need is a tax increase," one resident wrote.
"Raising our real estate taxes is totally unacceptable," another stated.
Econsult's other recommendations include hiring 10 more employees over the next five years, including an assistant township manager, full-time code enforcement manager, three new police officers and five new paid firefighters.
The supervisors will consider the recommendations as part of their work on the 2021 budget that will start soon, but are not obligated to implement any of them.
Newtown Township's savings account will be gone by the end of 2021 if there is no significant hike in property taxes, the report projected. This year's $13.1 million township budget has projected revenue of $12 million and uses $1.05 million of the $2.37 million fund balance, or savings account, to balance revenue and expenses. That will leave a projected $1.3 million in the savings account at the end of the year.
Among other advantages, the property tax increase will bolster revenue in the general fund and help make sure the township maintains a fund balance of at least 10% of annual expenses, Econsult official Steve Wray said during the recent supervisors' meeting where the final report was accepted.
Reached after the meeting, supervisor John Mack said he would be wary of hiring five more paid firefighters without knowing yet whether the township will get a grant that would pay the salary and benefits for three of them.
[CORRECTION: The SAFER grant application asked for enough money to pay 100% of salaries and benefits for ALL 5 new hires for THREE years. After that, the township will have to pay for those expenses. Keep in mind that career firefighters are part of a bargaining unit with well-defined employment rights.]
"However, I do see the need to raise taxes in order to end the deficit spending that has been the norm over the last few years even without hiring new personnel," Mack said.
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Actually, the Supervisors will be voting on the budget as presented to us by the Township Manager, not one of the three scenarios in in the ESI report. We have not yet seen that budget. The budget may or may not include all the recommendations made in the ESI report. But I am concerned about all the new hires that were recommended in Scenario 3. This may not be the right time to hire 5 more firefighters, for example, given the fact that ESI assumed the Township would get a SAFER grant to cover the first 3 years of that expense. As far as I know, Newtown is not on the list of townships that received a grant this year. However, I do see the need to raise taxes in order to end the deficit spending that has been the norm over the last few years even without hiring new personnel.
The Econsult recommendations and 2021 budget will be on the agenda for discussion at the October 12, 2020, Meet Mack Monday Zoom meeting. REGISTER TO ATTEND and give me your opinions and insights.