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Arnold prevents police layoffs with 25% tax increase

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About the tax increase

Here's how taxes would change for a house with an assessed value of $14,000:

Old tax rate: 34.75 mills

New tax rate: 43.50 mills

Current tax bill: $486.50

New tax bill: $609

Tax increase: $122.50

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Tuesday, Jan. 1, 2013, 12:01 a.m.
 

Arnold officials beat Congress by approving a 2013 budget on Monday, but the city still lingers near the edge of its own fiscal cliff.

Council unanimously passed a $4.5 million spending plan that hikes property taxes by 25 percent.

That takes Arnold to the maximum tax increase allowed without court approval.

City residents will pay 43.50 mills in property taxes this year, up from 34.75 mills last year.

The 8.75-mill increase is expected to raise an additional $225,000 in tax revenue.

Mayor Larry Milito said even with the substantial tax increase, the city isn't on firm financial ground.

“We're in an extreme financial bind,” Milito said. “That's the only thing we can do to save jobs.”

Milito said he believes they'll be able to prevent laying off any of the city's 10 police officers.

But cutting the public works department and even an administrative employee still is a consideration in the coming months.

“We, at this point, are not letting any police officers go,” Milito said. “The street crew is not out of the woods yet. We may need to make a cut there, as well as on the administration side in city hall.”

Council in January plans to seek bids for contracting out garbage collection, which currently is handled by city employees. If an outside company assumes those duties, the city could save money on insurance and maintenance costs as well as sell some equipment.

Milito said the loss of garbage collection duties could help justify the elimination of a public works employee on top of the three vacant positions he doesn't believe will be filled.

Milito said officials may consider laying off one of the four city hall employees as well.

He suspects they'll continue to use three additional part-time workers; they are former employees who retired a year ago but were hired on a part-time basis as contract workers for $10,000 each per year and no benefits.

Resident Dante Moretti said he understood the need for increased taxes this year, but he was concerned council would continue to raise taxes in the future.

“I really think this is going to extremes,” Moretti said.

Councilman Dave Horvat, who oversees finances, assured Moretti that council does not intend to hike taxes every year.

“We'll do anything we can to keep costs down,” he said.

Milito has said council already cut about $100,000 in expenses. On paper, 2013 expenses were reduced by about $600,000, but that is due largely to the lack of payments on a 2013 tax-anticipation loan because the city does not plan to assume one this year.

Council still must repay the $750,000 loan from 2012; they are making arrangements with First National Bank to restructure their payment plan.

The city will be starting the year with about a $430,000 deficit until the sewage and garbage fees from the last quarter of 2012, which are due early this year, are collected.

Resident Keith Bertetto said he at least was thankful officials don't plan to eliminate any police officers.

Milito said the city should be able to muddle through this year, but more changes will be needed to keep Arnold solvent for the long term.

“We'll be OK through 2013,” Milito said. “But we'll still look for more cuts.”

Liz Hayes is a staff writer for Trib Total Media. She can be reached at 724-226-4680 or lhayes@tribweb.com.

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