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Tax increases fill shortfalls in short term for Carnegie

| Tuesday, Dec. 31, 2013, 9:00 p.m.

Carnegie Borough Council passed a higher property tax rate and flat business privilege tax as part of the 2014 budget, with every intention of changing both in January.

Council Vice President Pat Catena, chairman of the finance committee, said the increases are needed to fill shortfalls of about $50,000 in the 2013 budget and $60,000 in the 2014 budget, and to match a recent grant from the state Department of Conservation and Natural Resources.

The borough, as of early December, had spent about $4.82 million of its $5.68 million 2013 budget. Council is projecting a $5.95 million budget for 2014.

Council members decided to implement a two-tier business privilege tax system, charging businesses with fewer than 10 employees $300 per year and those with 10 or more employees $600 per year.

The business privilege tax historically had been $200 across the board — the number advertised in November. But council later discussed a two-tier tax with rates of $200 and $500, then decided on Dec. 23 to move to $300 and $600.

Bob Marshall, owner of Bob's Diner in Carnegie, said the increase will help the community.

“In the big picture, this increase does not affect us,” he said. “With the direction Carnegie is going — I believe in (council's) plan and goal for the future. I think it's money well spent.”

The increase in the business privilege tax would allow council to set a millage rate lower than anticipated. Council originally advertised a property tax rate of 6.83 mills — a 0.6-mill increase from this year's rate. With the business tax increase, council could lower the new rate to 6.63 mills.

The switch to the two-tier structure never was advertised. Council must amend the business privilege tax ordinance in order to change to a two-tier system.

Borough solicitor Joe Lucas said council could approve a business privilege tax number different than advertised, but because council would be changing the tax structure the proposal must be advertised.

“This is a substantial change,” Lucas said. “You're creating a different system.”

He said council could pass a property tax rate that differed from the one advertised.

The lower millage is dependent upon the business privilege tax increasing: the 6.63-mill rate couldn't be approved without the $300 and $600 business privilege tax levies also taking effect.

Council voted 5-0 to adopt the 2014 millage of 6.83, and set the business privilege tax at $200 for all businesses.

Council President Rick D'Loss said the intention is to vote at the Jan. 6 workshop meeting to advertise the two-tier business privilege tax structure. At the Jan. 13 voting meeting, council then will vote to reopen the 2014 budget, implement the two-tier business privilege tax and lower the millage to 6.63.

Municipalities must pass a balanced budget by Dec. 31, but state law allows governing bodies to reopen budgets and make changes in the January following a municipal election year to allow newly elected members to make changes.

Democrat Phil Boyd will be sworn in on Jan. 6. He beat incumbent Robert Veres in the May primary election.

Megan Guza is a staff writer for Trib Total Media. She can be reached at 412-388-5810 or

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