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Rising costs could add up to Latrobe budget shortfall

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Tuesday, Oct. 29, 2013, 12:01 a.m.
 

Given a draft budget report by City Manager Alex Graziani, Latrobe council has to consider how to account for rising salary costs and shrinking revenue that could add up to a $113,000 shortfall in 2014 and possibly translate into a tax increase.

Graziani said during a council agenda meeting on Monday that 55 percent of the projected $5.2 million in expenditures comes from a 3 percent increase in staff salaries, partially the result of benefits and contracted increases.

“Those contracted amounts helped push the 55 percent of the budget, which helps push the entire budget in its trajectory,” he said.

All nonunion city employees, except for the manager, will receive a 2 percent salary increase. For 2013, the city balanced the budget using money from the general fund.

That amount was projected to be about $103,000 at the beginning of the year, and instead will be closer to about $250,000, Graziani said.

With about $5.1 million projected in revenue, the spending plan is up 3.5 percent overall, he said.

In his report to council, Graziani calculated that without any cuts to expenses to make up for the budget shortfall, real estate taxes would have to be raised 2 mills. For a house valued at $100,000, this would mean an additional $42.80 per year for that household, according to the report.

Graziani said the report was a preliminary one and the first chance council has had to view it to determine whether a tax increase or budget cuts are the best solution. For every dollar paid in real estate taxes, 64 cents goes to the Greater Latrobe School District; 18 cents goes to Westmoreland County; and 18 cents goes to the city, according to the report.

“Most residents feel that acutely, so it really squeezes us,” he said.

Stacey Federoff is a staff writer for Trib Total Media.

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