Whitehall Borough passes earned income tax increase for 2020

While property taxes won’t increase in Whitehall Borough in 2020, borough leaders agreed to raise the earned income tax rate in an effort to bring in more funds to pay for municipal services.

Council members recently approved raising the borough’s earned income tax rate from 1% to 1.2%, which they estimate will bring in an additional $800,000 in revenues this year.

Council member Kathy DePuy dissented on the vote.

“They felt, being home rule, that they wanted to pass the burden for this tax increase on to the wage earners,” borough Manager James Leventry said. “It was to protect seniors and people on fixed incomes, they didn’t want them to have to pay more.”

In all, Whitehall residents will pay 1.7% in earned income tax starting this year, with .5% being levied by the Baldwin-Whitehall School District and 1.2% being levied by Whitehall Borough.

The borough’s 2020 budget holds the line on the real estate tax rate at 4.42 mills.

The 2020 budget includes $11.8 million in the general fund, $1.4 million in the storm sewer fund and $5.6 million in the sanitary sewer fund.

One mill in Whitehall brings in about $870,000. In Whitehall, leaders set the millage rate each year to bring in about $3.4 million. Since 2003, the borough has not increased the millage rate in an effort to bring in more tax dollars, Leventry said. Any changes in the millage rate were based on the influx in property assessments in a given year.

This year, however, it was determined that added revenues were needed to pay for borough expenditures, leaders said.

In 2019, the borough used an estimated $940,000 from its reserve fund to cover expenses. It initially estimated that the number would be much higher, at $1.5 million.

Going into 2020, without raising earned income taxes, borough leaders anticipated needing to take $2 million from the reserve to balance the budget, Leventry said. That would have left the reserve budget at roughly $2 million and the borough relies on that money to pay its bills prior to receiving tax dollars from residents at the start of the year.

The decision by council was not easy nor was it made lightly, Leventry said.

Borough leaders did not want to cut services, he said. The budget includes things like funding nearly a $200,000 loss at the borough pool each year and providing almost $400,000 each year for the Whitehall library.

Leventry said council members believe that residents want those services maintained.

With the increase to earned income taxes in 2020, borough leaders now have budgeted to use $1.2 million from the reserve this year. However, Leventry said leaders “budget to the worst-case scenario” and “expect that number to be significantly less.”

The budget includes several one time projects that need to be completed in 2020, Leventry said.

That includes replacing a leaking roof above the police station, which will cost about $120,000 and repairing earth movement on McRoberts Road that will cost about $140,000. Both projects are scheduled to be completed this spring.

A new pumper truck costing as much as $700,000 for the Whitehall Volunteer Fire Company will be delivered this year. The borough put down “a significant amount” on the truck in 2019, Leventry said.

The borough also is paying for the $800,000 salt storage bin under construction near the public works building. One payment was made on that in 2019.