Preliminary budget shows flat tax rate in Plum for 2nd straight year

Plum residents can expect much of the same next year if borough council passes a preliminary budget with no tax increases next month.

The budget keeps the millage rate for residents at 6.63 mills for the second year in a row. That means the annual borough property tax bill on a home at Plum’s median assessed value of $117,500 would remain at about $778.

Plum Finance Director Michael Whitico told council next year’s budget will see the borough drawing from its fund balance, however. Projected total revenues are set at $25.7 million, while expenditures sit at $27.2 million.

That leaves a $1.5 million deficit the borough will make up from its current $10.7 million fund balance.

This year’s budget saw total expenditures of $26.5 million, meaning next year’s proposed budget would represent a 2.5% increase in spending.

Whitico cited rising healthcare and insurance costs among the primary reasons for the increase.

Still, with a projected fund balance of about $9.2 million at the end of next year, Whitico said, the borough remains on solid footing.

“I think council should be happy with the budget. No new taxes. No fuel increases. We are using some fund balance, but it’s a very solid budget,” he said.

The borough’s general fund, which accounts for the largest chunk of the budget, would receive $17.6 million in revenue while spending nearly $17.8 million.

The largest costs to the borough come from public safety, public works and sanitation spending, Whitico said.

On the revenue side, Whitico said the borough derives more than 80% of its funds from real estate taxes, income taxes and sanitation fees. The director said there’s no proposed increase to sanitation collection fees next year.

Council President Paul Dern expressed concern over a projected balance of $93,000 in the borough’s fire fund at the end of next year, but Manager David Soboslay said council may soon consider a revised fire fund policy.

Plum hiked taxes by nearly 40% in 2024 after holding flat rates since 2017 in an effort to avoid more tax increases in the coming years.

So far, Whitico said, that plan seems to be working. He said he doesn’t expect council to have to opt for another tax hike for at least several years.

“The general fund is in pretty good shape due to revenue coming in since 2024 and 2025,” he said.

Council will likely vote on the budget at its Dec. 8 meeting.