30 percent tax hike proposed
FORD CITY — Council on Tuesday revealed a $2.6 million 2012 general fund draft budget for the borough that will raise taxes for borough property owners by about 30 percent.
Council voted 5-0 to advertise its proposed spending plan that includes a 4.65-mill property tax increase. Council members John Lux, Ray Klukan, Ron Dillard, Lou Vergari and Paul Harmon voted for the preliminary budget. Councilman Rob Mohney was absent from the meeting.
The tentative budget calls for the millage rate to be increased from 14.65 mills to 19.3 mills; and it includes an increase from 9.25 mills to 13.9 mills levied for general purposes and unchanged special taxes of 1 mill for the public library, 1.65 mills for street lighting, .15 mills for non-uniform employee pensions and 2.6 mills for fire equipment.
One mill of taxes, if all of it is collected, generates about $38,000 of income for the borough.
Vergari said a property owner with a $50,000 home with an assessed value of $25,000 will see their borough real estate tax bill go up by about $100.
Harmon, the finance committee chairman, said that since 2000 there have been three tax increases with none for the general purposes fund — the increases were for debt services, fire apparatus and street lighting.
Council members believe the tax increase can be reduced in the final budget.
"I think we should be able to find some savings and get the tax rate down," said Harmon.
Harmon blamed increased contributions to the borough's minimum municipal obligation for the general employees' pension plan and police pension plan; rising health insurance costs, increases in employee benefits and wages and higher gasoline costs for the budget shortage of about $123,000.
"The police pension really hit the borough hard," said Lux.
Lux said council will look for cuts before approving a final budget. He did not say where he thought the budget could be trimmed.
Dillard said after the meeting that in his opinion, the police pension fund was not well managed. He said the borough must increase payments to the fund to make up for previous inadequacies in the funding of it.
"The police department is costing us about 55 percent of all the money coming into the borough," said Dillard.
Council said the preliminary budget is available for public review and is expected to be given final approval at its second public meeting in late December.
In other borough business, council approved purchasing a used Ford 3/4-ton pickup for the maintenance department from Hal Wading for $9,000.