Borough residents voiced concerns that rising tax rates will eventually price new and hopeful residents out of the borough during a public hearing Monday on the proposed 2015 budget.
The budget has been available for inspection in the borough administration office and through its website since Nov. 10.
Borough resident Ellen Kline, incoming president of the Centre County Association of Realtors, addressed the borough over the proposed increase to the real estate transfer tax.
The 2015 budget proposes a 0.25 percent increase to the realty transfer tax, projecting $155,000 in revenue. According to the budget, the impact on a sale of $300,000 would be $750.
“You will now be the highest municipality for transfer tax in the region,” Kline said.
Other taxes in the borough won’t offset the transfer tax, she said, like in Ferguson Township, where a lower wage tax helps offset the transfer tax.
“I think you’re going to get yourself in a position, in my opinion,” she said, “of being difficult for young buyers, first time buyers, to come in here.”
The more buyers have to pay up front in closing costs means the more they have to pay in taxes, Kline said. This doesn’t help the drive to bring families into the borough.
Derek Canova, a resident and small business owner, said increasing both transfer and real estate taxes would be a detriment in the long term initiatives the borough has toward first time buyers in the area.
“I’ve been involved with several houses in the $150,000 range, and an increase in taxes of only $150 or $200 to someone like that is substantial,” he said. With borough taxes, school taxes and insurance costs increasing, it will continually put people out of the ability to buy homes.
Landlords will also see increased costs, which will trickle down to small business owners, he said, making it difficult for small businesses to succeed.
David Stone, of East Foster Avenue, said the solution is digging into the budget and finding solutions.
“I think that’s the future,” he said, “that we’re going to have to rely on volunteers and get creative.”
Budget discussions are an opportunity for residents to change the process and get involved on committees, he said, saying “We can find a better way.”
Councilman Peter Morris said for several years, the borough did not raise taxes, opting instead to take funds from the emergency reserves and place them in the general fund.
“In other words, for several years, we’ve had a one-time infusion of funds into the budget,” he said. “You can’t keep doing that forever.”
If you want to stop doing that and not lose services, he said, you’ve got to raise taxes to cover the sum of all the incremental increases over the years, catching up to all the tax increases.
“In my opinion, this practice of one-time infusions of money into the system is bad public policy,” he said. “Unfortunately, I regret that my arguments were not persuasive enough to a majority of this council.”
The borough’s assessed value has remained mostly flat, council President Jim Rosenberger said. Given the structure of the region, growth is expected around the borough, but not much growth can be made within the borough.
Rosenberger said the council will spend more hours working on the budget.
The council began holding budget review sessions on Nov. 17. Further reviews are slated during work sessions on Tuesday and Friday and into next week on Dec. 8 and 9. Final budget adoption is scheduled for Dec. 15.