Borough Council went over several sections of the proposed 2017 operating budget at its work session on Wednesday. But, the item that generated significant discussion was a proposal for 2018.
Staff recommends that beginning in 2018, a 1.1 mill increase in the real estate tax rate be levied each year for four years for capital improvement projects, said borough Manager Tom Fountaine.
The millage rate now is 16.4.
Meaning that in 2021, and going forward, 4.4 mills of the real estate tax millage rate, which would total 20.8, would be earmarked for the capital improvement general fund.
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Fountaine said the proposal needs to be discussed by council, but no decision is required at this time as the increase wouldn’t take effect until 2018 if approved.
He added that the proposed 2017 operating budget is balanced, with no tax increase.
Councilman Evan Myers said the council needs to understand what the impact of this proposed millage rate increase would be on citizens.
Fountaine said the increase would be billed as a capital fund tax.
Councilwoman Cathy Dauler said she thinks most taxpayers would understand if they were aware of where that money was going.
Since 2007, Fountaine said infrastructure costs continue to be deferred and this tax would be a possible solution to close the gap in funding for the Capital Improvement Plan, which was approved during the summer.
It’s a $1.92 million gap based on the average of the next five years of Capital Improvement Plan projects, he said.
Courtney Hayden, communication coordinator for the borough, said the proposal is new and also “innovative.”
It’s something the borough needs to do to fund capital improvement projects, such as maintaining roads, she said.
To determine the dollar amount of real estate tax, multiply the assessed value of the home by the millage rate and then divide that number by 1,000, Hayden said.