Tax hike could fill Penn Hills budget shortfall
Penn Hills residents and the mayor spoke in favor of raising property taxes to fill a shortfall in the municipality’s 2019 spending plan at a Dec. 17 meeting.
The proposed $32.6 million budget has a $2.8 million gap, half of which will be covered by funds carried over from the fund balance, leaving $1.4 million unaccounted for.
“I am in favor of the one millage,” Mayor Sara Kuhn said during the municipality’s second budget hearing, during which council members took turns addressing residents’ concerns.
If approved, the millage rate would increase 1 mill from 5.444 to 6.444. The proposed rate would mean the owner of a $100,000 home would pay an additional $8.36 per month, or a total of $100.32 more per year.
A balanced spending plan presented to the public already factors in the 1-mill increase, which Manager Scott Andrejchak has said will generate $1.4 million for the municipality.
Andrejchak has blamed the budget shortfall on higher waste service fees. Council approved a three-year, $10.4 million contract with Republic Services in November, a 43-percent increase from the previous three-year deal.
When the budget first was presented to council and the public in October, Andrejchak gave several options for filling the $1.4 million gap – one of which was raising property taxes.
Other options included raising the earned income tax rate of 1.75 percent to an unspecified number, or having residents pay a monthly fee for the municipality’s waste services. Those rates would start at $16.25 per month in 2019 and climb to $17.93 by 2021.
“I’m not in favor of our rubbish charge because of the fact you will have the same situation as we have when people don’t pay their sewage bill,” Kuhn said, adding the problem could pose a public heath risk.
“Then, what are we going to do with the rubbish all over the streets?” she said.
Some residents were pleased with the municipality’s financial direction.
“It sounds to me like we are the prettiest girl in the ball and we are crying because we broke a fingernail. Truly, we are farther ahead than other communities,” said resident Pauline Calabrese, referring to the municipality’s progress with updating its aging sewage system.
Penn Hills last raised property taxes in 2011, when the millage rate went from 5.35 to 5.60 mills for 2012’s spending plan. In 2013, the millage was decreased down to 5.44 mills, and it has remained the same rate since.
The 1-mill increase, however, would reflect the municipality’s largest single increase since 2003, when council hiked property taxes by 2 mills, from 2.60 to 4.60. That rate remained unchanged from 2004-10, when council raised it to 5.1 mills.
Resident Corey Young said Penn Hills faces “systemic issues” when it comes to its finances, referencing deficiencies found in Penn Hills’ financial audits.
“I don’t think it’s just a trash issue or just a sewage issue. I think it’s a whole host of issues that have culminated, and we’re on the trajectory that that trend may continue for years to come,” Young said.
A copy of the proposed 2019 spending plan can be found on the municipality’s website and is available for public inspection at the administrative building at 102 Duff Road.
A final budget will be voted on at a Dec. 28 meeting, scheduled to start at 3 p.m.