Taxes Go Down but Go Up?
Expect a decrease in the local tax rate next year, Baldwin Borough property owners. But also, expect to pay more in local tax.
Confused? You're probably not alone, but here's the explanation.
Due to a recent countywide real estate reassessment that raised the value of most Baldwin properties, the Baldwin Council is expected to lower its millage rate—currently at 6.61 mills—in order to remain revenue-neutral. In other words, keeping the same millage rate for next year (when the reassessments take effect) would result in a "windfall" of increased tax revenue for the borough, something that is illegal.
To balance that, the local council will almost surely lower Baldwin's millage rate when it approves the borough's 2013 budget later this year. However, the law allows for the borough to adjust its lowered millage rate at 105 percent instead of just 100 percent—in other words, more revenue.
As borough Manager John Barrett explained to council members at a special budget meeting on Monday night, "This is your one opportunity to, literally, decrease millage rates but get more revenue."
(Click here to calculate your individual taxes based on 2012's millage rate.)
The increased revenue would go a long way toward balancing Baldwin's budget for next year, which was presented in a first draft by Barrett earlier this month as being over $1 million short. A 105-percent adjustment of a revenue-neutral millage rate would be perfectly legal and would eat up over $333,000 of that shortfall.
Though no formal vote has been taken yet regarding next year's budget, the Baldwin Council was in agreement on Monday to accept the increased tax revenue.
A lack of a debate was somewhat of a surprise given that the borough's 2012 budget was approved by the narrowest of margins, 4-3, with no millage increase from 2011. Councilmen Ed Moeller, Larry Brown and Bob Collet voted against the 2012 budget, arguing instead for an increase of property taxes by 0.33 mills.
Fellow Councilmen David M. Depretis, Michael Stelmasczyk, John Ferris and John Conley voted last year in favor of keeping the millage rate the same, but Collet said that the money designated for roadwork in the 2012 budget didn't go far enough.
"I thought we could do more," Moeller said this past December.
On Monday, Stelmasczyk said that the revenue generated by increased property taxes in 2013 should be kept separate from the rest of next year's budget in order to cover assessments appeals, which might not be finalized until after the Baldwin Council approves that budget later this year.
"That's really what that (money)'s for," Stelmasczyk said in reference to the appeals, arguing that, should a property owner be successful in lowering his or her real estate assessment, the borough would not receive as much property tax revenue as expected. Management at The Residences of South Hills apartments complex, for example, was successful in lowering its assessment.
But Collet pointed out that the money could be used to cover other borough expenses, as well. He was not met with argument.
"I have no problem with (using it for other expenses)," Collet said. "Everything's going up ... Sooner or later, you have to have more funds to operate at a professional level that satisfies the people in the borough.
"I think 105 percent would be enough for our needs."
Baldwin's final millage rate for 2013 has not been decided.
Check back with the Baldwin-Whitehall Patch for updates regarding this ongoing conversation.
Other Proposals to Balance the Budget
Also at Monday's meeting, Barrett suggested moving surplus funds from this year's budget into 2013's in order to chip away at the $1 million shortfall.
An abundance of leftover road salt after a mild winter this year and a reduction in streetlights will help with moving over almost $119,000 of highway aid. Also, the council could move over $600,000 from this year's fund balance (marked as $400,000 in the budget's first draft) to throw an additonal $200,000 at the shortfall. The borough is also expected to save significant money from a switch in health care providers.
After Monday's meeting, the budget shortfall looks to be $346,134, down from the original $1,059,742.
In lieu of cutting any more expenses in particular, Collet proposed an across-the-board 2-percent tightening of borough expenses, putting the onus on department managers to curtail spending.
The above proposals and suggestions will continue to be discussed at more special meetings regarding the 2013 Baldwin budget.
Next Budget Meetings
At least three more special budget meetings will be held this year, starting with one on Tuesday, Oct. 9, at 6 p.m. At that meeting, Public Works Director Mark Stephenson and police Chief Michael Scott are expected to argue for the addition of employees. Those employees, of course, would require salaries that would initially add to the budget shortfall.
The next meetings after that are scheduled for Tuesdays, Oct. 23 and Nov. 13, both also at 6 p.m.
(UPDATE: Stephenson is no longer expected to ask for another Public Works employee.)
All three meetings will be held in the council chambers of the borough municipal building along Churchview Avenue. The meetings are open to the public, and should circumstances dictate, they would be moved to the municipal auditorium of the same building.
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