Boro Holds The Line On 2011 Taxes
McConnellsburg Borough Council approved a tentative 2011 budget last Wednesday evening that calls for no tax increases for borough residents. On a David Washabaugh/Mack Shaffer motion, council voted unanimously to accept a proposed budget that calls for taxes of 5 mills on real estate in the borough, occupation taxes at 20 mills and a $5 per-capita tax. Borough taxpayers also pay a one-half percent real estate transfer tax and a one-half percent wage tax.
In 2008, council voted to cut real estate taxes for 2009 from 7 mills to 5 mills based on its decision to disband the borough police department effective December 31, 2008. That vote made good on a promise that council had made earlier to return a portion of the tax dollars saved by abolishing the police force to its citizens. In 2009, taxes remained the same as well. One mill of taxes in the borough yields about $25,000 to the borough’s coffers.
Borough Council members unanimously agreed they would not raise any taxes in 2011. Spending is expected to be lower in 2011 now that council has paid $177,000 in to the police pension fund that was required to be paid by December 31, 2010. The one-time “catch-up” contribution stemmed from the borough’s end-of-contract settlement with the former borough police officers. The settlement required that the officers’ pension benefits be amended, retroactive to January 1, 2009, to provide for a spousal and dependent survivor’s benefit of 50 percent of the monthly pension benefit the officer was receiving at the time of the officer’s death.
The borough’s proposed 2011 budget plans for expenditures of $273,154 to be offset by revenues of approximately $403,723.
Expenditures are projected to be lower than estimated 2010 expenditures ($400,903)) by about 32 percent due largely to the 2010 payment of the large required pension contribution.
EXPENDITURES General government
The proposed budget projects spending of $119,784 in the general government category, a 6 percent increase over projected 2010 expenditures in that category. The increase is due largely to legal increases in utilities, insurance and Social Security payments. Council members agreed to make an annual contribution of $100 to the Chamber of Commerce and Tourism, and donations to the library and to the Parks and Recreation Commission of $1,000 and $2,000, respectively.
Protection of persons and property
In the total protection category, the proposed budget sets spending at $30,054, a decrease of approximately $170,822 or 85 percent from expected 2010 expenditures of $200,876. The decrease is largely due to the one-time police pension fund contribution that was made in 2010. The 2011 budget marks the first large savings realized by disbanding the police department.
Fire, water & contributions
The budget proposed sets expenses in this category at $18,316, just slightly more than anticipated spending of $18,050 in 2010. Only a slight increase is expected in trash collection for bulky item day.
A marked increase in expected street construction and street repairs in 2011 is the main reason for an increase in this line item this year. Although council expects to spend about $15,000 in street repairs next year, actual street construction is set for about $20,000 in 2011. Only $1,500 was spent on street construction in 2010. Also in 2010, the borough spent $4,560 on street repairs. Snow removal for 2011 is budgeted at $10,000, which is more than actual expenditures of $3,379 during a relatively harsh 2010 winter. Overall, council projects spending of $105,000 in the highways portion of the budget, a significant increase over expected expenditures of $69,041 in that category for 2010.
On the revenue side of the budget, council expects to collect $133,676 in real estate, occupation and percapita taxes and $133,576 from miscellaneous sources, including wage taxes, TV cable commission, parking meters and fines. Total receipts of $403,723 expected for 2011 are down significantly from 2010 anticipated receipts of $537,375. The nearly 25 percent decrease reflects continuing economic woes, with the largest decreases in interest on investments and real estate transfer taxes. Interest in investments is projected to be considerably lower due to the fact that council used invested funds to make the police pension fund contribution in 2010.
The borough expects to end 2011 with a balance of $130,570, down only slightly from this year’s expected ending balance of $136,472.
The proposed budget will be open for inspection for 30 days, and council must adopt a final 2011 budget at its December meeting. Following the 30-day review period, council may make changes to the budget but may not increase taxes set at last Wednesday’s meeting.