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Borough Taxes to Increase By 50 Percent

Mayor Dennis O’Brien broke a 3-3 tie Tuesday to pass a 2012 budget that will increase the municipal tax rate from 6 to 9 mills.

 

Update: An earlier version of this story incorrectly stated the tax increase was 35 percent. The story has been updated to reflect the tax increase is 50 percent.

Newtown Borough Mayor Dennis O’Brien broke a 3-3 tie Tuesday to pass a 2012 budget that will increase municipal taxes by 50 percent. In 2012, the owner of an average assessed home in Newtown Borough will pay $360 in municipal taxes – about $129 more than in 2011.

The $2.37 million budget passed by Borough Council increases the tax rate from 6 to 9 mills. The budget utilizes $60,000 of the reserve, which leaves about 10 percent of the operating budget in that fund.

Council member Gerard O'Malley, who is co-chair of the borough’s budget committee, said the committee spent many hours paring down the budget. However, a tax increase was unavoidable.

“We cut as much as we could,” O’Malley said. “At the end of the day, we had to make a hard choice and a hard recommendation to increase the millage. We believe it was necessary to effectively manage the budget and maintain our health going forward.”

However, Council member Mike Sellers disagreed.  Tuesday was the last meeting for democrats Sellers and Julia Woldorf, who were not reelected.

Sellers said he was troubled that a lame duck council would be considering such a steep tax increase.

He suggested that council eliminate contributions to outside organizations for 2012 as well as increase the use of the reserve. “I mean cut it to the core and pass a budget that does not raise taxes,” Sellers said.

Sellers added the new council, which will reorganize in January, can reopen the budget if they wish to do so. “I am extremely uncomfortable with a 50 percent tax increase. I’d like to see us go back and literally cut to the core,” Sellers said.

A vote for the budget was tied 3-3, with Woldorf, Sellers and Perry Warren voting no. O’Brien cast the tiebreaking vote in favor of the 2012 budget.

The proposed budget calls for a 2.25 mill tax increase in the general fund. Additionally, a .5 mill increase in the lighting fund is proposed as well as a new .25 mill ambulance service tax.

“We spend our money on things that we feel are important for the municipality and the people of Newtown Borough,” O'Malley said. “First and foremost, we spend it on public safety.”

The police department is the borough’s largest expense. Fifty-six percent of the general fund, or $824,014, goes to fund the department and pay for the necessary insurance.

The borough’s main source of revenue is through the real estate transfer tax, earned income tax and the local services tax. This year, the borough expects those sources to generate $850,000.

Real estate taxes make up 20 percent of the borough’s revenue stream. This year, the borough expects to generate $276,944 from real estate taxes. Other sources of revenue include permit fees, licenses, fines, and interest and earnings.

Jim December 14, 2011 at 12:09 PM
An increase from 6 to 9 mills represents a 50% increase...maybe your calculator needs a new battery. The amount of the increase is outrageous!
Kara Seymour December 14, 2011 at 01:24 PM
Hi Jim thanks for pointing that out. I (incorrectly) did my math based on the dollar figures for the average homeowner. The story has been updated.
Hank December 14, 2011 at 03:05 PM
Drive slowly in the Borough. I expect enforcement of the speeding "tax" to get more aggressive.
Gerry Couch December 14, 2011 at 03:10 PM
Sure is convienent for incoming members of council to not have to vote on this HUGE increase! Once seated they should go on the record and own this increase because they are going to have to live with it, or have the courage to question it!
Becky Betz December 14, 2011 at 03:39 PM
If previous councils had increased slightly to keep pace with need (read: ever increasing police costs, $800,000 to police less than one sqare mile???), there wouldn't be such sticker shock. We aren't getting any more services for the extra $, either. The boro doesn't employ one maintenance person,but we have plenty of cops!
Harry December 17, 2011 at 01:14 PM
Agree with Biz Owner, should have been small increases over the years to keep pace with rising expenses. Previous borough councils blew it in that respect. New council must think out side the box for more revenue and look at how to reduce some of the the exorbitant expenses.

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