No Tax Increase in Township Budget, But Deficit Expected

The Newtown Township Board of Supervisors passed an $11.4 million 2014 budget Wednesday that will keep taxes flat for residents. 

The budget is projected to leave the township with a $1,332,468 fund balance going into 2015.  A $596,252 operational deficit is projected, according to township manager Kurt Ferguson.

The spending plan passed 3-2, with Matt Benchener and Phil Calabro voting no. Benchener said the budget was not a sustainable fiscal approach for the township over the long term. “This is not a sustainable budget,” Benchener said. “On the current path, our reserve fund is completely depleted two years from now.”

He suggested cuts, including eliminating the Parks and Recreation Department and reducing the contribution to the local ambulance squad, as a way to conserve money.

The fiscal picture has changed since the township first began discussing the 2014 budget. The expected Earned Income Tax revenues have decreased due to the announcement that Lockheed Martin plans to close its Newtown facility. The township has projected a $337,500 loss in the EIT and the local services tax in 2015 as a result of the news.

Plus, Middletown Township this month approved an Earned Income Tax for its residents. Middletown residents employed in Newtown will now pay EIT to their municipality of residence.

Supervisor Ryan Gallagher said the loss of Lockheed Martin and the addition of Middletown Township’s EIT puts the township in a difficult financial position but he was unwilling to go along with the cuts Benchener suggested.

Instead, he suggested keeping “a keen eye on the revenues throughout the year.”

“We’ll have some tough decisions that we’ll have to make in 12 months depending on how that all plays out,” he said.

Gallagher said there is a “tremendous amount of uncertainty” in how deeply the Lockheed Martin closure will impact the township finances.

“Without knowing those intangible numbers, I’m not willing to sacrifice our police, our fire, our ambulance, our Park and Rec. These are services we need to provide and we need to keep them at the levels they are at,” he said.