Columbia Mayor Leo Lutz reads from a prepared statement at Tuesday's borough council meeting, explaining his views on why a tax hike was necessary.
Columbia Mayor Leo Lutz read from a prepared statement at Tuesday's borough council meeting, explaining his views on why a tax hike was necessary. The statement (shown below) was first published at Columbia News, Views & Reviews.
"I would like to add a few figures to go along with Council President Murphy’s comments.
For the 11 years from 2009 to 2019 the annual budget has included the use of General Fund Reserve Monies 8 of those 11 years.
Included in that was $1,552,578 for the year 2018.
The first draft of the 2019 Budget called for $ 2,704,831
The Final approved 2019 Budget calls for $ 1,280,198
Net Budget reduction of $ 1,280,198
As noted, and I want to repeat, over the past 10 years Borough Council could have increased the millage in smaller increments, these discussions took place every year during Budget talks, but due to the economy the various councils decided to not increase the millage but to use General Fund Reserve monies. Was this wise? Maybe, Maybe not. Bottom line Councils decided that it was better to keep your money in your pocket rather than in a Reserve Fund.
Think about this, as reported, the tax increase based on a home assessed at $100,000 will see an increase of about $120. That amounts to just a little over $12 per year over the past 11 years.
During that same 11 years, contract wages increased an average of 3% compounded. As did administrative wages until this year. There will be no wage increase for Management Employees.
Wages increased $821,464 from the period 2009 to present. The 1.4 Mill increase generates $455,000 and does not cover the wage increase not counting the increase in medical benefits and retirement over that same period of time.
This figure is compounded by the decision to sell the Waste Water Conveyance System for about $8,000,000. Doing this the Borough assumed an average $120,000 per year in wages that were previously paid by the Municipal Authority.
Columbia Borough created a revolving loan fund along with other economic development funds that are matched with funds from County Agencies, like a First Time Home Buyer Assistance Program and a Program to offer low interest loans to residents to make façade improvements and necessary repairs or improvements. The Borough has partnered with Lancaster County Home Opportunity Partnership and Lancaster County Redevelopment Authority with these programs.
One of the reasons for the assistance programs to home owners is based on a conversation I had with a resident who needed to replace part of her sidewalk. She did not have the money to pay for the repairs and went to the bank for a loan. Her repairs would only amount to a couple hundred dollars but was told by the bank that the minimum loan she could get was for $5,000 at about 8% interest. She did not need that amount, nor could she afford to pay on a loan for that amount. The borough created a loan program for home owners with a very low interest rate for any amount to help homeowners.
Last year the Borough Budgeted $1.5 M for a revolving loan fund (Not a Giveaway) to assist business development. This program is typically used as a bridge loan to complete the financing package for a business being developed in Columbia Borough. This year the amount of $800,000 was included in the budget. This is not an additional $800,000 to last years $1,5M. When this Loan Program was created, the Borough Council received little or no negative comment.
This program is similar to programs developed by other municipalities like Reading, Lancaster, and most recently West Chester. I have had recent discussions with other municipalities wanting to copy Columbia’s Program.
During this period, the borough donated $100,000 to the Columbia Borough Fire Company for a new Fire Police Vehicle and bought the former Columbia Number 1 Fire Company building assuming their loan with an $800,000 to $1,000,000 balance. Columbia Borough values the service of our Fire Company and its volunteers and was willing to help financially. The Borough has been fortunate to be able to lease the building with the possibility of sale.
Many compare the Columbia Borough Tax Millage with other municipalities. Here is a comparison as an example;
Manheim Township has a Real Estate Millage rate of 2.66 Mills. 1 Mill of tax in Manheim Township generates $3,152,255. This makes up 31% of Revenue, while Earned Income Tax generates 25 % of Revenue.
1 Mill of tax in Columbia Borough generates about $325,000 and makes up 28% of Revenue, while Earned Income Tax generates 8 % of Revenue.
You can see the large disparity in Earned Income Tax Percentage. One of the important ways to keeping Property Taxes down is to increase the amount of business in the community which will grow the value of the community, create jobs and increase Earned Income.
We cannot afford business like Colonial Metals to shut down or move out of Columbia without having an aggressive Economic Development Plan to grow business and create jobs. This will increase the amount of Earned Income easing the need for more Real Estate Tax. The Borough is doing this.
Considering the fact that the Borough has not raised taxes in 10 years and has assumed those increases and costs noted combined with all the economic development and revitalization efforts, I commend this council and those council’s over the past 10 years for holding taxes to an average of $12 a year."