With the city’s finance director crediting Meadville’s new stormwater management program with holding a 2-mill property tax increase at bay, a 2013 budget that holds the city’s property-tax rate at its current level has taken a major step toward final passage.
Plans call for first and second readings of the city’s proposed budget during council’s regularly-scheduled Dec. 5 study session, and the vote on final approval to take place during council’s monthly meeting on Dec. 19. Between now and then, anything can happen, but as of Wednesday night’s special council study session, a zero-mill property tax increase that would hold the rate at 20.92 mills looks like the direction things may go. With 1 mill equaling $1 for each $1,000 in a property’s assessed value, the owner of a Meadville residence with the median assessed value of $25,000 will receive a city property tax bill of $523.
As of 4 p.m. Tuesday, however, the city’s taxpayers had been about to be beneficiaries of a half-mill decrease. That was when Finance Director Tim Groves got a phone call from the PennPRIME Liability and Workers’ Compensation Trust, the city’s worker’s compensation carrier, advising him that cost of the city’s worker’s comp coverage will increase by $70,000 in 2013. With each mill bringing approximately $145,000 to $147,000 into the city coffers, the increase effectively eliminated the possibility of a tax break.
According to City Manager Joe Chriest, the increase is a result of the implementation of Firefighter Cancer Presumption Act 46, which was signed into law by Gov. Tom Corbett and has been in effect since July 2011. The act designates cancer as an occupational disease for firefighters and extends the period for filing claims to more than 11 years. The change tripled the cost of the city’s workmen’s compensation payment for its firefighters; in 2012, the cost of the fire share of the city’s workmen’s compensation bill was $35,000.
Another option that would have allowed council to reduce the city’s tax bill by an additional half mill by reducing the city’s fund balance by $75,000 was rejected by council as being shortsighted.
“If you take $75,000 out of the fund balance this year, then you start next year $75,000 down,” Groves explained.
City Manager Joe Chriest noted that maintaining the current fund balance at approximately $700,000 allowed the city to save money by not having to take measures such as issuing tax-anticipation notes to cover the period before property taxes are paid.
“Taking the fund balance just kicks the can down the road,” Mayor Christopher Soff said. “Eventually the city’s savings account will be depleted.”
As for the rest of the budget, “Without stormwater we would be looking at a 2-mill increase right now,” Groves replied when Councilmember Nancy Mangilo-Bittner complained that the newly-enacted stormwater management program and its accompanying fee did not seem to be reducing bills received by the city’s property-tax-paying owners.
“I really thinned it as much as I could with realistic things we can live with year after year,” Groves added.
“The last thing I want to do is give a tax reduction and next year raise taxes by 2 mills,” Councilmember LeRoy Stearns observed.
Expressing disappointment that the current budget only manages to hold the current millage rate at the 2012 level but not reduce it, “I challenge anybody — anybody — to find any fat in this budget,” Soff said, calling on the general public to “show us how we can do this less expensively but continue the services everyone expects.”
Mary Spicer can be reached at 724-6370 or by email at firstname.lastname@example.org.