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Proposed Kane budget carries tax increase |
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Written by Publisher
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Tuesday, 10 November 2009 |
Photo by Ted Lutz
Three Kane borough officials take a grim look at the proposed 2010 budget that calls for a property tax rate increase. The officials include, left to right: Councilwoman Janet Bard, chairman of council's Finance Committee; Patrick Nuzzo, borough manager; and Councilman Jim Salvamoser, who cast one of two negative votes against the budget plan because he opposes a tax increase.
The Kane Borough Council voted 3-2 Monday for a proposed 2010 budget that calls for a 1.5-mill increase in the property tax rate.
Council President Howard Kane joined Councilwoman Janet Bard and Councilman Lowell Gillespie in supporting the tentative budget.
Councilmen Jim Salvamoser and John Gentilman voted against the plan.
Councilmen Mike Merry and Dennis Drost did not attend the meeting.
The proposed 1.5-mill increase would raise the borough property tax rate from 6.375 mills to 7.875 mills.
Based on preliminary calculations, a property-owner with an assessed valuation of $50,000 would see their borough tax increase by $75 from $318.75 to $393.75. A property –owner with an assessed valuation of $30,000 would see their borough tax climb by $45 from $191.25 to $236.25.
If the tentative plan is adopted, it would be the second straight year for a property tax increase in Kane.
Council last year increased the tax rate by 1 mill to generate funds exclusively for street repairs.
Bard, chairman of council’s Finance Committee that includes Merry and Kane, unveiled the proposed 2010 spending plan Monday at council’s monthly meeting at the borough building.
According her report, “overall” increases in the 2010 budget total $95,441. The proposal includes $9,500, the estimated cost of a new roof for the borough building on Bayard Street.
The plan also includes $28,680 in pension benefits, which are expected to be offset by state revenue. The borough also expects increases in other revenue such as earned income tax (EIT) on people who work.
The proposed tax rate increase would bring in about $54,000 in additional revenue.
Bard said the Finance Committee worked diligently to cut borough expenses as much as possible without cutting most services.
“Everything is trimmed as close to the bone as we can,” Bard said.
The annual “spring cleanup” program has been cut from the budget.
Due to a sagging economy, Bard indicated that residential property owners unfortunately must shoulder more of the tax burden in Kane because “we don’t have business, we don’t have industry.”
Borough Manager Patrick Nuzzo, who met with the Finance Committee to draft a 2010 budget plan, said costs continue to rise for materials, supplies, wages and benefits.
“Our costs are increasing, but we’re not getting anything to offset that increase,” he told council.
Nuzzo pointed out that the tax base in Kane is declining due to the loss of viable businesses and industries.
In 2007, the borough tax base totaled $80,848,770, Nuzzo said. In 2008, the tax base dropped by nearly $1 million to $79,826,540. He said a pending report for 2009 would show a further decline in the tax base.
When a tax base continually declines, the same tax rate will bring in fewer dollars from one year to the next, it was noted.
“We’re losing our tax base,” Nuzzo told council. “We haven’t had a new house built in Kane in six years.”
Kane said the proposed budget presented by the Finance Committee is “the best we could do.”
“I’m not in favor of a tax increase any more than anyone else,” Kane said. But he said the Finance Committee had no other choice than to include a tax hike in the proposed 2010 budget.
“I feel bad we had to have an increase,” Bard said.
Salvamoser and Gentilman, who voted against the tentative budget, believe council can find ways to cut expenses for next year to avoid a tax hike.
“I’m looking for no tax increase,” Salvamoser said. “We need to look at what Kane can afford. I don’t think our town can afford a mill-and-a-half tax increase in these tough economic times.”
“We need to tighten our belt,” Gentilman said. He said “it’s simple” to reduce expenses and avoid a tax increase.
“It’s called cutbacks,” he said.
Although he voted in favor of the proposed budget, Gillespie indicated that he could possibly change his mind when council acts next month to approve a final budget.
“I’d like to see some cuts, too,” Gillespie said. “People can’t afford it (a tax hike).”
This is the first borough budget discussion for Gillespie, who was appointed to council earlier this year. Last week, he won election to a two-year term as a write-in candidate.
Nuzzo invited the council members to sit down with him and “show me where” the budget can be cut.
“I’d be more than happy if council could come up with ways to defer a tax increase,” he said.
“I don’t know of any cuts you could make.”
Salvamoser said “it’s our responsibility to the voters” to scrutinize the proposed budget and look for ways to reduce expenses.
He said he would making a line-by-line review of the budget proposal and believes he can find ways to avoid a tax increase.
“I’m going to do it,” he vowed.
The tax rate for the proposed budget includes 5.2 mills for “general purposes.” The current rate is 3.7 mills.
The tax rates remain the same at 1.5 mills for street improvements, .5 mills for street lights, .5 mills for fire improvements, .15 mills for recreation and .025 mills for shade trees. The total is 7.875 mills, up 1.5 mills from the 6.375 mills this year.
A vote on the final 2010 budget is expected at the next council meeting Dec. 14 at 10 a.m. at the borough building.
Meanwhile, council has scheduled a workshop to further discuss the budget plan prepared by the Finance Committee.
The workshop is tentatively set for Wednesday, Dec. 2 at 7 p.m. at the borough building. The workshop is open to the public.
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Last Updated ( Thursday, 10 December 2009 )
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