Lower Burrell wants to raise property taxes by 8.7%

Lower Burrell Council wants to raise real estate taxes by 8.7% in its 2021 budget. Council will vote on the preliminary budget at its meeting Monday, Nov. 9.

The city’s proposed 2-mill real estate tax hike would translate into a nearly $40 annual increase for the average home, which is assessed at $19,668 and is subject to real estate taxes of $447.45. The rate would increase from 22.75 to 24.75 mills.

The proposed 2021 budget of $6.65 million features typical overall budget increases. The biggest budget increases are personnel costs at 4% and pension contributions at nearly 5%, said Councilman Chris Fabry, director of finance and accounts for the city.

Driving the proposed tax increase is council’s decision not to dip into savings to balance the budget.

“You can only cut for so long,” Fabry said.

The majority of the city’s budget is made up of fixed costs such as union contracts for police and public works, insurance, pension payments and other operating supplies and expenses, Fabry said.

“So what is left are things we can’t sacrifice, such as police needs, support to our fire departments, parks upkeep, etc.,” he said.

In October, council members held two public budget workshops and tried to close the budget gap to lessen the sting of a tax increase. They whittled the tax increase from 3 mills to 2 mills, Fabry said.

Mayor John Andrejcik commended council for its efforts on the budget during its agenda meeting Monday: “I know what kind of work was done, thank you for all of your work,” he said.

Council decided it would stop tapping its savings to fill budget gaps and avoid raising taxes, Fabry said. Council has been budgeting expenses beyond the city’s revenues since 2013, he said.

“That is not a sustainable practice,” Fabry said.

The city’s reliance on its savings coincides with years of not raising taxes. The only tax increase in seven years was in 2018, when council raised taxes by 1.5 mills to start to pay for a recent city hall renovation project, noted Fabry.

If the city continues to exhaust its reserves, it eventually will have to take out bridge loans to cover gaps before the annual receipt of tax revenue, he said.

“That is wasted money spent in terms of spending funds on interest,” he said.

Council is expected to vote on the preliminary budget when it meets at 7 p.m. Monday at City Hall, 2800 Bethel St.