Tarentum doubling earned income tax to compensate for budget shortfall; millage to remain the same

An updated tentative 2023 budget for Tarentum calls for an increase in the earned income tax from 0.5% to 1%.

Borough Manager Dwight Boddorf blamed the increase on a projected $1.2 million general fund deficit.

The overall proposed budget for next year of nearly $17 million assumes the borough will receive grants it is seeking.

The property tax rate is expected to remain 5.48 mills.

If approved, the owner of a home assessed at $100,000 will again pay $584.

Boddorf said the budget shortfall also will be compensated by revenue from Red Cat Power, the borough’s electric company.

Tarentum is one of 35 municipalities in the state that operates its own electrical distribution system. The borough purchases electricity on the wholesale market and delivers it at a retail rate to its 2,500 customers.

Through that, the borough subsidizes general fund operations, Boddorf said.

“This reality has enabled the borough to implement several infrastructure and economic development projects that would otherwise be difficult to accomplish,” he said.

There is no rate increase expected for Red Cat Power customers.

“The budget reflects our commitment to providing a broad range of services effectively and efficiently,” Boddorf said.

“Everything from maintaining local roads, stormwater systems and utilities to providing public safety, recreation and other services was evaluated.”

The preliminary budget, which council passed in a unanimous vote, is available for review until council takes a final vote on Dec. 12.

It consists of a $3.8 million general fund, $1.8 million water fund, $4.2 million electric fund and $6.2 million capital reserves. There is another $628,000 in the sewer budget.

Among the highlights of the 2023 budget are several infrastructure upgrades.

Work includes a new million- gallon tank at the water plant and replacing water treatment equipmentthat is 30 years old.

There are plans to pave First Avenue, repair the fountain in Riverview Memorial Park and continue anti-blight demolition projects. The borough also will purchase a new bucket truck for Red Cat Power.

Expenses next year include $1.4 million for police, $104,000 for fire service and $692,000 for public works.