2006 budget calling for increase of 5 percent in real estate taxes

The new revenue will cover pay raises and increases in health care and utilities.
By LAURE CIOFFI
VINDICATOR PENNSYLVANIA BUREAU
NEW CASTLE, Pa. -- Lawrence County residents will have to dig a little deeper into their wallets next year for a proposed 5 percent property tax increase.
County commissioners introduced the county 2006 budget during Thursday's agenda setting meeting. They will formally vote on the spending plan Dec. 29.
"We are proposing a modest [property] tax increase. It is the only tax we are allowed by law to levy," said Commissioner Dan Vogler.
The proposed 0.253-mill increase will equate to an additional $126.50 in county taxes for a person living in a home assessed at $50,000.
Someone living in a home assessed at $100,000 will see his county taxes jump from $506 per year to $759 per year, under the proposed increase.
Overall the county expects to bring in an extra $837,000 with the tax increase.
One mill of tax brings in about $3.3 million.
The overall millage rate will go from 5.06 mills to 5.313 mills. Commissioners said they will dedicate 4.53 mills for general fund costs, 0.673 mills for debt and 0.11 mills for the county library system.
County administrator Jim Gagliano said the amount of tax dollars dedicated to debt was decreased slightly this year because some of the county's debts are nearly paid off and the payments have decreased.
Explanation
Commissioner Ed Fosnaught said the tax increase is not out of line with regular cost-of-living adjustments and that the increased revenue will be used to pay for expected increases in health care costs, utility bills and employee pay increases.
The general operating fund budget for 2006 is just over $21 million. The 2005 general operation budget was $27 million, but that included the previous year's tax anticipation note. Gagliano said they decided to separate the TAN to a different category in this year's budget.
According to commissioners, they expect to borrow about $6 million this year through a tax anticipation note. The TAN is a short-term loan government uses to pay its expenses until tax revenue starts coming in.
Commissioners said they have slowly been decreasing the TAN amount each year. The tax anticipation note taken out to cover 2005 expenses was $6.5 million.
Vogler noted they do not expect to borrow money from other county funds this year to cover a year-end deficit. In the past, commissioners have borrowed up to $2 million from mental health and mental retardation funds and other departments to make year-end expenses.
The money is usually repaid after Jan. 1 when the TAN money is received, except in 2002 when county Treasurer Gary Felasco failed to repay $1 million to the mental health mental retardation office budget. The county was ordered by the state to pay the money back over the next several years. Vogler said $150,000 was budgeted in the general fund this year to pay back that debt.
What's included
Vogler said the proposed budget does contain cost-of-living adjustments for elected officials, management and nonunion employees, as well as a 4.1 percent salary increase that was agreed to by the American Federation of State, County and Municipal Employees union.
Gagliano added that commissioners have also set aside money in the proposed budget for pay increases for other unions now negotiating with the county. He would not say how much was set aside.
The budget also includes a $300,000 contribution to the county retirement fund.
Commissioners noted that the money raised from the auction of the county nursing home contents and expected profits from its sale was not put into the general fund budget but was set aside in a capital improvement fund.
Commissioner Steve Craig said he wants to start a capital improvement process that will allow the county to make yearly improvements where needed.
cioffi@vindy.com