Two posts ago, I said that revenue sources for Elizabethtown are like an orange that's been juiced. After reviewing the 2010 budget at Borough Council's Dec. 3 workshop meeting, it is an apt description for the borough.
Faced with a $375,000 deficit in our first version of the budget in November, Council directed the borough staff to find 5 percent more to cut from each department. And to the credit of Borough Manager Pete Whipple and Assistant Borough Manager Roni Ryan, they did. The bottom line is they found cuts totaling $377,190. Both Whipple and Ryan said these cuts are not ideal, but they will allow Elizabethtown to maintain a level of service to which resident are accustomed.
Brutal fact: However, this means the borough will carry an unappropriated balance of $2,136 into 2010. Under good economic conditions, that balance might be about $300,000.
What does this mean for the borough? One snow storm in January that would require removing snow from the downtown area would easily push the budget into the red. And this doesn't figure any other emergencies later in the year.
Brutal fact: Ryan presented council with a budget whose expenditures were less than last year. The problems with the deficit exist solely because revenues have dried up. Because of the employment picture, we are receiving less in the earned income tax. Because housing sales are down, the borough has received far less in the real estate transfer tax. The budget issues have nothing to do with excessive spending or a bloated government. Elizabethtown runs a lean operation -- in fact, Whipple said there are fewer borough employees now than when he was hired as manager more than 30 years ago.
How is all of this going to shake out? Last night, three council members clearly voiced their opposition to an increase in taxes. Three others voiced opinions favoring a small increase in taxes.
I am reluctant to raise taxes because I am sensitive to the impact it would have on residents, especially during the recession. That said, we are living in extraordinary times -- and I am not certain that forgoing an increase is in the best long-term interests of Elizabethtown. As one councilman, I believe that we need to be watching out for this town not just for next year but 5 or 10 years from now.
Among Borough Council and the borough staff, the conventional wisdom is that we will be facing a similar budget a year from now, and as one councilman said, we might "face the music" and pass a significant tax increase rather than trying to ease the pain this year. This is the kind of gamble that we take as your elected officials.
My question is, if we face the music next year, how loud is that music going to be?
I sincerely doubt that Borough Council will end with a 3-3 tie vote on the 2010 budget, throwing the deciding vote to the mayor. I encourage all interested residents to attend the Dec. 17 council meeting to find out how this plays out.