The impact of a pandemic on local government

In the past 5 weeks, the United States has seen a booming economy come to a screeching halt thanks to COVID-19. Just this morning, LNP-LancasterOnline reported that Lancaster County's unemployment rate is 17.9%, twice the rate of the Great Depression nearly a century ago.

More than 51,000 people in the county are out of work.

This raises a question. What impact does that have on borough government?

One of E-town Borough Council's most important meetings on Thursday

Photo courtesy of the Ephrata Review

This Thursday night, Elizabethtown Borough Council will approve the borough's 2015 budget. Council meets every third Thursday, but I consider this meeting in December to be one of the most important of the year because of the budget. We also vote on the millage rate to establish what property owners will pay in property taxes.

Unfortunately, this week a family responsibility conflicts with the meeting, and I will not be able to attend. It's disappointing because my fellow council members and I have spent hours in many meetings combing through the budget to find savings and figure out how best to fund Elizabethtown for next year and into the future. Part of this will most likely include a tax increase of two-tenths of a mill (raising the rate from 5 to 5.2).

No tax increase for 2013

At its final meeting for the year, Elizabethtown Borough Council adopted a $5.8 million budget for 2013 that holds the line on taxes.

The budget for next year contains some large expenditures, but they are for items that are necessary for the long-term viability of the borough and its services. They include:

• $225,000 for the purchase of property behind Advanced Auto. A former industrial site, the borough plans to buy the property and use it to store maintenance equipment, with an eye toward eventually constructing a new maintenance building.
• $28,000 to refurbish the softball field and dugouts at Community Park. The field is heavily used, and some players have logged complaints with the borough about the safety of the fields.
• $30,000 to install a new roof on Borough Hall.

These are just a few of the highlights of what really is an austere budget. That said, residents of Elizabethtown will notice a few other projects in 2013, such as construction of walking and bicycle paths extending from the Amtrak train station across Market Street through the alley system and on toward the Elizabethtown Area School District campus. This project is entirely grant funded.

In addition, the borough received word in late November that it is the recipient of a $250,000 grant to construct an entrance at Community Park along Cherry Alley just off College Avenue.

Council adopts 2011 budget with a tax increase

After holding the line for 2010, Elizabethtown Borough Council adopted the borough's 2011 budget Dec. 16 with a tax increase of eight-tenths of a mill, bringing the total rate to 5 mills.

That means the average property owner with an assessed value of $150,000 will see  $120 increase in taxes for 2011.

The vote was 6-0 in favor of spending plan, but Councilman Tom Shaud took a long pause before casting his roll call vote to say that the increase will have a significant impact on him as a blue-collar worker. But, he said, the work of the borough must continue. Councilman Neil Ketchum said at the end of the meeting that in his year on Borough Council the budget vote was his most difficult decision.

The tax increase was necessary as the borough faced a deficit of $340,000 thanks to revenue projections for the earned income tax that are lower than in years past. The current economy and high unemployment rate contribute to lower collections in the tax.

I personally did receive correspondence from some residents who said the borough needs to maintain its current level of service while also not increasing taxes. Only two people attended Thursday's council meeting, and just one spoke out against the tax increase.

It's worth noting again that the 2011 budget does not include nearly $15 million in projects  funded through a number of grants that Elizabethtown has been fortunate to receive. Throughout 2011, residents will see a number of these projects start or be completed, all with little or no impact on municipal budgets.

Borough Council approves draft 2011 budget

Last week, Elizabethtown Borough Council approved a preliminary version of the borough's 2011 budget that contains a deficit of nearly $340,000. This draft is now open for public review at the borough office at 600 S. Hanover St.

In a separate vote, council set the maximum millage rate for 2011 at 5.4 mills, which is a 1.2 mills increase. State law requires that council set the millage rate now -- but it is not locked in place. Council can lower that rate, but it can't set the rate higher than 5.4 after the vote last week.

Council approved both the draft budget and the millage increase unanimously.

If you read this blog regularly, you know I've written about the budget already and the predicament that Borough Council is in when it comes to lower projected revenues.

Here's a word about the millage increase. If council keeps the millage increase at the level approved, a homeowner with an average assessment of $150,000 would see his taxes increase by $180 next year. This would generate nearly $526,000 in additional income, more than covering the deficit.

By comparison:

• A 1 mill increase to 5.2 mills would mean a $150 increase to the average homeowner, generating $438,200 in additional income.
  
• A .9 mill increase to 5.1 mills would mean a $135 increase, generating $394,398 in additional income.
  
• A .8 mill increase to 5 mills would mean a $120 increase and $350,576 in additional income.
  
• A .7 mill increase to 4.9 mills would mean a $105 increase and $306,754 in additional income.

It's a pretty drastic illustration and the reality of where things are when it comes to tax increases and what they generate in revenues.

Now a word,  in this one councilman's opinion, about a tax increase: Borough residents did not see a tax increase last year, thanks to spending cuts. We held the line and were able to squeak by for a year, but the economy has not improved enough to make up the difference. Any additional budget cuts would mean cutting services, and personally I am not willing to cut beyond the current level of services.

So although Borough Council set the millage rate at 5.4 for 2011, we can decide to lower it Dec. 16  when we approve the final budget. I am not in favor of an increase of more than 1 mill -- and I could be convinced of a lower rate that covers the deficit.

However, we also have to take into account some soft costs (such as engineering costs for work on extending West College Avenue) for some of the projects the borough is able to do thanks to state and federal grants. It would be irresponsible for Borough Council just to cover the deficit and not plan for covering those soft costs.

Do you have other ideas or thoughts? Let's hear them!

Costs of various goods and services in Elizabethtown

As Elizabethtown Borough Council considers and debates the borough's 2011 budget, here are some costs that many of us incur in Elizabethtown -- and they are things to think about and consider, especially when compared to your property taxes:

• GEARS before and after school daycare (one child for 9 months): $3,120
• Average annual electric bill for a customer with central air conditioning: $2,200
• Price for filling up a 10-gallon gas tank once every other week: $1,144
• Basic digital cable from Comcast: $720
• Purchase one 20-ounce soda per day for a year: $507
• Price of one cup of coffee at Turkey Hill a day for a year: $464
• Elizabethtown's average real estate tax bill: $579
• One Pennsylvania Lottery ticket per day for a year: $365
• Sliver membership to Elizabethtown Fitness Center: $490
• Basic telephone service: $360
• Elizabethtown Borough sewer fee: $252
• Willowood Swim Club membership for three months: $225
• Elizabethtown Borough trash/recycling (one bag per week): $160

Thanks goes to the borough staff for compiling these numbers. It certainly puts things in perspective for me. If you think about it,  the services the borough provides -- such as 24-7 police protection, a code enforcement program, beautiful parks, recreation programming through GEARS, clean and safe roads, snow plowing, emergency management services, street sweeping, street lights, contributions to the Elizabethtown Fire Department and the Elizabethtown Public Library -- make living in this community a value.

Borough's budget faces nearly $340,000 gap

On Thursday, Elizabethtown Borough Council -- and only a small handful of the public, two of whom were reporters -- got its first look at the proposed 2011 budget. And it doesn't look pretty.

The borough faces deficit of $338,890 -- and that is on a budget that is bare bones just covering the essentials and keeping services at their current levels. To the borough staff's credit -- from the borough manager and police chief on down -- they have held the line in costs and expenditures to the point that the proposed 2011 budget expenditures are less than 2008 and 2009.

In terms of revenues, such as the earned income tax, the Lancaster County Tax Collection Bureau has advised Elizabethtown to budget less than 2010. For this current year, he borough projects that it will receive $997,000 in earned income taxes -- that is, the tax on the income from people's wages. Because of the unemployment rate and the economy, the tax collection bureau projects that Elizabethtown will receive $903,000 next year -- an 11 percent drop.

Consider that in 2008, the earned income tax brought the borough nearly $1.2 million in revenue, and the drop has been precipitous.

Consider, too, that the borough's capital reserve fund is virtually broke. That means there is no extra money set aside for a "rainy day," so to speak. So here's the philosophical rub on that: Isn't it fiscally prudent for the borough to plan ahead and set aside money just in case?

Based on the conversation that my fellow councilmen and I had at last Thursday's council meeting, Elizabethtown residents are going to see some kind of tax increase. All of us are pretty much resigned to that. The question is, how big is the increase?

The borough's millage rate for property taxes -- which generate $1.8 million in revenues -- is set at 4.2 mills right now. The average tax bill on a home assessed at $150,000 is $630.

If Borough Council were to cover just the deficit and not set aside money for the future, the rate would have to increase to 5 mills, which would generate an extra $350,576. That would increase taxes on that average $150,000 home by $130, bringing the total average tax bill to $750.

Increasing the rate beyond 5 mills, to say 5.1 or 5.2, would generate more revenue that the borough could set aside for the future -- in my mind, a move that keeps the long-term vitality of the borough in mind.

Last year, at this point in the budgeting season, the deficit was even more significant -- and Borough Council asked staff to find places to cut 5 percent from the budget. Which they did. If we ask for more cuts, it will mean cutting services. Speaking as one councilman, I am determined to maintain services at the current level.

One more thing: Let me remind you that the work that is happening in Elizabethtown now, and will happen soon, such as the train station work and the extension of West College Avenue, is all funded through grants. Those funds are dedicated to those projects and can't be used for our general operations -- and we are fortunate to have them. If Elizabethtown didn't receive them and take advantage of them, then some other community in Pennsylvania or elsewhere would just as gladly as we are.

These are the questions and issues that we are wrestling with now. This is a budget that impacts you every day, from the time you flush your toilet to providing police protection. What is your response?

Borough Council wants your thoughts in this tough budget year

As Borough Council begins the budgeting season for 2011, we are facing an extreme situation the likes that many of us have never seen. In fact, my fellow Councilman Meade Bierly said earlier this month that he had never seen in his 40 years on Borough Council a budget as tough as last the one we approved for 2010.

It looks as though this year we might face an even tougher year.

Revenue predictions for next year from the Lancaster County Tax Collection Bureau are way down -- and this year the bureau advised municipalities countywide not to expect much from the collection of the earned income tax.

Last year, Elizabethtown's borough staff did a great job working on a bare-bones budget that Borough Council asked them to cut even further. In the end, we approved the budget without a tax increase.

We have just started to develop the 2011 budget, and we would like residents' input on priorities for services Elizabethtown provides -- especially in these challenging economic times.


As we've said on the borough's website, "costs (fuel, insurance, labor, electricity to name a few) continue to rise as revenues fall. Under these circumstances, it becomes more and more difficult to maintain the same level of service to the community at the current tax rate."

We would like your thoughts on the following questions: 

• Do you wish services that are provided for the community such as law enforcement, fire, street paving, parks, and code enforcement to be maintained at current levels in 2011?
  
• If you wish all services to remain at current levels of service, do you feel that Borough Council should increase taxes to cover the costs of these services?
  
• If not, which of the many services provided to the community should be reduced in scope?
  
• What services do you feel are essential and should not be reduced or cut under any circumstance?
  
• Should fees for services such as pavilion rentals, trash tag sales, code enforcement and dog recovery be increased beyond their associated costs to provide additional revenue?

I know that all of us on Borough Council are appreciative of any feedback we get from the public on these issues during the budgeting season. If you like, you can post your comments here at Chronicling Elizabethtown, and I will pass them on the the rest of Borough Council and the staff to ensure that your voice is heard. Or, you can send an e-mail with your comments directly to the borough at boro@etownonline.com. To ensure that we can consider comments in time for the budget, please send all responses, whether it's here at the blog or directly to the borough, by Nov. 24.

Council passes 2010 budget with no tax increase

Borough Council passed the 2010 budget on Dec. 17 with no tax increase. The vote was 4-2, after a prior motion to increase taxes by two-tenths of a mill resulted in a tie. Mayor Robert Brain, in his last meeting before leaving office, cast the deciding vote in opposition of raising taxes.

The action means the borough has a budget of nearly $4.8 million for next year, just about $2,100 carried over from the current year. By all accounts, that is a razor-thin balance to start the year, which is in part why Councilman Dale Treese and I voted against a no-tax increase budget.

I believe that we need to look out for the long-term health of Elizabethtown, and while the economy is running roughshod over people the .2 mill increase was just $20 out of people's pockets. That would have generated $87,000 in additional revenue to give the borough a better cushion going into next year. The increase also was, in my mind, a good compromise and minimal enough to prevent a large increase next year.

But other council members felt otherwise, and we have a budget in place for 2010 that will maintain services. And for that, I credit all of council and the borough staff for working hard to ensure that.

Borough Council reviews budget cuts

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.

Revenue sources are like an orange that's been juiced

For the past month, Elizabethtown Borough Council has been working on the borough's 2010 budget, and it hasn't been a pretty picture. In short, the budget at the moment has a deficit of $375,000 -- but each councilman and the borough's staff are working tirelessly to reduce that amount and find ways to cut spending where it can be cut and squeeze additional revenues from sources that are like an orange that's already been juiced.

Because the country is in the midst of the worst recession in decades -- some would say we've teetered on the brink of another Great Depression -- revenue from sources such as the earned income tax and real estate transfer tax is way down. On top of this, the borough has pension requirements that it must fulfill under state law -- without adequate support from the state.

These are issues nearly every other municipality in Lancaster County is facing; rest assured Elizabethtown is not alone.

While it is true that it would take a tax increase of 20 percent to balance the budget as presented -- Borough Council is NOT considering such a hefty tax increase. The Intelligencer Journal/Lancaster New Era's editors did the borough a disservice with a headline that screamed as such -- but no member of council is willing to place that kind of burden on the taxpayers of the community, especially given the dire economic straits in which many find themselves.

Borough Council discussed the budget for several hours at its November workshop meeting, and we have directed the borough staff to find additional cuts for each department. We are doing everything within our power to minimize the impact on taxpayers -- and we will discuss all options at our workshop meeting Thursday.

Council's plan is to have the details worked out by the end of the meeting Thursday so the borough staff can present a final budget for approval on Dec. 17.