There will not be a tax increase for Schuylkill County residents next year.
The board of commissioners approved a preliminary 2016 budget Wednesday with no increase in real estate taxes.
The proposed budget keeps the real estate taxes at 13.98 mills, or 139.8 cents on each $100 of assessed valuation. Of that real estate tax, 13.83 mills will go toward the general fund and 0.15 mills will fund the county debt.
Per capita tax will also stay at $5.
To cover a budget deficit without increasing taxes, the county will draw $8,145,873 from the unassigned general fund.
County real estate taxes increased only once over the last 11 years. The only increase during that time was for the 2014 budget when it jumped 2 mills to the current rate.
“We are fortunate once again we didn’t have to have a tax increase because of what we did in previous years,” Commissioners Chairman Frank J. Staudenmeier said. “The budget is always challenging, but this year’s budget was very different because of the absence of Rest Haven and what we are doing with the prison. We need at least one year’s experience to see how that all shakes out.”
Investment 360°, Lakewood, New Jersey, took over Sept. 1 as owners of the Rest Haven, now known as Rosewood Health and Rehabilitation Center, after agreeing to purchase it for $10.9 million in May.
Commissioner George F. Halcovage said the county will also benefit from the addition of a new business.
“We brought in another company that is now paying taxes, employs over 90 percent of the same people and is keeping the Rest Haven facility as a viable home for our seniors,” Halcovage said.
Halcovage said the county has challenged its employees to do more with less as they try to run government like a business.
“The reason county government exists is to provide services and the people of Schuylkill County expect that,” Staudenmeier said, “But that does not mean we can’t do it in the most efficient way possible and I think we have demonstrated that over the last 11 to 12 years.”
Commissioner Gary J. Hess was unable to attend the meeting Wednesday. He was in the hospital recovering from pneumonia.
“I am very glad we can hold the line on taxes,” Hess said in a phone call after the meeting. “We need to be diligent and continue to cut where we can, but we need to look for new forms of revenue other than taxes.”
The budget includes $137,336,906 in total revenue and $144,606,940 in total expenditures.
“Your financial team was challenged to deal with a significant structural deficit for 2016,” Paul Buber, county finance director, said. “By applying expense trending techniques, by reviewing narratives submitted by internal stakeholders, by making inquiries to internal stakeholders on their justifications, by applying options for financing of larger capital items and by finding alternative funding for some initiatives, the financial team was able to generate about $1,844,148 in cost reductions which has reduced the budgetary expenditures submitted by the internal stakeholders from $60,281,213 to $58,437,065.”
Buber said the proposed general fund expenditures increased $2,748,334 over the previous year while revenue decreased $1,461,686. He said significant drivers of increased expenditures include:
• An increase of $1,883,725 to a total of $7,003,109 for prison operations
• An increase of $955,200 to a total of $12,895,200 for health care benefits
• An increase of $512,685 to a total of $3,648,511 for Children & Youth
• An increase of $168,789 to a total of $929,464 for the public defender’s office
• An increase of $140,00 to a total of $2,740,000 to the retirement fund
• An increase of $585,000 to a total of $18,989,941 for employee compensation per collective bargaining agreements.
Last week, the commissioners approved the annual property assessment for the county. Property values fell for the first time in five years. While the overall assessed value decreased about $13.4 million due to court appeals and stipulations settled throughout the year, that represents only about a $188,000 loss of revenue for the county, county solicitor Al Marshall said. School districts will see the most significant loss in revenue.
County Administrator Mark Scarbinsky said the county has struggled to operate its $145 million business over the past few years, but has been able to forgo any major property tax increases in 10 of the last 11 years.
“However, because of state-mandated programs and the associated need to increase local financial support for those programs, the construction of a sound balanced budget has become more problematic.”
Scarbinsky said the one-time cash infusion from the sale of Rest Haven also helped balance the 2016 budget without increasing taxes. He recommended the commissioners review its positions on the following activities:
• Consider a hiring freeze
• Freeze all travel except mandatory/certification training
• Right-size operations through furloughs in non-core areas
• Eliminate and consolidate positions
• Utilize more part-time employees
• Consider outsourcing some operational functions
• Initiate new fees for service
“The structural deficit, as mentioned earlier, will only continue to threaten the financial position of the county and there are no other options but to initiate actions to slow the increases in costs of government services and to increase revenues,” Scarbinsky said. “We need to work with our legislative delegation in seeking alternatives to the real estate tax as our only major source of revenue. We also need to maintain and redefine our focus on core functions and priorities. The unsustainability of wage and benefits packages has to be addressed if the county is to maintain long-term fiscal stability.”
A final budget will be presented to the commissioners Dec. 16.