MAHANOY CITY — To pay for current and future debt obligations, the borough is raising taxes and applying for assistance from the state.
The borough council approved a tentative 2016 budget Tuesday that includes a 3-mill real estate tax increase, bringing the total millage rate to 35.52, or $35.52 for every $1,000 of assessed value.
The draft of the budget shows a surplus of $80,146. Borough Manager Daniel L. Lynch said that will go toward debt servicing.
One mill brings in about $24,000, he said. But with an 80 percent collection rate, it really is between $19,000 and $20,000. The increase will bring in an additional $60,000 to the borough.
The median home value in the borough is $8,645, Lynch said. Each mill is then worth $8.64 and the proposed increase means another $25.93 in real estate taxes for the average borough resident.
The council also approved a resolution to apply for aid under Act 47. As a “financially distressed” community, the borough will then be able to aid in the form of grants and loans as well as increase its earned income tax past the 1 mill maximum.
Lynch said the borough plans to raise its earned income tax by a 1/2 mill.
Currently, the borough splits the 1 mill with the school district. Lynch said each taxing body gets about $226,000. Only the borough will benefit from the 1/2 mill increase, giving it about another $226,000 in tax revenue.
“What we need to do is get stable with the reserve and be prepared to address some upcoming major infrastructure issues, the main one being Market Street,” Lynch said.
The borough has not had a capital reserve fund in about the last 15 years, Lynch said. However, the Pennsylvania State Association of Boroughs recommends having a minimum of 25 percent of the budget available in cash.
Lynch said a series of unbudgeted issues came up over the last couple years that further depleted funding. Meanwhile, the borough will soon have to pay for the rehabilitation of sections of Market Street, which is the longest bridge in the county. The Mahanoy Creek runs under the town along that street.
Councilmen Robert Lewis, Thomas Flamini and Keri Cavenas were not at the meeting. The remaining board members unanimously approved the tentative budget as well as the resolution to apply for Act 47 designation.
The proposed 2016 budget will be available for public review for 10 days. The final budget will be approved at a meeting later this month. Lynch encouraged residents to stop by borough hall to review the budget and ask questions.