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BUTLER - Council adopts 2008 budget, but public mum
(by April Plantamura - Staff Writer - May 29, 2008)
BUTLER - Members of the Borough Council recently voted to adopt the 2008 municipal budget, with little input or questions from the public.
The council held its open public hearing for the budget on Tuesday, May 20 but only one borough resident was present to inquire about the approximate $10.3 million budget. Robert Norman asked the council members several questions regarding their efforts each year to keep the tax increase low.
The borough’s Chief Financial Officer (CFO) Jim Kozimor said that this year’s tax levy is an estimated $5.6 million.
The borough’s net assessed value is $739.6 million, with the average home being assessed at an estimated $253,600. Each time the council increases taxes by a penny per $100 of assessed value it raises about $73,960.
To pay for this year’s increased expenses the council needed to raise the municipal property tax rate 5.9 cents per $100 of assessed value.
Based on these figures, the average property owner will be paying $1,943.89 annually in municipal taxes. This is an increase of $148 from last year, when the budget was approximately $9.8 million.
“The tax rate figure is still subject to change,” Kozimor said. “We are hoping that the state will restore some of its aid (to the borough).”
Norman asked the council whether the newly developed River Place Condos on Main Street was considered when assessing the borough and calculating the taxes.
“They (the condos) were not completed by September, when the assessments are done,” Borough Administrator James Lampmann said.
Kozimor explained that any new construction, whether it be new condos or an addition on someone’s home, must be completed by Oct. 1 to be included in the following year’s budget. Kozimor said that if the River Place Condos were completed, for example, in February 2008, they would not be included in the 2008 budget, because they missed the cutoff date of Oct. 1.
“But when they get a bill, it will cover the taxes owed from the time of the construction’s completion, in February for example,” Kozimor said. “Even though it is not calculated into the current year’s budget, it will be additional revenue coming in. In the end, the people will pay the taxes they were supposed to pay.”
River Place contains 68 condos, which Lampmann estimated might contribute approximately $5,000 per unit to taxes, or an estimated $340,000. Lampmann said that this figure must be split among the school, county and borough. He said that the council will not receive any figures from the county until after the borough submits its budget to the state.
Kozimor said that Butler is currently receiving $1.117 million in state aid, compared to last year’s amount of $1.407 million. The CFO explained that the municipalities submit their budget to the state before the state has finished balancing its own budget. Kozimor said that because this is the first year that the state reduced its aid to municipalities, it was a slight challenge to create this year’s budget.
“They (the state) tell us (the municipalities) to just count on getting what we got last year,” he said. “The state will be restoring $30,000 of what was reduced.”
Kozimor said that the bulk of the borough’s tax increase was a result of both the reduction in state aid, as well as the increase in the borough’s pension costs, an issue that the CFO said many towns and municipalities are struggling with. Kozimor said that if not for these two factors, the borough’s tax increase would have been significantly less.
“If we received the same amount of state aid and our pension costs were flat, our increase would have been three-quarters of a penny,” Kozimor said.
The CFO said that the borough is doing very well, overall, with the spending and costs that it actually has control over. Norman thanked the council members and Kozimor for explaining the budget in detail.
“I wish it were less, but you explained it well and I thank you for that,” Norman said.
Kozimor said that because the borough is still waiting for final word on how much money it will be receiving back from the state, the council might need to hold another public hearing.
“If we are only changing the budget due to state aid, then we don’t need an announcement,” the CFO said. “But, if we do need an amendment (to the budget), then we would have a hearing just on that amendment.”
The next public hearing for the 2008 municipal budget is scheduled for the next regular meeting of the Borough Council on Tuesday, June 17 at 7:30 p.m. in the municipal building. The state’s deadline for finalizing its budget is July 1.
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