Exeter approves 2013 budget with tax increase

News photo by Donna Rovins Exeter's Board of Supervisors held a special meeting Dec. 27 to discuss and adopt the township's 2013 budget. Left to right, supervisors Jeff Bukowski, Ken Smith, Donald Wilson, Gary Lloyd, Dona Starr and Township Manager Troy Bingaman.

Real estate taxes for property owners in Exeter Township will be going up next year after all.

The township’s Board of Supervisors held a special meeting Dec. 27 to adopt a budget for 2013 and to address an end of the year decrease in the township’s expected revenues.

That shortfall in revenues forced the board to reexamine its earlier plans to keep taxes at 2012 levels.

Following a nearly two-hour discussion last Thursday, the board voted 3-2 to increase real estate taxes by 0.175 mils, or $17.50 per $100,000 of assessed valuation. Supervisors Ken Smith and Jeff Bukowski voted against the measure.

The increase brings the total annual tax bill for property owners to $287 for every $100,000 of assessed valuation. The total rate includes the general real estate tax, the Fire Services tax (.505 mils) and the Debt Service tax (.55 mils).

The supervisors had planned to handle the original projected budget deficit of nearly $240,000 by using funds from the fund reserves. But just before the board’s Dec.17 meeting, township manager Troy Bingaman was informed that Earned Income Tax revenues would be $210,000 below projections. His recommendation at that meeting was an increase of 0.2 mils, saying that taking the entire $414,000 shortfall from reserves would put the balance below where it should be.

The township keeps three months’ worth of operating expenses in the fund reserve to cover township expenses for the first three months of the year. Bingaman said it is March 10 before the township sees its first earned income tax payment. Exeter keeps a reserve of $2,348,905 to cover the first three months of the year, and Bingaman said they spent $2,067,000 during that period in 2012. The decrease in the Earned Income Tax is due to reduction due to previous overpayments to the township.

“If you have a rainy day fund I don’t think it’s right to say it’s never raining hard enough to use it,” Bukowski said. “With a last minute estimate of what our EIT revenues are going to be next year, I don’t think going another $200,000 under the three month reserve balance would be imprudent. Would I like to see us come up with savings? Yes. Can we? I’m hopeful that we can next year. I don’t propose raising taxes just so the next tax increase is less painful.”

Supervisor Gary Lloyd initially moved to increase the rate by 0.2 mils, but the proposal failed to get a majority. A second motion to adopt the budget without a tax increase also failed to achieve a majority. Additional discussion settled on the 0.175 option, in combination with using about $160,000 from the reserves.

“I still have a problem with the budget in that the earned income tax indicates to me our residents are not receiving additional income to allow us to raise their taxes beyond where they are right now,” Smith said. “And the problem is not that we don’t have enough revenue, it’s that we spend too much money.”

Smith once again brought up the police budget and the fact that it has been nine years since a contract was renegotiated on what was originally a five-year contract with the police department.

“The economy is not going to increase in the foreseeable future,” said Lloyd. “Unless you have specific cuts to propose to reduce spending which we’ve spent the last couple months doing, we have to generate revenue through a tax increase. I think it’s irresponsible not to.”

While the board did not agree on whether a tax increase was necessary, members do agree that economic development efforts are needed to help increase the tax base in the township, as a way to stabilize the tax rates for residents. The board added $100,000 into the budget for a master planner, to give the township guidance on an economic development plan, although results could be several years away.

“Tax increases are always unpopular,” said board chairman Donald Wilson. “At the same time, we’re looking at it from being fiscally responsive and getting us back to a good footing so we don’t have to come back with a big increase. Fiscally, I had to .”

Following the budget adoption, the board voted to advertise the repeal of the Real Estate Tax ordinance that had been previously approved, and which reflected the lower millage rate. They then passed a resolution establishing a new tax millage rate on real estate taxes.

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