COAL TOWNSHIP - Facing a deficit greater than $190,000, Coal Township Commissioners plan to raise taxes to cover one-third of the shortfall in the 2012 budget and make up the remaining difference with money from the township's reserve fund.
The proposed budget estimates revenue at $2,825,118. Estimated expenses exceed that total by $191,442.
The tentative tax increase could generate approximately $64,000 through a 3/5 mill increase in the real estate tax and a 25 percent increase in the occupational assessment tax.
Increased tax revenue combined with funding from the township's reserve fund, which stood at $396,448.03 through Oct. 31, would make up for the shortfall.
The township commissioners in attendance Thursday night - chairman Gene Welsh, George Zalar, Craig Fetterman and Gerard Waugh III - voted in favor of passing the tentative tax increase and budget. Commissioner Paul Petrovich was absent.
The plans are now up for public review for 30 days. Final versions of the tax rolls and budget for next year must be passed before the new year, and they can also be adjusted before then. The next scheduled meeting of the board is 7 p.m. Dec. 8.
The commissioners spoke at length about the pains of raising taxes, often noting the recent increase in sewer rates township residents incurred.
There was some debate about not raising taxes at all. However, the commissioners discussed gambling on the unknown - mostly Mother Nature. Fetterman said last winter's storms walloped the township's funding, and that was before a pair of flood events in September caused thousands in damage.
By raising taxes slightly, they hoped to avoid a significant single tax hike down the road and also avoid being unprepared should a major unexpected expense occur. They also sought to balance the burden among both homeowners and those subject to the occupational tax, rather than simply raising the real estate millage.
"I just feel that everyone should pay their fair share rather than just property owners," Welsh said, to which several commissioners agreed.
However, Zalar did note that while the planned increase of the two taxes is mild, it also hits some people twice.
That said, he said the plan avoids having services cut.
"A municipality without services is a non-functioning municipality," Zalar said.
Welsh said he'd prefer increasing the earned income tax (EIT) rather than real estate and the occupation tax. However, that would call for a referendum with voters deciding whether to abolish the occupational tax altogether and transfer that burden to the EIT, a move believed by some to actually save many taxpayers money.
A referendum could not be brought to vote for another two years, solicitor Vince Rovito said.
The proposed tax hikes would bring the real estate tax to 15 mills, which could generate an additional $26,000, while the occupational tax would be 115 percent and could generate an additional $34,000.
One mill of assessed real estate tax equals $45,000 revenue. However, considering delinquents, actual revenue is about $44,000. That's a much greater revenue stream compared to the occupational tax, which generates $1,500 for each percent.
Regarding the occupational tax, people who are retired, a student, unemployed or on total disability, among others, will see no increase. They'll continue to pay $5 to each the township and Northumberland County.
Those who fall under the "50 assessment," a custodian, clerk, cook or waitress, for example, would pay $5 to the two taxing bodies along with 115 percent of $50 to the township, which would be $57.50. In all, they'd pay $67.50 compared to $55 under the current tax rate.
Residents are also assessed at 75, 100 and 150, and can use the same formula to determine their respective estimated hike in occupational taxes.
As for the real estate hike, that tax is levied against half a property's assessed value.
Each mill equals $1 for every $1,000 of half the assessed value.
For a property with an assessed value of $5,000 under the proposed 15 mill rate for real estate, a tax of $75 would be assessed. That's compared to $72 under the current millage rate of 14 2/5 mills.