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Tax hike warranted, to a point: Editorial

Posted 11/28/18

For the most part, we do not take issue with a proposed tax increase to which Middletown Borough Council recently gave preliminary approval.

The 2-mill increase would raise the borough property …

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Tax hike warranted, to a point: Editorial

Posted

For the most part, we do not take issue with a proposed tax increase to which Middletown Borough Council recently gave preliminary approval.

The 2-mill increase would raise the borough property tax by about $157 a year for the average homeowner. That’s just $3 a week. We also realize for those living paycheck to paycheck, however, that every dollar counts.

While it might sound appealing that the borough has not increased its property tax since 2008, we would argue that it’s not for the best in the long run. The piper has to be paid eventually. Costs go up. Salaries go up. Infrastructure wears out. More police officers are required. You can’t just cut, cut, cut and expect the borough to be a safe, inviting place to live.

No one likes taxes, but cut enough and Middletown will be a ghost town.

More gradual increases over the last 10 years would be less jarring to property owners, but tax increases are not popular for elected officials who are trying to get re-elected. It is almost refreshing to see Mayor James H. Curry III be a leading advocate for increasing taxes.

“This tax increase has to happen, and it’s not going to be the last one,” said Mayor James H. Curry III, adding that telling borough residents anything else is to “lie to the public.”

He and council member Dawn Knull wanted a 0.5 mill property tax increase last year, but instead council transferred electric fund money to the tune of $1.6 million to balance the 2018 budget.

There would be an increase in borough personnel through the tax increase. The budget calls for adding one new full-time employee for the Public Works department, and adding one new full-time officer for the police department. The budget that increases property tax by 2 mills also includes funds to promote one of the police department’s current full-time officers to detective. That would give the police department two detectives; one is not enough to meet the caseload, according to interim Police Chief Sgt. Dennis Morris.

Council also hopes that adding a second detective can help reduce the amount of money now being spent to cover police department overtime.

The tax increase and overall budget do not become final until a final council vote, likely to happen Dec. 4. The borough by state law must have a balanced budget in place by the end of the year.

Also keep in mind that the budget that council preliminarily approved cuts spending by 5 percent across the board below 2018 budgeted levels for all “discretionary” accounts. Discretionary means anything council has the ability to cut. So this is not taxing without some level of financial responsibility.

What concerns us a bit, however, is that Curry uses the multiple lawsuits that the borough is involved with to help justify the tax increase.

“We have eight or nine lawsuits pending against the borough,” Curry said during the Nov. 8 council budget meeting, as related in a story on today’s front page. “You can watch the spending but the more we get sued … you can’t control that.”

That’s not entirely accurate.

The borough initiated four of the 10 lawsuits. In just about six months, the borough has spent $500,000 on two law firms directly tied to litigation over the Suez water and sewer lease. The borough is not happy with the terms of the lease and is trying to get it changed or even possibly get out of it all together. It also is suing its former solicitor and financial adviser over advice given to the borough about entering the lease — advice that the borough now argues was faulty.

You can control that. While that $500,000 is not coming from money budgeted for legal fees, it is coming out of a separate water and sewer fund account that comes from water and sewer revenue that the borough received before the lease with Suez began on Jan. 1, 2015.

The holdover water and sewer fund has a balance of about $1.2 million, and it can only be used to pay for things directly related to water and sewer issues. It seems like a stretch to use it on litigation. And that’s $500,000 — so far — that could be used on infrastructure improvements instead of what we consider an unwarranted lawsuit against Suez.

Or perhaps money from the fund could be used to help residents pay the higher water and sewer bills, which is the reason for the Suez lawsuit.

If you have concerns or questions, there is still time to voice them. Attend the meeting Dec. 4 at which the council likely will vote on the budget. Also, you can inspect the budget on the borough website or by going to the Municipal Building at 60. W. Emaus St. during normal business hours.

No one likes tax increases, but if they are done responsibly, we must learn to live with them.