Supervisors Approve 2012 Preliminary Budget With 6.5% Tax Increase

NEWTOWN SQUARE–Newtown Township Board of Supervisors voted unanimously to approve the proposed 6.5 percent tax increase in its 2012 preliminary budget on Monday night.

The average homeowner–with a home assessed at approximately $250,000–will look to pay $650 a year in real estate taxes, an approximate $41 increase from what they're currently paying at $609.

Previously, but voted 4-0–with –Monday night to approve the increase in real estate millage per 1,000 from 2.4397 to 2.6 in the preliminary 2012 budget as well as an increase in the hydrant tax from 0.064 mills to 0.1 mills and an increase in the street light tax from 0.25 mills to 0.4 mills, totaling to 3.1 mills overall.

According to Larry Fischer, special assistant to the township manager, essentially everyone in the township pays the hydrant tax but only a handful pay for the street light tax (homes who sit on streets with street lights).

At their last budget meeting, Fischer said both the hydrant and stree light taxes have not been raised in five years and, "Yet the cost to maintain the street lights has gone up every year."

In the new proposed budget, Supervisor Edward Partridge suggested taking out $40,000 off the Central Delaware County Authority's bond payment which was budgeted for $312,360 and $50,000 out of the highway/street overlay project which was budgeted for $100,000. In addition, Partridge suggested increasing the sale of property $50,000 more in the revenue line.

During the beginning portion of the budget discussion, supervisors also approved 3-1–with Supervisor George Wood abstaining from the vote as he noted he was related to the vice president of the Central Tax Bureau of PA, Inc. and Houldin holding the lone nay–to hire the Central Tax Bureau of PA, Inc. (CenTax) as their tax collector.

Michael Hill, vice president of CenTax, made a presentation at last week's budget meeting, requesting a proposal for service in collecting the local service tax in the township. According to Hill, Delaware County will soon be under Act 32, as authored and authorized by the Pennsylvania legislature. Act 32 requires all school district and municipalities to change from individual district based Earned Income Tax (EIT) collections to a county-based system. In 2008, the state allowed an EIT exemption for those earning less thatn $12,000.

CenTax, currently the county's tax collection group, will provide data of those not currently paying the EIT in the township with the "sophistication of their software" will be able to "increase the collections of Newtown Township for local service tax," according to Hill.

"We're confident based on our past experience and having the background of Delaware County that we could certainly increase your collections," said Hill.

Hill said CenTax will charge 1.65 percent of the township's net collections. The township currently collects roughtly $470,000 in local service tax in which Hill said in the first year he would expect a "bump" in collections.

At the same meeting, Marie Richards, the township's tax collector for the past 10 years, said she would be willing to work with the township manager and Fischer to institute a better system on local service tax collection and offered to reduce her salary from $7,500 to $6,500.

In the 2012 preliminary budget, the township has estimated a projected cost of $9,075 to CenTax. According to Fischer, the contract with CenTax would be based on a three-year term with an option to leave 90 days after the first year.

"My opinion is that they have the resources for us to potentially collect more," said Supervisors Chairman Joseph Catania in regards to hiring CenTax. "It would be my opinion to try them for a one-year period."

Fischer said the township is anticipating a collection of $550,000 in local service tax but Supervisor George Wood was skeptical on the anticipated $80,000 increase from its current collection of $470,000.

Fischer said that they would be able to find more collections in the next year by finding new employees in the township to collect the local service tax and finding employees who have not been paying that tax in the past. To make up that $550,000, the township would have to find 1,538 more employees who fall within those two categories.

"How in the world are we going to do that?" asked Wood. "I think it would be fair that we really should lower that number and hopefully be surprised that we're going to hit it."

Wood proposed to lower the budgeted lower service tax number from $550,000 and budget it for no increase from its current collection number of $470,000. Fischer agreed and believed it was a "conservative" approach to the budget.

Catania made the motion to hire CenTax as the township's tax collector, which was seconded by Partridge.

The Board of Supervisors will look to approve the final 2012 budget on Thursday, Dec. 22.