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Council approves tax hike, draft budget

By Miles Layton jmlayton@heraldstandard.Com 4 min read

CONNELLSVILLE — City Council approved the first reading of a 1-mil real estate tax increase and adopted a preliminary budget during Monday’s special meeting.

Council members Aaron Zolbrod and Brad Geyer, along with Mayor Greg Lincoln, voted in support of the tax increase, while councilmen Tom Karpiak and Gregory Ritch opposed the measure.

Council approved a $3.1 million draft budget for 2015 that includes salary increases to city employees. The final budget is poised for approval in December.

Union contracts call for a 2-3 percent salary increase for most employees. Though council unanimously approved increasing salaries, there was a 3-2 split in support of the preliminary budget, with Zolbrod, Geyer and Lincoln voting in favor, and Karpiak and Ritch in opposition.

City Treasurer Judy Keller said a 1-mil tax increase equates to $1 for every $1,000 of assessed value for property. For example, taxpayers with property assessed at $30,000 would be pay $30 a year more in taxes.

Keller said she understands that tax hikes are “a tough pill to swallow” for everyone, but they are necessary to balance the budget.

Ritch said, “We cannot continue to tax ourselves into prosperity.”

Zolbrod said if there is no appropriate action to keep the city’s finances in order, the state could intervene and make cuts regardless of council’s wishes. He said council should take action instead of “crossing our fingers” and hoping everything works out for the best.

With regard to the city’s finances, Karpiak added, “I didn’t put the writing on the wall, I’m just reading the writing on the wall.”

Karpiak said the key to the city’s continued growth is to broaden the tax base and not raise taxes that would threaten that growth.

“As taxes go up, income goes down, so we’re all going to take a hit,” he said.

Geyer said council needs to work harder and smarter as well as unite behind making the sacrifices needed to keep the city’s finances in order.

“If we don’t want to continue to raise taxes, we need to come together,” he said.

Geyer said because it was the first reading of the draft budget, there is still time to make some changes that could reduce expenses

Keller said expenditures have increased by about $153,000 from the 2014 budget cycle, but revenue remains flat. She said the police department’s budget increased about $97,000 from $1,384,000 to $1,481,000; public works/street department with a $22,000 increase; and miscellaneous expenses are expected to increase $40,000.

Keller reminded council about the $675,000 debt the city owes to Scottdale Bank. Keller said part of the reason for the $153,000 increase from last year’s budget can be attributed to the $80,000 that council designated to pay against the principal on that loan. In addition to that figure, council has dedicated $10,500 toward the interest on the loan.

Keller said the city needs to get this loan paid off as soon as possible because the interest payments are eating into the budget to a tune of $1,000 a month. She said for the last two years, the council has had to borrow more and more money from the bank to keep the budget balanced.

“This has been a snowball gathering momentum,” Keller said after the meeting. “The city is in a predicament with this debt. They have got to get out of it or there will be continue to be consequences.”

Since 2007 to end this year, Keller said, the city has paid about $95,000 in interest payments.

“Imagine what else we could have done with this money,” she said.

In other business, council approved:

n A resolution that provides $11,000 toward the purchase of playground equipment for a park in the south side of the city. This money does not taxpayer funds. These funds will be added to $10,000 state grant from the Redevelopment Authority.

n A resolution that extends the lease of the between the city and the Connellsville Senior Citizen Board and the Connellsville Senior Tigers for a period of four years. The lease’s effective start date was July 1 and will terminate June 30, 2018.

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