Connellsville may hike tax
CONNELLSVILLE – It appears council is poised to enact a new tax rate that will affect those working in the city. Councilman Bruce Jaynes, who oversees the Department of Accounts and Finance, has informed his fellow council members in a memorandum distributed last week that when the panel meets today in special session he will be requesting its support to replace the in-place $10 Occupational Privilege Tax (OPT) with a $52 combined occupational and emergency service tax.
In November, the state legislature amended the Local Tax Enabling Act to permit municipalities and school districts to impose a tax that would fund emergency agencies and help defray road maintenance costs incurred by cities, boroughs and townships, or reduce property taxes, said Greg Morgan, spokesman for the state Department of Economic and Community Development (DCED).
The Emergency and Municipal Services Tax (EMS tax) replaces the Occupational Privilege Tax, he added.
“The initial purpose was to help Pittsburgh and the financial problems that city was having,” said Morgan. “It was later determined that all municipalities could opt into the program.”
Morgan said that while municipal budgets are enacted by Dec. 31, the city budget could be revised at any time to impose the EMS tax.
The city’s tentative spending plan, approved last month, did not include the new tax ordinance nor the revenues Jaynes speculates will be garnered from the tax.
“I had brought the issue to council a couple of months ago, but at the time, the state legislature had yet to approve it,” he said concerning the end-of-year announcement. “I’m putting it out there for a vote; I hope it works out.”
If approved, Jaynes anticipates an additional $168,000 will be generated through the $42 increase.
“It’s a working tax. It’s not going to affect the retired citizens on a fixed income or the children,” he said.
Jaynes said that the budget to be presented to council today would reflect the additional income.
“In order to balance the budget, the additional (tax) revenue will be subtracted from the amount taken from the sale of the Widewater property,” he said.
To avoid a property tax increase, council opted to utilize $275,541 received from the sale of city property to Widewaters Development Group Inc. to balance the budget. The city agreed to sell the Route 119/201 located property for $350,000.
If the tax initiative is approved, the amount taken from the sale proceeds would be decreased to $109,041, said Jaynes.
City Treasurer Judy Keller said Tuesday that Jaynes did not contact her in advance of the memorandum about the taxing initiative.
“I would have hoped council would have eased into it over a couple of years,” said Keller. “No matter how you slice it, you’ve raised people’s taxes.”
Jaynes, meanwhile, said Keller’s “accurate” record keeping of incoming revenues plus the generation of additional dollars through the EMS tax will allow the city to operate solely on tax income rather than tapping into surplus funds to balance the budget.
“It was not my original intention to use such a large chunk of the money we received from Widewaters,” said Jaynes. “I wanted that to be set aside for capital improvement projects, but at the time I didn’t have any other choice.
“No one wanted to hear anything about raising property taxes or cutting municipal services. If the EMS tax is approved we’ll be able to keep about $102,000 in the general fund that can be spent on projects.”
Jaynes added that the generation of EMS revenues coupled with the increase of in-place tax collections, the city might avoid a property tax increase for 2006.
“With the (implementation of the) EMS tax, we could also be in a good position next year,” he said. “I’d like to see the city operate on tax dollars only.”
The meeting will be held at 4 p.m. at the municipal building.