Hanover Approves 38 Percent Property-Tax Hike

Postby Gary Triplett » Mon Dec 03, 2012 6:47 pm

The borough says the money is needed to fund police and fire services.
By CRAIG K. PASKOSKI
The Evening Sun


Hanover, Pennsylvania
Despite a personal plea from state Rep. Dan Moul, the Hanover Borough Council Wednesday night approved a 38-percent property tax increase for next year and voted to advertise its proposed $30.2 million 2013 budget.

The council voted, 8-1, to raise the real estate tax rate by 1.51 mills, setting the rate for next year at 5.50 mills. The increase would mean an additional $250.51 yearly in taxes for the owners of a $165,900 house, which is the average value of a home in the borough. Taxes for that house would increase from $661.94 per year to $912.45.

Moul, who lives in Conewago Township, said he owns rental property in the borough and was concerned about his tenants. He questioned why the borough needed such a significant increase and said it would hurt those in the community who can least afford it.

"Are your expenses going up 38 percent?" Moul questioned the council. "I find that extraordinarily hard to believe.

"People are living hand to mouth. People that are lucky enough to have jobs are living paycheck to paycheck," said the Republican lawmaker.

Moul said the 38-percent increase, along with proposed water-rate hikes and higher taxes on the county level, would force him to raise rental rates.

"We've got to pass that along to some of the poorest people in our community," he said.

Moul asked the council to table the increase in order to re-examine the budget "to see where we can trim some spending."

But Borough Manager Barb Krebs said the council
had been over the budget many times and was at the point where an increase was unavoidable without cutting services. She pointed out it is the first time in nine years the borough will raise taxes.

"The council did a good job of holding off raising taxes until this point," Krebs said. "We cut every possible place we could cut. Unfortunately, we have to raise this year."

She said the borough avoided a tax increase in recent years by pulling money from other accounts, including its cash reserve fund. The borough used roughly half of its $2.6 million in reserve funds this year to balance the 2012 budget, Krebs said. Those funds are needed early in the year to meet payroll before taxes comes in to the borough.

Even with the tax increase, Krebs said, the borough will still need to dip into that reserve fund to make ends meet next year.

With the tax hike, the borough expects to generate $5 million in real-estate taxes in 2013.

That money, Krebs said, is specifically designated to cover police and fire services, which is projected to cost the borough $5.36 million.

"Without raising the taxes, we'd have to cut services," Krebs said.

Driving the need for the increase is a $547,500 rise in health insurance costs, wages and pensions. The borough faces a 20-percent increase in insurance premiums and employee contracts call for a 3½-percent wage increase for firefighters, 3 percent for police personnel, public works and office employees, and a 2½-percent raise for water department workers.

Moul questioned whether borough employees should be getting those raises since the consumer price index is rising only about 1 percent.

Krebs said employees agreed to make concessions in their health benefits to slightly offset those premium increases.

She also pointed out state funding for many items, such as the libraries, recycling and grants have been cut, while the borough is mandated to do a number of projects, including upgrades to the sewer lines and the wastewater treatment plant.

"You, as a representative, know there are a lot of mandates out there," Krebs said.

Moul said he was concerned the increase was coming all at once.

"It's such a big jump at one time," he said. "To raise this 38 percent in one shot could be devastating to them, people that live on the edge."

Councilwoman Heidi Hormel voted against the tax increase, saying she was not given enough information during budget meetings.

"I know we need an increase. I feel I didn't have enough information on it at our last finance meeting," she said.

The proposed budget will be available for public review at the borough office building, and council is scheduled to take a final vote at its Dec. 26 regular meeting.
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Postby Gary Triplett » Mon Dec 10, 2012 11:10 am

There is no matter if speaking of local, state or federal governments... tax RATES only have a need to increase when there is new spending.

In particular, a local government depends greatly on revenue from taxes received from real estate. Real estate values follow directly with economic health and cost of living factors. In fact, when the economy is healthy and a clear parcel of land valued at $50,000 is improved by a new home or business, that same parcel is now worth $50,000 plus the value of the improvements. Therefore, real estate tax income will always increase while tax rates remain the same. Actually, over the course of time, tax rates should decrease as land values increase. In reality, a local government's budget, without new spending, should have a greater and greater surplus. This derived income will always pay a local government's operational expenses throughout time unless new services or operations are incorporated into a budget.

This is really simple math. For a local government to take simplicity and convert it into complication and confusion over a need to increase tax rates and blame it on the need to pay for police and fire is insulting to anyone with intelligence and a small knowledge of economics. There is little more that needs to be said.

Since the local government body has displayed their inability to manage, yet has grown larger and has become unresponsive to the citizens that hired them to represent their interests, it seems time for the people to act.

I recommend the people create and propose legislation and force it to law through referendum. The tools are here on this site to do just that, but requires citizens to be active and involved in the process.

Hanover, Pennsylvania
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Postby mreill01 » Mon Dec 10, 2012 5:14 pm

Can I further suggest that, in addition to proposing more responsible legislation and more realistic budgetary restraint under this poor economy, the people gather together their pitchforks and torches for their (symbolic) march on City Hall? In other words, the enthusiasm, passion, and yes, anger that the citizenry feels should be shown publicly.
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Postby Gary Triplett » Fri Dec 28, 2012 10:36 am

Hanover trims tax hike to 25 percent
Officials decided last week to scale back increase from 38 percent.

By CRAIG K. PASKOSKI
The Evening Sun

Posted: 12/26/2012 10:40:00 PM EST

In the face of vocal criticism from dozens of Hanover home and business owners Wednesday evening, borough council members voted to raise property taxes by 25 percent for next year.

The increase is a half-mill lower than the 1.51-mill rate hike, or 38 percent, the council originally approved last month for 2013. As part of its approval of a $30.2 million operating budget for 2013, the council unanimously agreed to raise the property-tax rate by 1.01 mills, from 3.99 to 5 mills.

After hearing concerns from residents and property owners over the past month, the council agreed at its finance committee meeting last week to scale back the increase to 1.01 mills, which means property owners would pay $101 more annually for every $100,000 of assessed real-estate value.

Despite the reduced increase, citizens Wednesday evening were not satisfied.

"We're at a tipping point here," said Ves Abbott of Grant Drive. "People are being taxed out of their homes.

"Everybody is here because they are overtaxed right now," Abbott said, referring to the crowd that filled the council's basement meeting room. "You need to act more responsibly in your spending."

Abbott and other residents questioned the need for street sweeping and leaf collection services and also suggested the borough turn to an outside company for garbage collection in order to save money.

"I can't pay more in taxes. I love Hanover, but I don't know how much longer I can
stay," said Carl Sprecher of Forney Avenue.

"I would just as soon you guys provide less services and let me keep my money," Dennis Faye said.

Others criticized pay increases police, firefighters and other borough employees are scheduled to receive next year.

"I went a year without a paycheck to protect my employees," said Melissa Harris, who owns Harris Custom Upholstery. "I am looking for the same sacrifices from you."

Some residents requested council members go back over the budget to make cuts.

By law, the council needs to approve a budget by Jan. 1.

After the meeting, Councilman President John Gerken and Councilman Raye Morris noted the council and borough staff have gone over the budget for months and have met publicly on several occasions to discuss the tax increase.

"We labored over this for many months," Gerken said. "We looked at many different things."

Increases in wages, health insurance and utility costs are driving the need for the tax rise, officials said.

It is the first time Hanover has raised taxes in nine years.

Council Vice President Henry McLin told residents, "We had a very difficult discussion last week at the finance committee. We did what we could at the last meeting to reduce the rate."

Gerken pledged that the council will "be looking at all options to reduce spending. Everything is on the table after the first of the year, salaries and services," he said.

But residents pointed out it wouldn't help them once taxes are raised, and some walked out after the vote was taken.

"I don't think they looked hard enough," Harris said. "There is no responsibility of how they get that revenue."
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