Belt-tightening measures help McCandless avoid tax hike for 16th consecutive year
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McCandless has approved a budget for 2021 that will avoid a property tax increase for the 16th consecutive year by reducing spending to make up for an expected dip in revenue because of the coronavirus pandemic.
The nearly $16.3 million general fund budget approved unanimously by council on Dec. 21 anticipates that revenue from the tax on real estate will rise slightly because of increases in the assessed values of properties because of improvements as well as new construction and changes in assessed value after the sale of a property.
The town expects to collect $3.335 million from the real estate tax, which is $110,000 more than this year.
Money from the 1% tax on the sale of the property also is expected to increase to $1.5 million, which is nearly $500,000 more than was budgeted for 2020.
By leaving the property tax rate at 1.236 mills in 2021, McCandless residents will continue to pay a little less than $1.24 for every $1,000 of assessed property value, or $248 a year for a home valued at $200,000 to fund municipal operations and services.
The last time McCandless raise the rate used to calculate property tax bills was 2005.
While revenue from property taxes and sales will increase, money generated by other levies are not expected to fare as well because of the business shutdowns caused by the coronavirus pandemic.
The town’s half of the 1% tax residents pay on their earnings is expected to bring in $5.9 million this year, which is the single largest source of revenue. Money collected from the tax is split with the North Allegheny School District.
Town officials expect that amount to drop by about $150,000 in 2021 because of job loses, furloughs and an expectation that many employees will receive smaller bonuses next year because of the economic climate, manager Bob Grimm wrote in his budget address to council.
Revenue from the various licenses and fees businesses pay also is expected to drop by more than $60,000. The town also expects to collect $57,000 less next year from local sources such as services provided to the North Allegheny School District and of the county’s Regional Asset District tax.
The town also expects to receive less money next year from state grants.
To help balance the 2021 budget, the town plans to spend less on road paving and will slow down the pace 0f work to upgrade the municipal building.
“The most significant impact is that we are proposing to substantially cut back road paving for the year,” Grimm said. “This will impact the 18‐year paving program, but if we are to be in a position to fund capital improvements in succeeding years, we felt that (paving) was an area to have the most financial impact.”
Other cost-saving measures to address the expected reduction in revenue include leaving vacant one police officer and one public works position that opened because of retirements.
Vehicles in the town’s fleet also won’t be replaced next year to save money. Plans also call for leasing excavation equipment that can be used by town employees instead of hiring a contractor.
Grimm noted that if revenue comes in higher than expected, some of the things that have been scaled back to save money could be restored.
“The economic impact of the pandemic has greatly impacted this budget and created a situation where some very hard decisions had to be made to present a responsible, balanced budget,” the manager said. “Given those hard decisions, if we find ourselves with higher than expected revenues during 2021 we can consider additions through a budget amendment.”