POTTSTOWN — The borough’s $69 million draft budget for 2025 carries a property tax increase of nearly 5 percent.
Borough Manager Justin Keller and Finance Director Marley Boone reviewed the budget draft during the Oct. 9 council work session.
As things stand now, the 2025 budget is at a deficit of $581,858 and so a millage increase of 0.726 mills, or 4.97% over the current tax rate, would be needed to close that gap. That deficit figures includes $300,000 being transferred from reserve funds to help close the gap.
That would bring the millage to 15.335 mills and would translate into a tax hike of $72.63 for the owner of a property assessed at $100,000.
The budget also proposed a 12 percent increase in trash fees, or $45 per year, to help make up a $177,000 deficit in the $3.8 million trash fund. The increase will help reduce the amount of reserve funds used to close the gap in the trash account by $173,450, Keller said.
The primary causes of the increase are several, according to a budget presentation presented to council.
Keller said they are 3.5 percent raises for management and the workers represented by the American Federation of State, County and Municipal Employees; as well as an increase of $445,951 in pension payments; and maintaining the practice of setting aside $300,000 every year for the capital expense reserve.
There is also a $117,000 increase for the 401a plans for newer workers which replaced the old-style defined benefit pensions plans for long time workers. Keller said a change in how pension contributions are calculated, called “smoothing,” which was approved by council last year, is saving taxpayers $1 million in pensions costs.
The budget calls for a $65,000 increase to help with the demolition of blighted properties and to deal with “issues of the unhoused.”
Councilman Ryan Procsal, who is on the borough’s blighted property review committee, said he welcomed increased funding “for problem properties.”
The budget calls for the replacement of two police vehicles and renovations to the police offices, 50 percent of which will be paid by funds from the Drug Enforcement Administration.
The borough also plans to purchase three new hybrid vehicles for Administration, Public Works, and Utilities Department fleet replacement.
Renovations are also planned for the licensing and inspections office, where additional employees are planned. Rental inspections and building permit revenues continue to rise from last year’s budget and while the volume of real estate sales has dropped from last year, the increased sale prices have kept the revenue from real estate property transfer taxes consistent with previous years.
The presentation notes that the 2023 Housing Report from Montgomery County reported that 385 units were sold with an average sale price of $205,000. A median sales change of $20,000 or 10.8 percent. As a result, the borough’s total assessed property value actually rose over the previous year.
Also, five additional properties were taken off the tax rolls after being acquired by non-profit entities. That brings the total number of non-taxed properties in the borough to 242, bringing the total tax revenue lost as the result of tax-exempt property ownership to $2,428,355.
The budget also includes $500,000 toward the replacement of an aging fire engine at North End fire company, and $927,000 for seven construction and maintenance projects at area parks, as well as the replacement of the gym floor at the Ricketts Community Center.
In previous years, estimated tax hikes have dropped as the budget season progresses and more exact information replaces estimates. In the last four years, the borough has not raised taxes above 3 percent.
