As I was looking through all the local news last week the main thing that stood out was Delaware County townships raising taxes to balance budgets, Newtown, Marple, Edgemont, Millbourne and Rutledge to name a few. Whilst none of us like tax increases the decline in home prices and drop in sales activity of the last year has caused major problems for the townships and the state. Many of these townships had large parts of their budgets depending on Real Estate Transfer Taxes and the drop in prices and in number of sales over the last year has caused major problems for their budgets.
Leaving aside the question of if is wise for these township budgets to depend so heavily on Real Estate Transfer Taxes, the problem has been increased by many homeowners appealing their assesments with the drop in housing prices. Most of these appeals have been succesful, but this just causes the problems to be larger for the townships. As tax revenues plummetted the townships were left to either cut services, increase taxes rates or find new taxes. Many townships have been looking at implementing Earned Income Taxes where allowed, which is unpopular with many. I attended a meeting in Chester County at Easttown Township where local citizens made it very clear this was not what they wanted preferring a hike in the millage to any new taxes.
But we cannot have our cake and eat it as the saying goes. We cannot ask for increased or even the same level of services and also lower taxes. There is a point at which a certain tax level needs to be maintained. This does not mean that budgets can just be allowed to balloon uncontrolled or that services need not be competitively priced and put out for bid, but we must realize that we need to pay for a certain level of services. Whilst our assesments may be reduced, our overall tax burden may not be and that fact is coming home to many.
The challenge for townships, counties and for the state moving forward is to provide the best services they can for the least money, to not allow themselves to become over dependant on one tax, to make sure they are employing the correct people to provide the best services for the best price. To be run like a business and not just fall back on always being able to raise taxes to meet their commitments.
At the same time, I am not sure these townships have taken into account the remaining homeowners who should appeal their tax assesments and how this will affect their revenues. Many did last year, what happens this year if others do as well. Will we see more shortfalls?
