ALLENTOWN, Pa. - Allentown residents would see a property tax increase for the first time in 13 years under the proposed 2019 budget presented to City Council by Mayor Ray O’ Connell on Monday.
In his presentation, O’Connell said the tax increase was needed to, among other things, address a $6 million deficit.
He added the city’s bond rating had been recently downgraded due to continued budget deficits, a decline in reserves and a contingent liability risk from several pending lawsuits.
The $116 million budget would raise taxes by 1.5 mills, an increase which would generate an additional $7.6 million in revenue for the city. The increase would also result in a $1 million surplus.
A homeowner with a property assessed at $150,000 with a land value of $20,000 would see an annual property tax increase from $903 to $1,139, or about $20 more a month.
The increases would be smaller for low-value properties and greater for more expensive properties, O’Connell said.
The expenditures for 2019 would total $115 million compared to 2018 revenue of around $109 million, which would create a $6 million deficit.
The deficit would be covered by the tax increase.
The budget calls for two additional firefighters, bringing the total fire staff to 125.
Non-union city employees would see wage increases of 3 percent in 2019. The cost for those increases would be about $330,000, city finance director Brent Hartzell said.
The city’s police and firefighters would see a 3 percent increase in their salaries as part of their collective bargaining agreements, he said.
Service Employees International Union workers will get a 2 percent increase in January and a 1 percent increase in July, he said.
The cost of paying the city’s union employees, who make up around 80 percent of the city’s general fund employee costs, would likely rise by more than $1 million, he said.
Hartzell said an exact figure would be presented at a future meeting.
Lifeguards and summer recreation program staff would see their wages go up. This would further the city’s goal of fully staffing the city’s pools to ensure safety, O’Connell said.
O’Connell said he anticipated the city would need to pay for nearly $2 million in capital and IT equipment costs. Also adding to general fund costs was the transfer of a few positions from the Trexler fund to the general fund.
After the presentation O’ Connell said the relationship between the council and the mayor’s office has improved, with a “greater focus on policy and fiscal responsibility.”
“The citizens of Allentown deserve nothing less,” O’Connell said.
O’Connell stood up and turned to members of the city’s administration seated behind him, thanking them for their hard work in helping craft the budget.
Residents told the council the tax increase would be unaffordable for many.
Resident Pedro Rodriguez said lower-income people would struggle to afford the higher tax. He said he already struggles to make tax payments.
Resident Lou Hershman said many could not afford the tax increase. He said the council should consider other ways to raise revenue and cut costs.
Edward White said he hoped the budget would focus on public safety and ways to address property blight.
The council will hold several budget hearings in November. It has until Dec. 15 to approve or amend the budget.
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