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Tyrone Borough heads into 2007 without passed budget

Tyrone Borough Council met last night to discuss its 2007 budget.
After a nearly two-hour meeting and a review line by line of the proposed budget, council decided the borough could do without a new police vehicle with a $25,000 price tag that was slated to be purchased next year. Council also agreed to cut $1,200 in donations the borough makes to various youth sports organizations. Councilman Bill Fink had proposed the idea. Other possible cuts were discussed by various council members such as holding off on the purchase of a new street sweeper ($85,000), waiting to replace the retiring highway superintendent ($39,500 annual salary) and council members forfeiting salaries. But in the end, none of those moves were agreed to by the council.
Going into last night’s meeting, council had reduced a 2007 deficit to $95,400 by deciding to use a $52 local services tax starting in 2007 and by dipping into its capital reserves for an additional $51,200. Previously, the borough had used a $10 occupational tax. The local services tax replaces it.
The borough had also advertised an ordinance for an increase in its Earned Income Tax by .50 percent from .75 percent to 1.25 percent as well as proposing an increase in certain fees it charges for services. The funds generated from such an increase and the other proposed moves (the local services tax, fee increases and use of reserves) would have balanced the budget.
However, while council passed the local services tax ordinance by a 4 to 3 vote on Dec. 11, it rejected the EIT increase ordinance by a 5 to 2 count. At that point, passage of the budget was tabled along with a vote on fees and other taxes.
The removal of the police vehicle purchase (a capital item) and the $1,200 cut in donations (from the operating budget) still left the borough with a deficit of $69,200. Councilman Bill Latchford wanted council to consider passing the budget with the changes made last night. He also proposed directing solicitor Larry Clapper to readvertise the ordinance for .50 percent increase in the EIT as was reflected in the budget when it was tabled earlier this month.
Such a move would not necessarily cover the remaining deficit since the amount the borough would collect will depend on when it was imposed. When the borough would receive the money would also be affected because a Dec. 15 deadline to inform the state about the increase had passed. Once the state is informed the information is officially given to employers who would then be required to collect the tax. If Tyrone does eventually pass an EIT increase, Clapper indicated the next deadline would require employers to start collecting it in July. Some employers might start to withhold it sooner if they have independent knowledge of such an increase. Taxpayers would be responsible for any amounts not withheld by their employers with the tax increase becoming effective upon passage.
Jennifer Bryan proposed the idea to hold off on passing the budget while the borough is still in negotiations with union employees other than its police department. A consensus was taken and council agreed to hold off on both passing the budget and the advertising of the EIT increase.
Council’s next scheduled meeting was for Jan. 2. However, council decided to cancel that meeting and its next scheduled meeting will now be held on Jan. 8.
Short of holding a special meeting before the end of the year, the borough will go into 2007 without a passed budget. There was no indication that such a meeting was going to happen by year’s end.
Instead, by the provisions in its home rule charter, the borough will continue to operate in 2007 by pro-rating costs on a monthly basis under its 2006 budget until such time as the 2007 budget is passed.
“The disappointing thing is we are not moving into 2007 with an official budget,” said Mayor James Kilmartin after the meeting. “I’m optimistic it will done in January.”
After the meeting, Council vice president Latchford said, “I don’t think the contract negotiations had anything to do with it and I don’t think they should have been brought up for any reason.
“There was no reason to not act on this,” said Latchford. “Whatever happens in the union negotiations, it has a bearing, but not enough bearing to hold off (on) everything. If you’re going to do an EIT (increase) why not get it started as soon as possible.”