Budget tabled as Tyrone Council rejects earned income tax increase

No action was taken last night when it came time for Tyrone Borough Council to vote on the town’s 2007 budget.
Instead, any decision on the budget was tabled. The reason? The council had already voted down an earned income tax increase, which was part of the basis of balancing the budget.
Earlier in the meeting, borough solicitor Larry Clapper conducted a hearing about two ordinances to increase the earned income tax and to impose an EMS/local services tax of $52 on people who work in Tyrone. There was no public comment during the hearing.
The ordinances were presented to council and vice president Bill Latchford made a motion for the adoption of an increase in the EIT from .75 percent to 1.25 percent. Mayor James Kilmartin asked for a second on the motion and when no other council member seconded the motion, Kilmartin made the second.
A roll call vote was taken and the motion failed by a five to two vote. Kilmartin and Latchford voted in favor of the tax increase while council members Don Boytim, Jennifer Bryan, Bill Fink, Jim Grazier and Virgie Werner voted against it. Councilman Steve Hanzir was not present.
Council then voted on the local services tax ordinance. Latchford made the motion for adoption and Bryan seconded the motion. The ordinance passed by a four to three margin with Bryan, Kilmartin, Latchford and Werner voting in favor and Boytim, Fink and Grazier voting against it.
When it came time to vote on the budget, Solicitor Clapper said council would need to amend the budget to reflect money from its capital reserve to balance it in order to make up for the projected revenues from the proposed tax increase that council had rejected. Council had already planned to use some money ($51,200) from its capital reserve to balance the money. It also planned to raise certain fees it charges for services to increase revenue. Clapper suggested to council its other option to balance the budget would be layoffs or a cut in government spending.
Latchford asked council members “what happened” and asked council members who voted against the earned income tax increase to “speak up.”
Bryan said she wanted to look at line items in the budget.
“I think we should have more control of the spending,” said Bryan.
Latchford responded by saying, “so you want to micromanage the borough.”
Bryan said she was “not totally” against a tax increase. However, she indicated council should look at things such as money earmarked for the purchase of a new police car.
Latchford said he believed the council had come to a “compromise” when it put together its proposed budget by using a combination of tax increases and using some capital reserve to balance the budget. In recent years, council had decided to use capital reserves and no tax increase to balance its annual budget.
Solicitor Clapper informed council if no final budget was adopted by Dec. 31 then the borough would continue to operate based on its 2006 budget on a pro-rated month to month basis. Such a move requires no action from council since it is stated in the borough’s home rule charter. Council also tabled motions on 2007 compensation and other fees and taxes.
Councilman Boytim said he had been approached by people regarding the tax increase who thought council had not made enough of an effort to cut line items in the budget.
“We represent the people of the community and if they ask us to try to go back and take another look at it then it’s our responsibility to go back and take another look at it,” said Boytim.
Mayor Kilmartin wanted to know how many people had approached Boytim with their concerns. Boytim said he had been approached by 10 to 12 people in the last week or 10 days.
“So, 10 people out of 5,000 people make this decision,” said Kilmartin.
“We’re less than 10 people and we’re making the decision,” responded Boytim.
Council agreed to hold a public meeting on Wednesday, Dec. 20 at 6 p.m. in all likelihood to further discuss its 2007 budget.
After the meeting, Kilmartin called council’s rejection of the EIT increase “eye-opening” and “a bit frustrating” since most council members had appeared to be in favor of the increase when the proposed budget was put together.
“I’m not opposed at all to go line by line and look at things, but that’s why we have a borough manager,” said Kilmartin.
He noted the borough had not increased taxes in 10 years and said “we’re bound to.”
Kilmartin said, “We are going to have to do something. We have to change some things. The decisions we have made over the last several years have put us into this place so we need to definitely do some changing.”