Last night, Tyrone Borough Council met in a special meeting that lasted more than three-and-a-half hours to discuss the 2006 budget.
Council had met previously on the issue and called the special meeting when nothing had been decided at their Nov. 14 meeting. The borough was facing a $102,000 deficit in its general fund. Some council members had suggested a tax increase of some type might be needed to offset the deficit instead of using capital reserve funds as in the recent past. Tyrone Borough has not had a tax increase in several years.
At last night’s meeting, three options were discussed. One idea was to cut proposed items from the budget such as a new phone system, codifying the borough’s ordinances, reducing money set aside for improvements to the municipal building, etc.
However, those items were for projects that would be funded by the borough’s capital reserves. Deleting them from the budget would not reduce operating expenses nor would it reduce the deficit. Such a move also would not affect revenues.
The second option was to raise taxes such as the Earned Income Tax, property taxes or the emergency municipal fund tax. The EMS tax is used by many other municipalities and can be set as high as $52. The previous version of the tax was called the occupational privilege tax and is currently passed on to those working in the borough at a $10 annual rate.
If the borough decided to go with an EMS tax at the maximum rate, an estimated $67,200 could be raised. The figure is based on an estimate of 1,600 people who work in the borough.
After nearly two hours, a motion was made to use capital reserves and no tax increase to balance the budget. The vote was a tie at four to four. Council members, Jim Grazier, Don Boytim, Virgie Werner and Mayor Patricia Stoner voted to use the capital reserves to offset the deficit. Council members Jennifer Bryan, Bill Fink, Mark Kosoglow and Bill Latchford voted against the motion. Solicitor Larry Clapper explained the tie vote meant the motion had not passed.
Council decided to take a short recess and some members discussed the options in small groups.
After the recess, there was further discussion with much of centering on the idea of using a combination of a tax increase, particularly the EMS tax, along with some of the money from the capital reserve to balance the budget.
For a time, it appeared none of the council members were likely to change from their original stance. Solicitor Larry Clapper explained that if the borough wanted to go with the EMS tax, the proposed increase would need to be advertised multiple times. It was also explained that the proposed budget had to be made available to the public for 10 days before passing a final budget.
Clapper said the borough could wait until just before the end of the year before passing a budget if that was necessary to comply with the advertising and public availability requirements.
He also explained that council could choose not to adopt the budget by the end of the year. In that case, the borough would operate month-to-month using the 2005 budget until council passed the 2006 budget.
Eventually, Councilman Bill Latchford asked if one of the council members who wanted to use the capital reserve with no tax increase would be open to the idea of a tax increase when the 2007 budget comes up next year. Mayor Stoner will be leaving council, but three members who wanted to use only the capital reserve will remain on council.
One of those members, Virgie Werner, indicated she would be willing to consider the possibility based on where the borough was financially at the time.
At that point, Latchford made a motion to use capital reserves to cover the deficit in the general fund with the understanding there would be consideration of some type of tax increase during next year’s budget discussions. The motion passed five to three with Latchford voting in favor this time.
After the meeting, Mayor Stoner commented on the process.
“I really don’t think anyone wanted to tax the public,” said Stoner. “Obviously, half the group was concerned about going into (the) reserves. People who felt strongly about no taxes felt that we had an adequate amount in reserves. To take $102,000 out of $1,239,000, people felt that was doable, we could handle that.
“They would much prefer doing that than putting the burden on the people,” said Mayor Stoner. “Everyone is burdened. People are being forced to decide if they are going to heat their homes or put food on the table.”
The man who broke the impasse, Bill Latchford, spoke about council’s decision.
“I was looking for open minds,” said Latchford. “Last year, we had a contention with this, but it wasn’t as bad. Seeing that this council was deadlocked, I wanted council to go into next year with an open mind (about an increase). “We really are playing Russian roulette, we spun the wheel and we are dodging this bullet right now. Next year, I don’t know if we will be as lucky to dodge the tax bullet.”
Councilman Jim Grazier was not in favor of any tax increase.
“I can’t see placing any more burden on the community here,” said Grazier. “I’d be naive to think that (things) aren’t going to increase, but if you have the money right now, I can’t see burdening them.
“You either have to increase your revenue or cut services,” said Grazier. “There always has to be that balance.”
He referred to raising taxes as “a last alternative.”
After passing the proposed budget, council decided to cancel its Dec. 5 meeting. Tyrone Borough Council is next scheduled to meet on Dec. 12 when it is expected to consider adopting a final 2006 budget.
