Rising costs, Pa. budget impasse, behind county tax hikes

Hundreds of thousands of property owners in the region stand to pay more in real estate taxes in 2017, as counties across Pennsylvania continue to grapple with the rising cost of services - and continued fallout from last year's state budget impasse.

Chester County already has approved its first tax increase in five years, and Montgomery County is considering a more substantial increase. The hikes would affect only the county portion of the tax, not the towns' or schools' part.

Counties are facing increased pressures to fund services - particularly human services, said Lisa Schaefer, director of government relations at the County Commissioners Association of Pennsylvania. Higher demand has combined with lingering effects from the 2015-16 budget impasse.

"Our counties work very hard and pride themselves on not increasing property taxes until it's absolutely necessary," Schaefer said. "It's not a decision they make lightly."

For nine months, until March of this year, Pennsylvania was without a budget, as Democratic Gov. Wolf and the Republican-led legislature clashed over virtually everything, including pensions, liquor privatization, and school funding. The partisan gridlock eventually fell on the shoulders of local governments, as many were forced to dip into their reserves to keep human services from halting.

"Our counties are still seeing the lingering effects of last year's budget impasse," Schaefer said. "Big chunks of [county] budgets are human services . . . and each of those are seeing increasing caseloads, especially with children and youth."

The fallout is being felt in two of the state's wealthiest counties.

In Chester County, officials approved a nearly 5 percent increase Thursday, marking the first hike in five years. For residents owning a home with the county's median property value - just over $300,000 - the hike translates to about $34 more per year.

The hike is expected to generate about $7.5 million for Chester County, money that commissioners say will go toward capital projects, including public-safety improvements, such as a firing range for police officers set to open in January 2018; the new emergency voice radio system; and upgrades to the emergency dispatch system.

In Montgomery County, property owners are expected to see an 11 percent tax increase - the second straight increase after years of holding the line. The jump would add about $66 to the annual bill for the owner of a $300,000 home, the county average.

County officials have said they had unexpected expenses and loss of revenue this year, including rising health-care costs and the loss of a contract to house state inmates at the county jail.

The tax hike would raise noncontract employee salaries by 2.75 percent, add $6 million to the surplus fund, and add $4 million to the county community college, among other expenditures.

Even with the increase, Montgomery County's tax rate would remain the lowest among Philadelphia's neighboring counties on both sides of the Delaware River.

In Bucks County, officials have proposed a $415 million budget, which did not include a property tax increase - the 10th time in 11 years that officials did not raise property taxes. Officials are slated to take a final vote on Wednesday.

Delaware County also anticipates no increase for its current 5.6 millage rate, according to its proposed $351 million budget. Officials are to vote on the budget Dec. 14.

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