West Chester Faces Preliminary Budget Deficit of $500,000

Facing a budget deficit of roughly $500,000, the Council’s Finance Committee got the 2012 budget season officially underway Tuesday night.

Working off a draft budget that must be finalized by the end of December, the finance committee looked for ways that the borough could cut costs and raise revenues in order to close the gap next year.

Committee members made several proposals including charging admittance for borough events, instituting a “pay for throw” trash program, raising the borough income tax and a storm water utility fee.

“I’m not in favor of tapping into the capital reserve fee,” said council member Sue Bayne.  “We’ve done that several times over the last couple of years, and we always say we’ll pay it back, but we never do.”

Council member Jim Jones suggested that the borough not replace positions that have been vacated by retirements, and he also suggested that the borough raise the income tax.

The state limits how much a borough can charge in income tax.  Currently, West Chester charges half a percent.  If that number were raised to the cap of one percent it could add close to one million dollars in additional revenue.

Chuck Christie added that another way the borough could bring in revenue while lowering property taxes is to institute a storm water utility fee.

Basically, the borough would charge a monthly fee to residents in order to offset the cost of storm water system maintenance.

Likewise, the “pay for throw” program for trash would help offset the cost of the borough’s trash collection.

Also at the meeting were representatives of the borough’s Financial Advisory Committee.  They recommended that borough institute storm water fees, privatize trash service, eliminate take home vehicles for borough employees and make fewer vehicle replacements.

Still, according to borough manager Ernie McNeely, the borough’s budget model is unsustainable through the future even if every proposal made was enacted.

According to McNeely, the borough is 100 percent built out, and 35 percent of that land belongs to tax exempt entities like West Chester University and the Chester County Hospital. 

McNeely also says that while tax revenues have gone flat, costs continue to grow at an accelerated rate.  Contributing to this is the state’s pension program that requires the borough to contribute to the fund with less and less help from the state.

“For years the borough has managed with cost cutting, cost shifting, efficiency improvements, capital program reductions, shorting infrastructure investment and tax or fee increases to supplement the budget,” McNeely writes in a message attached to the 2012 draft budget.

He adds, “Many of those solutions are used up…this budget draft represents only the beginning of a re-thinking of the level and type of services the borough can continue to provide residents.”

The Financial Advisory Committee will make its full recommendations to council at next Tuesday’s work session meeting.  Round two of the draft budget will make the rounds in November.