Philly Workers Who Stayed Home May Be Due a Wage Tax Refund
Contributed by: Nick Valla, MPA, Assistant Township Manager, Middletown Township
Has your home turned into an office during the last year? With the pandemic forcing many people to work from home, thousands in our area are no longer commuting to work.
For those who in the past commuted to Philadelphia, there is yet another benefit to working from home beyond saving time, gas, and tolls: a tax refund.
Anyone who works in Philadelphia and lives elsewhere [e.g., Newtown Township] is subject to pay the non-resident Philadelphia Wage Tax, which stands at a hefty 3.5019% of gross wages. Nearly all municipalities in the Philadelphia area [including Newtown Township] levy an Earned Income Tax (EIT), with most topping out at 1%. Residents living in the suburbs are subject to this lower rate EIT where they live- unless they work in Philadelphia. However, with many required to work from their homes during the last year, they may no longer be subject to the Philadelphia Wage Tax while telecommuting.
Is it worth the effort to pursue a refund?
The simple answer is yes! Someone working from home in in the suburbs [e.g., Newtown Township] during the pandemic making $60,000 per year would be subject to their home municipality’s EIT, which is typically 1%. In the span of one year, this would equal a savings of about $1,500!
[Note: The median household income in Newtown is $118,654, which means Newtown residents may save much more.]
Plus, the 1% you contribute to your local EIT will be invested into public safety and infrastructure improvements into the community you and your family lives.
How do you take advantage of this? For any amount of time a Philadelphia job was completed at a home outside of the city limits, they may request a Wage Tax refund from the City of Philadelphia. When submitting a tax return to Keystone Collections, the tax officer for all EIT in Bucks County, use the Out-Of-State Tax Credit Worksheet on Line 12 of the tax return form if you need to receive a tax credit for the time you did not work in Philadelphia.
For anyone who continues working from their home outside of the City of Philadelphia, they should submit a Residency Certification Form to their employer and request that their local EIT be deducted from their wages instead of the City Wage tax. A political subdivision (PSD) code will be needed for the form, which can be found using this tool.
Note: This notice has been reviewed by Joe Lazzaro of Keystone Collections to ensure accuracy.Read More...
Posted on 04 Jun 2021, 01:29 - Category: Finances
Newtown to Receive $1,936,231* in Federal COVID-19 Relief Funds
Posted on 24 Apr 2021, 01:20 - Category: Finances
Resident Comments Regarding the Proposed 2021 Budget
The following is a selected list of resident comments I have collected regarding the proposed 2021 Newtown Township Budget. It is by no means a complete list. Find a summary of that budget here.
- Comments by Survey Respondents
- Comments Sent to BOS
- Comments Sent Via Personal Email
- Comments from Meet Mack Monday Registrants
- Comments Seen on Newtown Patch
- Comments Seen on Nextdoor
Comments By Survey Respondents
The following comments were submitted by respondents to the 2021 Budget Cut Survey. As the survey promised, no personally-identifiable information is revealed. Find a summary of the survey results here including more comments. If you haven't already taken my survey, you can TAKE IT NOW.
- “The new proposed tax increase of 178% is totally absurd how is that even possible. That should never ever be allowed is criminally ripping people off. Never heard of such a high high increase. Why is it all of a sudden happening now? At the worst time in history.so wrong !!”
- “Pls do what u can to stop such an unbelievable increase in taxes. So many people are out of work, people are Covid scare. We have to live on a budget and do without, so should local governments.”
- Regarding capital spending cuts: “Look for low hanging fruit. A lot of little items that get cut will add up to big savings that can be passed along to the Newtown residents by decreasing this ridiculously high increase.”
- “School & Tax Collection departments and such efficiencies should be explored.”
- Regarding personnel cuts: “Given the current situation - there should be a zero salary hikes. Reality in private industry have implemented 10-25% salary cuts.”
- Regarding service cuts: Only maintenance and repair no large projects.”
- Regarding capital spending cuts: “Technology and cloud virtualization -so technology investments that reduce or automation that reduce cost should be explored.”
- “1) In the proposed budget letter, there was claims stating that township has suffered from lower income tax revenue which leads to shortage of funds and the need to increase tax. However, it was also stated in March, April and May the income tax fell below the projected, which was in fact due to township allowing residents to defer the tax payment until later in the year. And in September the taxes have been historical high. Therefore, there was no evidence to support the assumption that the income taxes will be lower for next year and to justify the increase of property tax. 2. What's the park& recreation budget for 2019, 2020 and 2021? What portion of this is funded by the grant contribution and how much was from the township?”
- “I would ask that those getting the 3% raise forgo that raise for six months. Their salary would reflect the total and future raises would be based off the number corresponding to the full salary increase.”
- Regarding personnel cuts: “Propose a hiring freeze and pay freeze within the township until Covid is controlled.”
- “Roads need lines and arrows painted - there is already enough police presence here - please halt or slow down the mania for new buildings, businesses, home developments, etc.”
- Regarding capital spending cuts: “Tough call on this one without knowing more information like how old are the current computers, why does Public Works needs new trucks and why do we need more police vehicles.”
- “People have lost jobs, businesses have been directly effected by COVID. This is not the time for extra spending. It’s time to cut budgets so we can survive!”
- “Similar to those who experience financial issues the township should not continuing with business as usual. Possible capital outlays and increases for salaries, similar to the commercial world, have to be considered not just say taxes increased when the populace is facing an unusually tough year.”
- Regarding personnel cuts: “This is an usual year. Limiting raises and a hiring freeze for new positions is responsible economics. Promotions should continue, but not with a back fill. Hopefully it is a 1 year issue allowing for income taxes to come back.”
- Regarding service cuts: “Look line item by line item keeping only the most essential. Summer programs should be less subsidized and sized to break even or make money instead of paid from taxes when monies are tight.”
- Regarding capital spending cuts: “Learning the impact of delayed capital purchases for trucks, computers and police cars. Are these truly approaching end of life or can the delay be handled? Pragmatic approach of what is needed not just what is ideal.”
- “As noted I think with the budget crunch the Township is experiences as we all are, needs to eliminate as many expenses or forestall expenditures that can be put off in 2021 so that the effects of the pandemic on ALL needs to be assessed.”
- Regarding personnel cuts: “3% is generous since retries, only got 1.5%, Why not frezze salaries for on year.? Promotion freeze for all employees for one year.”
- Regarding service cuts: “One year freeze on expenses for parks, except where necessary for safety.”
- Regarding capital spending cuts: “Again freeze expenses unless immediate need. No new building studies, or building plan.”
- “Our opposition to this spending is not to say that these things are not important, but 178% increase when our incomes have decreased is a hard pill to swallow. If our healthcare is cut due to Supreme Court Affordable Care Act reversal, I don’t know how we will make ends meet.”
- Regarding personnel cuts: “Replacement of retiring officers should continue to maintain the size of our force. Look to combine Borough and Township officers.”
- Regarding capital spending cuts: “Putting off 1 year will not cause any harm to our community. We are all doing this in our homes and we wish we could purchase these items, but our incomes have gone down.”
- “It took a long time to get control of the board and I guarantee you that if taxes are raised, we will lose, and the voters willl have no one to blame but those who vote for it. I have never voted for an R for anything in my life, but if someone runs on the basis of not raising my property taxes, (the SALT deduction for which is now extremely limited to $10,000), I will vote for them regardless of party affiliation.”
- Regarding personnel cuts: “Limit all salary increases to the rate of inflation for 2020. Hire no one for anything, promote by title only without pay bump, no increase in spending whatsoever except that required contractually or due to extreme emergency.”
- Regarding service cuts: “Reduce as much spending as possible. All of these things can wait until the economy is on a steady footing.”
- Regarding capital spending cuts: “Cut everything, lock, stock, and barrel.”
- Regarding personnel cuts: “You complain about tax increases when our elected board (some current, some not) dug the township into the hole that it’s in. You have an unqualified fire chief that was hired and is already collecting one pension from this Twp, and now you want to create a tax mileage to give him a raise. Your township public works are stretched so thin because of increasing responsibilities and low staff number. Your police dept responsibilities are also growing since you allowed Brixmore to build and build in our shopping center. The tax increase is needed and would still be lower than other surrounding municipalities.”
- “Pay freeze and hiring freeze until pandemic settles down.”
- Regarding personnel cuts: “Pay freeze and hiring freezes until 2022.”
- Regarding personnel cuts: “I do not know if there really is a need for the new hires. I do know if taxes go up , as a senior, I will need to move.”
- Regarding service cuts: “As a senior who can not increase my income, I needed to learn to live within my budget. I knew what I could cut personally. I do know what the township can cut.”
- Regarding capital spending cuts: “We can not buy everything on the wish list.”
Comments Sent to BOS
The following are a few of the comments that have been sent via email to firstname.lastname@example.org, which is the official email address for sending comments to the BOS that are meant to be included in the public record. Access ALL the emails sent to the BOS and Finance Committee here.
- Harold & Marilyn Zeltt, 77 Elfreths Court: “We feel strongly that Newtown Township should focus on cost cutting measures at this time, rather than putting the additional financial burden on the homeowners…we feel that such a dramatic rate increase would discourage seniors from Moving into our community, as well as discourage the retention of the current senior residents.”
- Guy Waller: “Make believe the $$$ is coming out of your personal bank account. It's easy to spend other people's money! We don't mind a minor increase, but 178%? Come on.”
- Karen Sliwinski, 11 Prince philip Ct: “The suggested tax hike is too much at this time. Please consider one that is not as drastic! There are many who are struggling financially because of the virus and It would also adversely affect those on a fixed income.”
- Maureen Schreiber, 105 Rittenhouse Cir: “Increases in millage rates unfairly burden newer homes such as mine…a full re- assessment would better allocate taxes across all homeowners and take the burden off of newer home owners.”
- Steven Kieley, 63 Elfreths Ct: “We always pictured Newtown as a well run pastoral community with reasonable taxes. Now, with the amount of commercial development and the high tax rate you are encouraging, that image is fading fast.”
- Joe Hillock, 37 Rittenhouse Cir: “The lower millage rate was an attractive feature of moving into this Township, from New Jersey. The township should consider cutting costs rather than putting all of the burden on homeowners.”
- Florence Geller, 1904 Society Place: “I would appreciate it very much if something could be mentioned giving seniors a tax discount…I'm 88 years of age & have worked till Covid started. I'll appreciate anything that can be done to help Newtown's seniors.”
- Satish Handa, 68 Elfreths Court: “I am not in favor of the Township hiring additional personnel at this time. Services are adequate as is. The Township should impose a hiring freeze until it has a better idea of the impact of Covid-19 on 2021 revenues.”
Comments Sent to Me Via Email
The following comments were sent via my online contact form and via email to email@example.com, which is my PERSONAL email address, and to my official email account: firstname.lastname@example.org. Most were sent after the October 28 Newtown Township Meeting Notes (link) email newsletter was sent to subscribers. The sender IDs are not revealed.
- Alison K.: I definitely object to the extreme 178% increase in taxes in Newtown Township. During this time of pandemic with many people losing their jobs or st least suffering financially, this would be an outrageous and presumptuous move, forcing many residents to move from the township. I live in Newtown Crossing and it is a real concern for myself and my neighbors.
- Mary P.: We are retired and on a fixed income. We are totally against raising real estate taxes for our home here in Newtown. It is ridiculous to raise property taxes during this COVID pandemic. Everyone is suffering and now our town supervisors are raising taxes to harm our residents even more. This is a disgrace.
- Ed S.: Raising taxes at this time is irresponsible. People are hurting, businesses are closing, kids are not going back to school and parents have to stay home. You need to find a way to level this out. Reelection is in the balance. Hold off on projects, furlough non-essential employees. Tighten your belts. The strategy of starting high and backing off thinking folks will not see what you are doing is and old ploy and doesn't fool anyone. Be responsible.
- Gregory G.: “I am disappointed. Roads were already scheduled. They would have got done anyway. So that is no deal. Fake. [Read Newtown Township Meeting Notes: October 28, 2020 issue]. What changed in the budget that it was necessary to spend rainy day funds on? I suspect some fancy accounting was done to rearrange expenditures. No hiring or raises were given so where did the money go and why? Unions were probably just promised more later. Like our schools they are too top heavy with administrators unnecessary but you want their votes so they get it just after your election.
“When I and most people complain about the unions (police - teachers) it's not the individual we have a problem with but the organization. Get more money, more benefits and retirement payments, for less work and of course more employees . Who brokers for the new employees, you get a list to pick from and you except it. Solicit your own by giving them a list of the qualities/ characteristics you wants . In the education field they get a masters mostly to increase the pay and retirement, it been shown that it doesn't mean any student will a better education. Just look at our National and international scores.
“It's good to have more discussion about all these issues. Do we need some police reform? what happened to those discussions? Or do we wait to the next incident?”
- Kim: “Do we really NEED more police at this time? Do we really NEED a full time inspector? These seem to be large permanent expenditures.”
- Maryjane H.: “Why do we have a president and two chiefs for police and fire. Why can't the business manager oversee the chiefs. I see no reason for that position.”
- William D.: “Thank you for your leadership, dedication and for fighting for us. Thank you also for conducting the Zoom meeting on Monday ... The 40% increase is much more reasonable than the 178%.”
- Elen S.: “Thank you John for your dedication and drive for transparency in our township. You're the only supervisor that thoughtfully lays it all out for the public and it's much appreciated.”
- George S: “I’d be willing to bet that 99% of homeowners do not know how their real estate taxes are calculated, and how the totals are tied to their home valuation.” [Read “How to Calculate Your Yearly Newtown Township Property Tax”]
- Ed S.: “Not a good time to raise taxes....people are hurting out there.”
Bob P: “The following needs to be explained in the short and longer term or you may not survive the next election. Many people vote on their pocket books.
“I used to live in Yardley, where taxes were about about $1000 per year higher but no 1% earned income tax, which I don't like. Where exactly is the income loss coming from, earned income, business or what? And what percent/amount in each category have you lost? We need to see specifics.
“And what is the longer term plan to get us back to normal tax rates? When taxes go up, they don't usually go back down to normal amounts.
“I suggest cutting expenses to the bone. For example, they are installing new storm drains in Newtown Grant, when the old ones are fine, especially during a financial crisis. And we don't need an assistant township manager and 3 more police. If nothing else, these things are visually bad and will upset residents.
“To me, a 178% increase is outrageous and hard for a resident like me to understand. Even 142% seems crazy. I don't want taxes on my little townhome to be $7500 or even $6000. That is a lot! I can't wrap my mind around this need nor will most of the public.
“I'm trying to help you understand the publics view. And I don't see the information I need to see on the Newtown website to try to understand this.”
William M.: “As I understand it, the board of supervisors is considering raising taxes at rates climbing to 172%, or even 40% (as if we should be thankful for only this small rise).
“I believe, that at this moment in time, it would be unwise to raise taxes on a Newtown population that is experiencing financial and emotional family disruptions.
“In my case alone, I have been unemployed throughout 2020 and my daughter fought through Covid this summer (successfully). The Township has limited or stopped services because of Covid. It would be counterproductive to raise our taxes while delivering less service. If we have to tighten our belts and continue to offer reduced services,
“I would find that more workable than adding a further burden to our Newtown friends and neighbors. Now is the time for financial control. We cannot take more stress and we will remember those who fought for us!!”
Comments From Meet Mack Monday Registrants
I hosted at least two Meet Mack Monday Zoom meetings that focused for the most part on the 2021 budget (see summaries here). The following are comments received by people who registered to attend.
- Debbie W.: “Why is Upper Makefield & Wrightstown millage less than Newtown? Their housing is significantly higher priced? What are the recommendations of the 5 year audit? Ex: Proposed immediate hiring of police & other personnel: when suggested a "phased in" hiring?”
- Merrie E.: “I am very concerned with the financial health of Newtown Township, as it has lost several major employers and has experienced rapid commercial growth. (The growth of the Newtown village Shopping Center seems very haphazard.) The infrastructure demands seem to be outpacing the commercial growth: I oppose the proposed millage rate increase, placing the so much of the burden on property owners. I'd like to hear if cuts are possible in other areas of the budget.”
Comments Seen on Newtown Patch
The following comments were in response to an article published in Newtown Patch: “Newtown Residents May See Steep Tax Hike In 2021” and "Newtown Supervisors Look To Tweak A Taxing Budget Proposal".
- Rational Thinker: Having been a resident in Newtown Twp for almost 25 years, all we were ever told was that we need growth to be able to fund necessary projects for basic needs. Now that the town has been turned into a gigantic strip mall, and hundreds of houses have been built with thousands of new residents (almost all paying 1% and/or a job fee - homemaker has to pay a fee even though doesn't have income?!), and all the people and jobs and tax revenues have arrived, we find that our taxes need to skyrocket...? Watch. This is a bait and switch. They will say "We could have had to increase by 178%, and ONLY did 40%" like that is any comfort for having been mislead by these people. Our town has been irreparably damaged and now we have to pay more, and more, and more. Nuts.
- Francis Marion: Even 40% is too high in this economic environment. Democrats have been telling us how bad the economy is. If that's true then why would you increase tax's 40 to 178%? How about reducing costs? Crazy idea I know but it's what every family and every organization in the private sector would do.
- Mork: As I have been saying for years cut the corruption and crap! Consolidate departments and services. I can think of at least 10. I know it would eliminate jobs.
- Alena Leshka: Why do we even need almost double the taxes? It means we will have to pay extra 300 dollars a month if not more. Outrageous.
- Ben Franklin: “Cut expenses to match revenues. It's the prudent thing to do. Tax's are too high already. The only one that's going to resolve my household deficiencies is ME. Which means getting creative on multiple revenue streams. Besides [purchasing] police vehicles, could any of these have been leased, or rented when needed?”
- Jeff Wilson: “Only 40%? Thanks Newtown!!! I guess all of those new houses don't contribute to the tax base? So now that we have had a pandemic you are going to hit up the community for more money... Awesome. Reminds me of the school redistricting they did last year. STEP 1 - Hire an outrageously expensive consulting firm to figure our a simple problem STEP 2 - Take the ridiculous suggestions of the consulting firm and put them out there. STEP 3 - Listen to the rage of the Newtown Residents STEP 4 - Come up with a compromise that is still way off the mark. No wonder people in local politics don't run companies. They would be bankrupt in a matter of months.”
- Rita Schnell: “I think, given the climate, I’d rather have more police officers. Many repaved roads can wait. And why wasn’t the increase proposed 2 years ago, during better times economically? We have plenty of new businesses in Newtown. We don’t need anymore, and if we do, there are already some vacant buildings they can use. We don’t need more buildings. Starbucks drive through area is a nightmare for that plaza anymore. I do have a question. Since we have way more businesses here than when we first moved here, aren’t they supposed to offset our taxes? If not, then why are we enticing them to come here? I understand business has not been good this year, so WE may need to offset that. But why are you giving yourselves raises this year?”
- Bryce Jarrod (Yardley resident): “Here's something else that increases home values and would be enticing to new businesses: lower taxes. Yes, you might have to remove some government drones from service, and you might have to put the others to work, and you might have to root out the corruption in the bid-rigging process, and you might have to find novel and creative solutions to increase governmental efficiency (excuse the oxymoron). This is all a lot harder than increasing taxation, but that's the job. If you're not up to the challenge, step aside and let more competent people serve the people.”
- Dog Man: “Looking at the finances overview, it is not a pleasant situation and the best option will probably annoy the most people a bit (instead of some people a lot). I also appreciate that postponing paving could lead to higher costs in the future.”
- T Dan: “178% Property Tax Increase for Newtown? – CHECK! Spending $38,000 on a outside consulting firm to tell us how to live – CHECK! Preying on our fears for our safety? – “turning Newtown into Dodge City” – City Supervisors – CHECK! Possible Property Tax Increase again in 2024? – CHECK! Mismanagement in dealing with the impact of COVID on the Budget- CHECK!Can you afford the tax????????”
- S Jay: “T Dan, Its great that you are raising awareness of the proposed 2021 budget and possibility of the large tax increase next year. I encourage everyone to read the Strategic Management Planning Program - Five-Year Financial Plan that is posted on the township website. The consultants provide a list of recommendations and reasons for the additional tax increase, headcount, and other options to balance the budget next year. A couple of my takeaways.
The consultants provided a good comparison of the taxes and township employee headcounts between newtown and the various surrounding townships and boros. Very interesting. We seem to have the lowest tax average.
The average tax bill of a newtown township resident is $6,222. It consists of 3 parts; the earned income tax, the school district tax and the newtown township property tax. (The total excludes the Bucks county property tax amount) It appears that the newtown township property tax is by far the smallest portion of the taxes we pay. If I'm reading the report correctly the 178% increase only applies to the Newtown township portion. According to the report this additional increase will add an additional $281 to bring the total average tax to $6,503.
Even with this increase, Newtown looks like we still have the smallest total average tax compared to our surrounding communities.
“I hope I'm interpreting the report correctly, if not or I've missed some other crucial points, please let folks know.
“Now I agree with you and others in the community that we need to work with our supervisors and township management to scrutinize our spending and thoroughly asses our revenue streams for for the next few years. We may need to make some hard choices and we may have to sacrifice or raise fees on some programs and services that we take for granted.
“The one point, I'll disagree with you is spending $38,000 on a consultant. I believe the five year financial operating plan is very crucial element of our community and paying the cost to get expert advice on how to raise revenue, anticipate expenditures and manage the township for our $12 million annual budget is very worthwhile.
“I hope we as a community can rise up and have a good, respectful and spirited debate on our future budget. Hopefully through this budget process we can build a strong, positive consensus going forward during these unprecedented times.”
Comments Seen on Nextdoor
The following comments were in response to a post I made on Nextdoor: “2021 "Recommended" Newtown Township Budget”. Not all comments are included. Also see these posts to Nextdoor with over 100 comments: "Newtown Township Board of Supervisors are supporting the 133% tax increase" and "NEWTOWN to raise property tax by 178%".
- Gary Cohen (Upper Makefield): “No one likes to pay taxes but almost everyone likes public services. For people who want to comment on the budget it is helpful to be prepared with recommendations as to what should be cut or for that matter what should be increased.”
- Florence Geller (Newtown Grant): “Where does a senior at age 88 on a fixed income get the money to afford such a drastic increase ?????? Still working at age of 88, but have not worked since start of Covid!!! Quote from that old saying: Can’t get blood from a stone!!!!”
- Debbie Macy (Roberts Ridge Park): “...and seniors shouldn't have to work, unless they want to because they enjoy it, it shouldn't be a necessity. I understand that costs drive things and therefore, taxes must go up to cover those costs, however, during these times, it seems more prudent to put a freeze into effect, re-evaluate the need for so many new police officers, etc. ALL salaries were frozen for the year where I work, because of the pandemic. The Township should be no different. This increase will hurt those who've lost their jobs and seniors. The Township is pushing more and more of our long term residents out of Newtown, as they can't afford to live in the town they love and have lived in for a life time. I've watched senior neighbors move away, seen former homes of seniors torn down to make room for bigger, more expensive houses. Such a shame.”
- Steven DiMeglio (Newtown): “I would like to see a freeze on everything from real estate taxes to hiring to promotions until this economy turns around. This is no time to be spending more money. Has crime increased in the township to the point that we need to pay the salaries of three more cops plus benefits? Show us the numbers to justify this addition to the payroll.” [He added later: “John, this is great. Thanks so much for doing a fantastic job on keeping the electorate informed on what's happening and where you stand on these important issues. It's a welcome change from the past.”]
- Sheryl Kaschak (Newtown): “I thought all of these businesses They are building were supposed to help residential taxes stay somewhat lower. We are Cliveden right behind the shopping center. I don't know maybe because of covid they weren't able to bring in the revenue they hoped and that's why we're getting an increase? That shopping center is a hot mess.”
- Steven DiMeglio [in reaction to the 17 Nov 2020 Finance Committee Zoom meeting]: No talk whatsoever of cutting anything. And increased spending by hiring MORE people and increasing the payroll. George seems like a nice guy and I'm sure he means well but I don't think he understands that there are people who 1) don't want to pay more taxes without seeing some cuts and a hiring freeze (me for example) and those who can't afford to pay more due to a fixed income or the pandemic. We only have the power of our vote and I will not be voting for anyone that increases taxes without cutting and freezing. Can only hope the majority do likewise:)
Posted on 01 Nov 2020, 12:48 - Category: Finances
Newtown Supervisors Review Interim 5-Year Financial Plan
UPDATE (August 31, 2020): ESI submitted its draft of the final report on August 24, 2020. The BOS and the Finance Committee are currently reviewing this draft. The recommendations cited in the Interim Report may not reflect the updated recommendations in the draft of the final report.
Econsult Solutions, Inc. (ESI) – the consulting firm hired by Newtown Township to develop a 5-year financial plan – presented an Interim Report of findings and recommendations of the proposed Strategic Management Planning Program (STMP) to the Board of Supervisors at the August 17, 2020, Work Session. Representing ESI was Steve Wray, ESI vice president and director. You can view the archived video of that Zoom meeting here.
The purpose of the program is to establish short- and long-term term financial and managerial objectives relative to revenue and expenditure trends and policies that strengthen the fiscal capacity of the Township.
Selected slides from that presentation are presented below. I have included audio snippets from the Zoom meeting and, in some cases, my personal comments.
Historical General Fund Balance
The Government Finance Officers Association (GFOA) Best Practice recommends, at a minimum, that general-purpose governments, regardless of size, maintain unrestricted fund balance in their General Fund (GF) of no less than two months (17%) of regular general fund operating revenues or regular general fund operating expenditures. For Newtown, with a 2020 GF expenses of approximately $13 million, that would mean we should have a year-end fund balance of $2.17 million. The current projected GF year-end balance is about $1.3 million or about 10% of the operating budget.
Historic Fund Balance Trend
The Township enacted policy to maintain fund balance level at least 10% of operating expenses. For 2020, that means the balance at the end of the year should be around $1.3M whereas the latest estimate is more like $800K.
In the following 2-minute audio snippet, Mr. Wray provides details regarding slide #6 and slide #7 of ESI's Interim Findings of the proposed STMP.
In the following 4-minute audio snippet, Mr. Wray provides details regarding slides 9 through 11 of ESI's Interim STMP Findings. These slides deal with benchmarking the millage rates and real estate assessment values of neighboring municipalities with Newtown Township.
Mr. Wray said “EIT is capped! There’s no place to grow … EIT. So, if people [in neighboring townships] are looking to make up for shortfalls, the likelihood is that they’re going to be looking at real estate tax increases.” This is assessment is surprising because at practically every BOS meeting I have attended during which finances were discussed, it was always pointed out that other neighboring townships – such as Lower Makefield - might implement their own EIT tax to make up for shortfalls.
It seems impossible for Newtown Twp to continue to increase commercial development at any rate near the rate shown in Slide #11. It would have been interesting to get resident/business feedback on this – perhaps there is some relevant feedback from comments to the surveys recently performed by ESI (see “A Fiscally Stable Newtown is Good for Business & Vice Versa” and “How Satisfied Are You With Newtown Township Services?”). Those comments will be in the final report, which is anticipated to be completed by the week of September 28, 2020.
A perhaps more relevant survey is currently being conducted by the Bucks County Planning Commission (BCPC), which is in the process of updating the Newtown Area Ten-Year Plan (see “Newtown Area Jointure Wants Your Opinion on Planning the Future”). This survey specifically asks: “Overall how satisfied or dissatisfied are you with the residential development within your community?” and “Overall how satisfied or dissatisfied are you with the commercial development within your community?”
With the exception of 2022, ESI projects the expenditure rate will outpace the growth rate each year from 2020 through 2025 if no corrective actions is taken (see Slide 13).
In the following 2.5-minute audio snippet, Mr. Wray provides details regarding slides 13 and 14 (not shown) of ESI's Interim STMP Findings. These slides deal with baseline revenue and expenditures between 2020 and 2025 if no changes are made and the impact on Newtown Township's fund balance.
ESI listed a slew of short-term, long-term, and ongoing recommendations to increase revenues, reduce cost and “optimize” staff. Regarding the latter, the consultants identified a need to hire in 2021 as many as 10 NEW employees o expand services and make “quality of life improvements.”
The new personnel include:
- 1 full-time Assistant Township Manager at a salary between $80K and $90K
- 1 full-time Assistant Township Manager at a salary between $65K and $85K
- 3 full-time police officers
- 5 full-time firefighters
Newtown Township police starting salaries are around $52,000 per year. Looking at the 2020 budget, I find that the average yearly salary of a Newtown Township police officer is $94,287 (based on the 14 officers below the rank of corporal) with a range of $59,226 to $108,892. ESI suggests that wages of new hires could be “partially offset” by reducing overtime and compensatory time.
ESI also recommended that the township begin planning for renovation or relocation of the current police headquarters, but has not included the substantial costs associated with that in its recommended plan.
Meanwhile, most citizens feel pretty satisfied with police services as they currently exist. According to results of the Newtown Township Citizen Survey hosted by ESI, nearly 80% of 553 respondents rated the level of police presence Good (42%) to Excellent (37%).
Hiring 5 new full-time firefighters are necessary to provide 7-day fire coverage by paid firefighters, which is something the 2018 Fire and Emergency Study said would “eventually” be needed because of decreasing ability to recruit volunteers. The all volunteer Newtown Fire Association (NFA), however, NFA suggested the implementation of less costly options to address the staffing concerns in lieu of an immediate increase in the number of career firefighters. NFA suggested that an "Ad Hoc" committee be established to begin discussions and planning for the formal establishment of a "Combination Career/Volunteer Fire Department" to serve Newtown Township and Borough.
ESI suggested that the personnel costs (salary, medical, retirement benefits, etc.) of 5 new career firefighters “would be covered by a SAFERS grant” but only through 2023, after which the township will bear the cost. My understanding is that SAFER grants only cover 75% of salaries in the first 2 years and 35% the third year, then the township will have to pay 100%.
Among all the township departments that service the community, the Public Works Department is one that must be considered when thinking of “quality of life improvements”. This is born out by the citizen survey in which “Streets and Highway Improvements” was the top choice (70%) that citizens felt needed improvement. Parks and Recreation also ranked high (25%) whereas Fire and Police improvements ranked lower; 6 % and 19%, respectively.
The quality of our streets is a major factor in rating the “quality of life.” I know this from personal contacts with residents and have brought some concerns to Newtown Manager, Mr. Lewis: such as fixing potholes on Commonwealth Drive and making the plantings on the median of Stoopville Road more attractive. On both occasions I was told that the problem was lack of enough PW workers to handle deal with these issues as well as all the other duties they perform, such as mowing the grass in public parks. So it is a mystery to me why ESI did not recommend the immediate hiring of new Public Works employees.
In the following 4-minute audio snippet Mr. Wray focuses explains the need for hiring 10 additional full-time personnel.
ESI recommended a few “Cost Containment/Management Measures,” which includes controlling the police overtime and “comp time” accrual. ESI believes that with a full complement of police officers, the township should not have the need for comp time and overtime as it has now. “That’s got to be part of the deal [regarding hiring more police officers],” noted Wray.
ESI briefly touched upon several short- and long-term revenue enhancement strategies. The “elephant in that room was the recommendation to expand revenues through a new General Fund real estate millage in 2021. As detailed in Slide #22, ESI recommends a 6.50 mill increase in RE tax to pay for the new hires and maintain a general fund balance above 9% going forward. This amounts to a 144% increase in taxes.
The approximate average home market/assessed value in Newtown Township in 2018 was $400,000 (market value)/$43,600 (assessed value) [numbers from a Finance Committee report are: $483,000/$38.85]. Adding 6.5 mills would mean an additional $252.53 to $283.4 per year in RE tax for the average homeowner in Newtown (depending on whose numbers you use).
I would point out that over 62% of respondents to ESI’s Citizen Survey said they would NOT be willing to pay higher taxes for increased services.
Other revenue enhancement recommendations include:
- Negotiate with Newtown Borough to pay its fair share of fire service expenses based on the percentage of service provide to the Borough vs. the Township;
- Rezone and enhance the Newtown Business Commons
- Undertake a publicity campaign targeting new business to the area;
- Negotiate expanded shred service agreements with neighboring communities.
Aside from the 144% increase in RE tax – all these ideas were previously discussed by Board members in past public meetings.
ESI laid out three different scenarios going forwarded as shown in Slide #22. All involved real estate tax increases.
Public comment regarding this plan can be sent to email@example.com before or during BOS Zoom meetings. All comments will be read aloud during the meeting.
See comments sent to the to the BOS 8/26/20 from resident Frank McCarron’s embedded below or download the PDF here.
You are also invited to give me feedback via a short survey. Your responses will be confidential. Upon completion of the survey, you will be able to see de-identified responses (no comments or personal information is revealed).
DISCLAIMER: This is not an official Newtown Township survey. It is hosted by John Mack to learn more about issues of concern to Newtown Township residents. The opinions expressed here are solely those of John Mack and do not represent the opinions of any other person or entity.
The current schedule is outlined in the following table.
Posted on 24 Aug 2020, 01:18 - Category: Finances
2020 Estimated Real Estate Tax Revenue & Expenditures
Newtown Township's Real Estate tax millage Definition is composed several components dedicated to specific funds or projects. These are (1) 2.625 mills for debt services purposes (to pay off loans for road improvements, and other projects), (2) 0.875 mills for fire protection (Support for the Newtown Fire Association, Fire Chief’s salary, health insurance, etc.), (3) 0.55 mills for fire hydrant maintenance, and (4) 0.45 mills for the Newtown Ambulance Squad. 0.0 mills are collected for "general" purposes. Thus, residents know exactly what they get for their real estate taxes.
For an average Newtown Township home assessed at $40,000, the yearly real estate tax is $180 (4.5 millage X $40,000/1,000).
According to the 2020 Preliminary Budget (here), the total Real Estate Tax Levy for Newtown is estimated to be $1,558,345 based on a total assessment of real estate assets of $346,298,840 (see table and chart below).
Debt Service Tax for Town Center & Roadwork
The township is paying off a general obligation bond for the construction of the town center and a $1 million loan for the paving of roads. The total expenditure for those two items is $1,012,160 (see page 19 of 2020 Preliminary Budget).
Approximately 5.5 miles of roads will be repaved in 2020 thanks to $686,194 to be received from the 2020 State Liquid Fuels Program Definition and the aforementioned $1 million loan, which will be paid back over the next 3 years.
According to the September 20, 2018, "Preliminary Report on Newtown Township’s Municipal Finances" prepared by the Newtown Township Finance Committee, the current tax millage dedicated for repayment of the township building construction annual debt service will "not meet mandatory increased yearly payment amounts possibly as soon as 2020. The dedicated millage rate will need to be increased or supplemental revenue found" (view the video of the presentation of that report here).
Fire and Rescue Squad Taxes
The revenue collected via the Fire Tax will cover the $175,000 that the township gives to the Newtown Fire Association plus pay for the Fire Chief's salary and benefits and other fire-related expenses. The $185,000 Fire Hydrant Tax pays for fire hydrant maintenance by the Newtown Artesian Water Company.
Last, but not least, is the Rescue Squad Tax, which pays for the $151,000 that the township pays to the Newtown Ambulance Squad (NAS). You may recall that in October, 2017, Evan Resnikoff, NAS Chief of Operations, asked the Supervisors implement an EMS millage of 0.5 mill, which would generate about $172,000 of funding for the squad (see the video here). The Supervisors went on to approve the current 0.45 mill tax.Read More...
Posted on 22 Nov 2019, 11:08 - Category: Finances
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