Ferguson Talks About Taxes at the January 10, 2018 BOS Meeting
For the benefit of "newbie" Township Supervisors John Mack and Linda Bobrin, Town Manager Kurt Ferguson discussed the "volatile" nature of the taxes the town depends upon to meet its expenses.
To sum up: Ferguson suggested that Newtown is unique in that it does NOT have a property tax (see below) and the lion share of it’s revenue sources depend upon “volatile taxes.” These taxes include resident and non-resident Earned Income Taxes (EIT), which account for about 54% of the yearly revenue. These are “volatile” because people may lose jobs and other municipalities may enact their own EIT. That means that Newtown can lose the taxes collected from residents of those municipalities who work in Newtown. This would have a "devastating effect" on the Town’s financial stability and credit rating.
The Truth About “Real Estate” Taxes
What’s often quoted as “Real Estate” tax millage of 3.50 is actually composed of a 0.875 Fire Tax millage plus a 2.625 Debt Service millage. This income does NOT go into the General Fund to cover ordinary/general ongoing expenses. The former goes into the Fire Protection Fund, which pays for the Fire Chief’s salary, health insurance, etc., and contribution to the Newtown Fire Association. The latter goes toward paying off loans for road improvements, etc. Other towns have a property tax that pays for the general expenses of running and maintaining a town.
Posted on 11 Jan 2018, 01:38 - Category: Taxes