Slight Tax Cut In Manchester Budget

Mayor Kenneth Palmer gave a presentation of the 2019 municipal budget June 10. (Photo by Jennifer Peacock)
Mayor Kenneth Palmer gave a presentation of the 2019 municipal budget June 10. (Photo by Jennifer Peacock)

MANCHESTER – The Manchester Township Council adopted Mayor Kenneth Palmer’s 2019 Municipal Budget June 10 without much comment.

The adopted $35.7 million budget offers an imperceptible tax decrease, but a decrease nonetheless. The average homeowner will save five bucks this year.

“We’re in good shape,” Palmer told the council and the audience.

Taxpayers keep their eyes on the local tax levy, the amount they’re actually required to pay each year. This year’s levy increased $123,850 to $20.7 million. Manchester welcomed about $38 million to its ratable base, which added $238,000 to its tax revenues.

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“The municipal rate has steadily gone down,” Palmer said. It decreased from 0.626 to 0.623. “It’s slight…It won’t get you a Happy Meal at McDonald’s but it shows that it’s in the right direction. It’s a reduction and not an increase.”

The overall budget increased 1.53 percent, or $537,415, from last year’s budget. As with all budget cycles, it’s the statutory pension contributions and negotiated salary increases that continue to present challenges. While debt accounts for the smallest portion of the budget pie, a mere 5 percent, salaries account for 43 percent.

The increases in salaries – $756,500 this year – are the result of a “negotiation year,” as Palmer phrased it. Several unions settled their new salary guidelines while two unions are still in negotiation with the township.

Manchester ended 2018 with $7.2 million in surplus and used $3.5 million of that for this year’s budget to offset “the tax rate to a certain extent,” Palmer added.

He offered an analysis of the township’s surplus stretching back to 2009, with a low of $987,000 in 2010 to its peak in 2017 at $7.4 million. Manchester has an AA- credit rating from S&P, obtained in 2016. A credit rating is set by a third party. Better ratings come from better fiscal responsibility. And the reward for better credit ratings is lower interest rates.

“It’s really important for the township, for our financial condition, and the reason being is, when we do have to go out to bond, it affects what the interest rate that we get,” Palmer said about surplus.

The township secured further savings by opting into the state health fund, saving $315,000 from last year to $5,055,000.

And with the sale of land to the county, Manchester will be getting a check for $1.4 million this year.

Finally, Palmer touched on east and west utilities. The eastern side water budget stayed at $2.55 million and sewer increased $25,000 to $4.325 million. Western side water stayed at $2.8 million and sewer increased $84,000 to $2.662 million because of increasing debt service and repairs.

Municipal taxes comprise 24 percent of the property tax bill. The county takes 20 percent and the schools take 56 percent.

“One thing as we’re going forward this year and going into next year, we’re still doing the reevaluation in town, so that’s wrapping up, all the inspections should be done this year. The analysis should be done toward the end of the year, and then the new rates will be out,” Palmer said. “The only thing that changes is your assessment, not necessarily the amount of money we collect. One of the things we do have coming up is…the paid first aid. And so one of the hurdles we have in that first year, if we implement it next year, is that we are not allowed to account for the revenues that would generate next year because we’ve never collected them before. One of the things we have to factor in is we’ll be paying those salaries out. …We are getting the revenues in that year, but we can’t put it in the budget. So, having that healthy surplus at the end of the year is really going to help us make that project not impact the residents. That’s why we didn’t take more of the surplus this year and put it into the budget now.”