There’s no property tax increase proposed in Lancaster city’s draft budget for 2020.
However, it calls for hikes in water, sewer and trash fees that would increase typical ratepayers’ costs by $51.17 per quarter, or $204.68 per year.
Mayor Danene Sorace introduced the budget at Tuesday’s City Council meeting. Council will discuss it at its committee meeting Monday, Dec. 2, and at budget hearings Saturday, Dec. 7; it is scheduled for a vote Dec. 17.
In 2019, when taxes rose by 1 mill to 11.7 mills, that increased the average homeowner’s bill by about $100. One mill equals $1 per $1,000 of property value.
With utility rates, unlike property taxes, customers have some ability to mitigate increases, Director of Administrative Services Patrick Hopkins noted.
By reducing quarterly water consumption from 12,000 gallons to 10,000 gallons, a household could cut its bill by about $28, offsetting 60% of the proposed water and sewer increases.
For 2020, the city’s total general fund spending is projected to rise by $1.76 million to $62.7 million.
That accounts for just over half of the city’s total spending of $123.2 million. The remainder consists of the budgets for water, sewer, trash and stormwater.
No rate increase is proposed for stormwater management. But hikes are proposed for the other three, and spending on each is scheduled to increase more than 10%.
For water and sewer, that’s due to the ongoing need to upgrade the city’s infrastructure, the mayor said, and for sewers, to continue complying with the consent decree established in 2017. For trash, it’s due to higher projected tipping fees driven by shifts in global recycling markets.
For the average residential customer, the proposed rate increases are as follows:
- Sewer: $28.50 per quarter.
- Water: $17.67 per quarter.
- Solid waste & recycling: $5 per quarter.
- Total: $51.17.
The increases do not apply to water and sewer customers outside the city. However, their rates are in line to rise, too.
The city applied for a sewer rate increase for suburban customers last year. It’s expected to take effect early in 2020, Sorace said. And at some point in the coming year, the city plans to apply for a rate increase for its suburban water customers, she said.
Even with the increases, the city’s rates remain on the low end countywide, the mayor said.
Salaries and benefits account for three quarters of general fund spending. The mayor said careful management and cooperation from the unions representing city employees has helped control costs.
Among other things, the city’s self-financing of health insurance continues to keep average annual increases below 3%.
A call for reform
Although property owners are not facing a tax increase in 2020, there have been eight over the past 14 years, and more loom down the road unless state lawmakers act, Sorace said.
That’s because of an issue she has stressed throughout her tenure and emphasized again Tuesday: The structural mismatch between the costs of the services that Pennsylvania’s small cities are mandated to provide and the revenue options at their disposal.
Lancaster has enjoyed a remarkable surge of private investment — half a billion dollars since 2015. But the benefit of that growth on the city’s finances, the mayor said, has been more than offset by factors such as declining federal and state aid, rising pension costs, the city’s large proportion of nontaxable properties and Pennsylvania’s outdated municipal finance system.
The mayor has been lobbying aggressively in Harrisburg for additional revenue tools.
City budgets never get easier, Sorace said.
“For my administration, this budget is a call to action to operate as efficiently as possible and work tirelessly to fix our broken tax structure,” she said.