City considers tax increase to curb shortfalls
Wednesday, August 7, 2013 1:00 AM
Philadelphia aldermen are considering raising taxes by at least 5 mills as they prepare the 2014 budget.
At a Monday night budget work session, a newly-elected Mayor and Board of Aldermen discussed raising taxes after six consecutive years of previous boards spending more than the city has taken in, or about $6 million over the last decade.
Newly-elected Ward 1 Alderman Josh Gamblin told the board that he wasn't afraid to raise taxes.
"We need to make tough decisions," Gamblin said.
Mayor James Young agreed, saying that during his first budget year in office he believed there would be excess revenue over spending but that he was wrong.
"Tough decisions have to be made," Mayor Young said.
Gamblin's suggestion of raising millage was met with nods of agreement by other board members.
He initially suggested raising taxes by 10 mills but later the amount was brought down to five.
"I'm OK with asking citizens for half of that (10 mills)," Alderman-at-Large Willie Jackson said.
An additional five mills would generate about $274,500 for the city.
An owner of a $100,000 house would pay an additional $50 in ad valorem taxes.
While no decision was made, the board debated other ways to cut spending including layoffs, selling assets and cutting employee benefits.
Gamblin asked about the possibility of cutting nonessential personnel in the police department.
Jackson suggested selling the city's dump truck.
Changing policy to require city employees to pay a portion of their health insurance premiums was one consideration posed by Gamblin as was canceling such things as vision insurance which is used less frequently.
Many of the suggestions received negative feedback during the work session.
Ward 4 Alderman Cecil Nichols and Police Chief Bill Cox voiced concerns that the Police Department was already operating at minimal staffing.
Deputy Fire Chief Steve Thomas told aldermen that his department was already understaffed by the required fire rating status.
The city has not had a general ad valorem millage increase in more than 10 years except for fiscal 2006 when it was raised from 10.4 to 11 mills.
However, after reappraisal, the city dropped the millage to the current 10 mills in fiscal 2009.
A mill generates about $54,900 annually for the general fund, which provides monies for the operation of such departments as police, fire, cemetery and streets among others.
The city has not funded the paving of a street in more than five years.
The city of Philadelphia saw a fifth consecutive year of expenditures outpacing revenues in fiscal 2012, that year by $1.3 million, an audited financial report showed.
In presenting the audited statement in January, A. T. (Tommy) Williams, a CPA, told the then-Mayor and Board of Aldermen the city's money was "going out faster than it's coming in."
Williams wrote in the financial report that even though the city amended its budget during fiscal 2012 year, there were "several instances of expenditures exceeding their budgeted amounts."
He recommended that "greater care" be taken in reviewing operations and amending the budget.
Aldermen are anticipating about a $500,000 shortfall before this fiscal year ends.
By law, Aldermen have to adopt a fiscal 2014 budget by Sept. 15.