Council Moves Forward With Preliminary Tax Plan

Taxes and the 2021 budget were the centerpiece of Swarthmore Borough Council’s November 9 legislative session, as they had been at the previous week’s work session. Members wrestled with raising taxes to cover community priorities in a year when many residents are economically struggling because of the COVID-19 pandemic. Council must commit to a tax rate at its December 7 meeting.

Finance Committee Chair Michael Carey moved to advertise the budget Borough Manager Jane Billings drafted after the November 2 work session. This draft incorporates a 2.25% tax increase. Proposed expenditures include a cost-of-living increase plus mandated benefit contributions for borough employees; a 4% increase in the library budget to cover employee benefits and make up for projected pandemic losses; and environmentally conscious updates to buildings, including purchase of renewable natural gas and locally sourced renewable energy credits. 

A Raise for the Chief?

Chief of Police Ray Stufflet

Council member Jill Gaieski requested that the budget be amended to reflect a $5,000 raise for Chief of Police Ray Stufflet, which was not included in the draft budget. But a few council members were not comfortable with this addition. Ross Schmucki reiterated his stance from the previous meeting that no pay increases should be distributed to borough employees this year — not even cost-of-living adjustments. “I don’t think this is the time,” he said. 

Council member Betsy Larsen requested more information, saying, “I am uncomfortable with adding this proposed raise to the budget without discussing it in Public Safety Committee. I don’t know what the basis is for the amount. I’d like to have time to discuss this before we throw it into the budget.” Gaieski countered that the discussion was not about the merits of the raise, but rather whether to include it in budget considerations. Council decided to continue the conversation in executive session. 

Larsen also noted that the borough has recently increased its contribution to the Swarthmore Fire & Protective Service’s operating budget from $150,000 to $300,000. This money helps fund paid staff for the fire department, which has struggled to recruit volunteers in recent years. “If we’re talking about not increasing spending,” Larsen said, “maybe that fire company distribution should be on the table as well.”

Dipping Into Reserves?

Council also took some time to discuss the borough’s financial situation. Before 2016, the borough raised taxes most years to keep up with rising costs. Between 2016 and 2019, only one tax raise was required to pass a balanced budget, because of retirements in the public works and police departments, early payment of debt, and use of general-fund reserves. 

Schmucki said he was concerned that the borough faces a structural (that is, ongoing) deficit, due largely to continually increasing personnel costs. However, he said that 2021 should not be the year that council reinstates an increase. “We need to use this year to plan for how to solve the long-term issue” of raising revenue, he said. 

In light of the pandemic, Schmucki suggested that council should use reserve funds to cover the budget. “We have a very substantial reserve,” he said. “I believe reserves are for these very large problems.” He said that in order to remain a relatively diverse community economically, it was important to remember that even a small tax increase can be a real burden for some people.

“For me this vote is a one-off,” Schmucki said. “It’s a pandemic vote.”

Council President Mary Walk agreed. “I think this is a tough year to raise taxes,” she said.

Carey noted that the borough will almost certainly dip into the reserve this year; the only question is how deeply. He also cautioned that raising taxes too little, or not at all, this year might require a larger increase for 2022. 

Larsen expressed concern that 2020 might not be a one-off. “COVID is out of control, and 2021 could be worse,” she said. 

Council member Sarah Graden reminded her colleagues that raising taxes 2.25% would cost each household only about $30 dollars a year and fund many priorities important to borough residents. “I feel comfortable with that,” she said. 

Gaieski noted that cost-of-living increases might be larger for the police department than for non-uniformed borough personnel. The borough’s contract with the police department has expired and a new one is currently being negotiated. Police salaries are negotiated between the borough and the police union and therefore may be different than those of other borough employees. 

Seeking compromise, Carey suggested a plan to both reduce the proposed tax increase and limit cost-of-living increases to 1.75%, as well as trim funding for the library and for environmentally conscious building updates. But members decided they were not prepared to make that adjustment yet. 

Ultimately, council voted to advertise the original draft prepared by Billings – including any adjustments made in executive session – and resume discussion at the December meeting. Larsen noted that the public now has a chance to make its views known.

Walk agreed. “We would really like the public’s input on this,” she said.

A public presentation of the draft budget will be made at the council’s December 7 work session. It is available for review on the Swarthmore Borough website at: swat.ink/2020-budget-draft.

View this or any other Swarthmore Borough Council meeting.

The next council meeting is Monday, December 7, at 7:30 p.m. Details on the borough’s website.