County adopts 2011 budget, no property tax increase

By MICHAEL P. RELLAHAN
Staff Writer

WEST CHESTER — The Chester County commissioners adopted a 2011 budget Tuesday that calls for no county property tax increase, but makes cuts in spending at Pocopson Home, reduces the amount of planned borrowing for the county's open space preservation program, and forgoes staff salary increases for the second year in a row.

The unanimous decision by the three-member board came after county administrative and financial staff were able to pare down a proposed 3.9 percent tax increase to fill a budget gap from increased debt service, lease payments, and reduced state and federal funding, among other changes.

The commissioners said they were pleased to be able to deliver a budget with no increase in taxes, but warned that the budget outlook at the state and federal level will pose financial challenges for the county in 2011, if those governments cut spending that flows to the county.

All three also defended their decision to cut in half the annual $20 million bor

rowing for open space projects in the county in 2011. The county could not afford to borrow the full amount, the commissioners said, but they also maintained there is less pressure to fund the same level of preservation projects in the coming year because the real estate market has dried up locally.

"Our staff heard a clear message from our citizens, that there should be no tax increase in Chester County," said Chairwoman Carol Aichele, noting that the county had not raised taxes in four of the past five years. "We heeded that message. Our challenges will be difficult in the coming years, but if anyone can do it, Chester County can."

All three commissioners heaped praise on the county staff and department heads for coming up with a budget that kept taxes down.

"Everyone came in prepared to make reductions, in line with their strategic goals," said Commission Terence Farrell. "The public should know that we are going to return value to the taxpayers. "

Commissioner Kathi Cozzone said that the county continues to face the financial burden of paying for unfunded mandates made by the state, which passes the cost of government on to local entities instead of paying for state services, like the Common Pleas courts.

"When we are talking about the pressures (those costs put) on property taxes in the county, the public needs to understand that it runs the gamut of services," Cozzone said.

The total county operating budget is shrinking this year from 2010's plan, down to $507. 1 million from $542.3 million. Real estate taxes — the only tax available to third-class counties in Pennsylvania like Chester County — account for 35 percent of the county's overall revenue, about $149.8 million.

The county cuts its full tax millage of 3.965 into four slices. In 2011, the taxes dedicated to the parks fund will stay the same at .156 mills, and the library taxes will also remain level at .190 mills. The general funds taxes will shrink to 2.730 mills from 2.853 in 2010. The amount dedicated to debt service — the amount of interest principal and interest paid on county bond issues — will increase to 0.889 from 0.766.

A mill in taxes equals $1 for every $1,000 of assessed property value. The county has said that a taxpayer with a property assessed at $299,657, the median market value in the county, will pay $658 in county property taxes.

The budget challenges that the commissioners said they faced this year, in addition to the reduction in revenue from the state and federal government, included a continuing drop in interest income, and increased costs in public safety, the courts, debt service, building lease payments, and county health care contributions.

The county will begin leasing a new office building for administrative and non-court related departments on West Market Street in West Chester at a cost of $2.4 million in 2011. The county signed the lease in 2007 before the current economic downturn that began in 2008.

The commissioners said they had heard a number of comments from land preservation advocates, organizations, and municipalities that the county should not turn away from a commitment made in the county election of 2007 to borrow up to $20 million a year to fund open space projects in the county. They decided to cut that to $10 million, and thereby decrease the pressure to raise taxes, because of the county's general economic outlook.

"There is no way in 2007 that we could have predicted this kind of a downturn in the economy," Aichele said. "Our taxpayers are struggling through this recession."

Mark Rupsis, the county's chief administrative officer and point person on the budget, said he had never seen an era in the county in the past 30 years when the real estate base was either flat or in recession. That, and the loss of interest revenue, put the county in the position of having to cut non-mandatory program funding across the board.

Aichele said that when the economy begins to improve, the county can return to its previous level of support for open space and other programs feeling the pinch.

"We can restore these programs as money becomes available," she said. "We are committed to open space preservation, and we will be the first ones back in the game." She contended that the county is still on pace to meet its goal of preserving 30 percent of its acreage by 2015.

To that end, Cozzone asked Rupsis to begin preparing some form of measurement so that the commissioners can see when development pressures on open space return. "I'd like us to be in front of the return of development, rather than behind it," she said.

To contact staff writer Michael P. Rellahan, send an e-mail to mrellahan@dailylocal.com.