James Boyle, the Wire
After years of holding off what Mayor Joseph DiGirolamo says was unavoidable, the Bensalem Council voted to enact a 1-percent earned income tax to help cover a $5.9 million gap in the township’s 2016 operating budget. The 4-1 vote has Bensalem joining a not-so-exclusive club of Pennsylvania towns that have an EIT.
“There are 2,527 municipalities in the commonwealth, and only 104 do not have an EIT,” said DiGirolamo, on the phone days after a four-hour council meeting that ended with the approval. “We’ve been holding it off for a while, but the option was either this or cut from our police force, and I refuse to do that.”
DiGirolamo says the EIT was the fairest way to come up with the necessary revenue to balance the $63.7 million budget, rather than an increase in property tax millage. Unlike the real estate tax paid by property owners regardless of whether they earn an income, DiGirolamo said, an earned income tax will be paid only by those residents of the township who are employed. Township property tax remains at 19.5 mills, or $726 for a resident with a property assessed at the township average of $37,251.
“Senior citizens and those who are out of the workforce, living on fixed incomes, will not be affected by the earned income tax,” he said. “An equally important factor in my decision to propose the earned income tax is the fact that the tax will also be paid by non-residents who work in Bensalem. People who work in the township utilize our services and our infrastructure, and under an earned income tax, they will share in the burden of helping to fund those items.”
The lone nay vote on the EIT, council member Bryan Allen, sent a lengthy email laying out his opposition. In the message, his biggest point of contention is with police costs, saying that the department’s expenses have increased 81 percent since 2006 and the 2016 police budget is up $2 million from the previous year without adding any new officers.
“Numbers were padded all over the budget,” Allen writes. “Despite the fact that gasoline prices have fallen every year since 2013 and are projected to fall further in 2016, fuel costs were budgeted much higher than last year for each department, in some cases by as much as $100,000 higher.”
He also questions the township’s continued use of the Lexington program, which allows officers and other department heads to take home official cars. The program started in the early 1990s as a way to raise visibility of police presence in the Bensalem neighborhoods, Allen says, but there has been an increase of unmarked cars included in the program that defeats the purpose.
“We have 23 unmarked cars being used for take home, 10 vehicles that are going home with people who live outside of the township, and motorcycles that must be kept in a garage,” Allen writes. “That does not help police visibility.”
According to Allen, Bensalem Public Safety Director Fred Harran defends the program by saying it reduces maintenance costs and increases response time to emergencies. Allen concedes the point, but says the offsets are erased by added fuel and insurance expenses.
DiGirolamo and township Finance Director John Chaykowski say Bensalem departments have cut costs as much as possible to avoid enacting an EIT. Many staff members have doubled up on work duties to avoid the need to hire more employees. The township also decided to not use the $45 million trust fund created from the sale of the water and sewer systems to make up the deficit.
“The average tax bill has only gone up $21 since I became mayor,” said DiGirolamo. “The problem is a lot of homeowners are getting their homes assessed, lowering the tax revenue. We have 100 police officers, with all of the health care and insurance costs that go with it. We have absorbed the costs tremendously for as long as possible and have cut other administrative expenses to the bone.”
Chaykowski said a third-party consulting firm estimated the EIT will generate between $8 million and $12 million for 2016. The township budget settled on the middle ground, anticipating a $9 million return.