No tax hike expected in Adams County

Written by Dustin B. Levy/Hanover Evening Sun | Dec 1, 2016 3:24 PM

The Adams County Commissioners voted to not increase taxes Wednesday for the 2017 budget. (Photo: File, The Evening Sun)

(Gettysburg) -- The Adams County Commissioners determined during Wednesday's work session that they will not increase taxes to balance the 2017 budget.

Instead, the county will fund the $2.1 million capital budget with a blend of $1.1 million in county reserves balanced with a line of credit, expected to equal about $1 million. The capital budget, which represents capital expenditures requested by department directors, includes costs for a courthouse chiller, prison equipment, county building repairs and a telephone system, among other improvements.

This marks the third year in a row without a tax hike in the county. Commissioner Marty Qually claimed it's the longest span without a tax increase since the 1990s.

The decision was not unanimous. Qually opposed the adoption of the tentative budget and plans to fund capital improvements while Commissioners Randy Phiel and Jim Martin voted in favor of it.

Qually suggested a 0.10-mill tax increase, designated for capital improvements, to raise nearly $1 million instead of borrowing and adding to future interest payments. This means a home assessed at $100,000 would pay an extra $10 per year.

"It's easier to budget with small increases," Qually said.

Qually contended that by not raising taxes, the potential for a significant tax increase in the future increases.

"Next year will be a much larger tax increase unless by some miracle our tax base improves dramatically," he said.

Commissioners Jim Martin and Randy Phiel defended their decision because the county possesses $17 million in reserves, $10.2 million of which is not designated for projects.

"Taxpayers do not like you raising taxes when you have a large and or healthy reserve," Phiel said.

The overall budget, totaling almost $77.7 million, will undergo a 20-day review before an adoption slated for Dec. 21.

The tentative budget increased about 2 percent, or 1.4 million from the total budget for 2016. Increasing expenses for areas like information technology, the Adams County Prison and upkeep for the 911 radio project factored into the expanded expenditures in the budget.

The county will transfer in about $3 million in reimbursement from the pillow tax, or tax on overnight hotel stays in the county, for a balanced budget. The account accumulated these funds since the 5 percent tax was enacted 5 years ago with the county reimbursing itself for a 4.5 percent administrative fee.

Qually contested this decision as well, characterizing it as a "one-time payment to patch a hole in the budget."

"I think we need to do a better job with our long-term planning," Qually explained, adding that the $3 million would leave a hole in next year's budget.

The other commissioners held strong that, even with gridlock expected in the state budget, now was not the time for residents to pay higher taxes.

"I think we're prepared to do whatever's necessary at a later date to address these needs, but at this time, I don't think we need to address the problem with a tax increase," Martin said.

For Phiel, the county's reserve funds are substantial enough that a tax hike would not be appropriate.

"I don't think it's time to raise taxes," Phiel said. "And I think the public begins to question how large you let your reserve get and then still raise taxes."

This article is part of a partnership between WITF and the Hanover Evening Sun.

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