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It's budget season: Will your local taxes increase in 2018?

As Pennsylvania lawmakers emerge from their latest budget impasse and Congress weighs an overhaul of the tax system, local and county governments are hard at work setting their budgets for next year.

Valerie Arkoosh, chairwoman of the Montgomery County Board of Commissioners. County and municipal governments are in the process of setting their 2018 budgets.
Valerie Arkoosh, chairwoman of the Montgomery County Board of Commissioners. County and municipal governments are in the process of setting their 2018 budgets.Read moreMichael Bryant

As Pennsylvania lawmakers emerge from their latest budget impasse and Congress weighs an overhaul of the tax system, local and county governments are setting their budgets for next year.

Property taxes will remain level in Chester, Delaware, and Montgomery counties, according to preliminary budgets. But in Bucks County and some boroughs and townships around the region, property owners could see an increase in their 2018 bills.

School district tax rates, which account for the largest share of property taxes in Pennsylvania, are not set until June when local school boards finalize their budgets. Counties and municipalities — which must pass budgets in December — use property taxes to fund services including courts, community colleges, street repair, snow removal, police departments, and fire stations.

Tax rates vary widely, and homeowners' total bills also are dependent on their property assessment, but property taxes traditionally have been a four-figure burden for households across the region. The median annual bill tops $4,000 for homeowners in the Pennsylvania counties that ring Philadelphia. South Jerseyans have it worse: Property owners in Camden, Gloucester, and Burlington counties all have median tax bills of more than $6,000, according to the Tax Foundation, an independent nonprofit group based in Washington, D.C.

Bucks County's last tax hike, in 2012, amounted to an additional $45 per year for the average homeowner. But next year's preliminary budget projects a deficit of $18 million — and officials are still considering how to close that gap. Options include increasing property taxes, spending reserve funds, and cutting spending on other areas.

"I'm not sure if I can get to zero without a tax increase," said David Boscola, Bucks County's director of finance and administration. "But [the commissioners] haven't given me any indication whether this was a decision that they have made or not at this point."

Boscola blamed the deficit on cost-of-living pay increases built into labor contracts and additional spending to fight the opioid crisis — such as hiring more county detectives.

Montgomery County had an 11 percent tax hike in 2017, but still has the lowest tax rate of the four counties surrounding Philadelphia; Chester County raised the tax rate by nearly 5 percent in 2017. Delaware County officials plan to keep taxes level for the fourth year in a row.

Local leaders also are watching Harrisburg and Washington, D.C., closely as they make plans for 2018.

If the federal tax bill passes, "that is certainly going to impact our constituents … and that could lead to pressure from our constituents to eliminate or lower taxes," said Valerie Arkoosh, chairwoman of the Montgomery County Commissioners.

Arkoosh said she has voiced concerns to her county's congressional delegation about the tax plan — especially about the proposal to cap the property tax deduction and another measure that would end a deduction on interest for bonds that local governments use to borrow money.

Chester County's healthcare benefits costs will increase by $1.4 million in 2018, said Mark Rupsis, the county's chief operating officer, and the opening of a new firing range at the public safety training campus will increase the county's operating costs. But the county has healthy reserve funds, Rupsis said, which would be important if the state has another lengthy budget impasse.

"It's always on our mind because … over 40 percent of our budget is state funding," Rupsis said. "So it's always an area of concern."

Marianne Grace, Delaware County's executive director, said uncertainty over the future of state funding leads to careful decisions in the budget process.

"You would want to be aware that things can change," Grace said. "And I think that's really what you have to do in local government."

Among communities proposing tax increases are Cheltenham and Upper Darby — both of which already have relatively high tax rates.

Cheltenham's budget went up due to salary and benefits, sewer treatment costs, and debt payments on infrastructure improvements, according to a budget message posted on the township's website. The proposed tax increase would amount to an additional $65.80 per year for the average home with an assessment of $150,000.

In Upper Darby, Mayor Thomas Micozzie said the township's proposed 2018 budget includes an increase in property taxes from $20.37 to $20.95 per $1,000 in assessed value. He said most of the budget increase is to cover pension payments and public safety costs.

"There's no mystery in municipal budgets," Micozzie said. "We're all struggling."

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