Council adopts half-mill tax hike

Tentative city budget would see residents paying $50 more on $100K assessment

Despite a proposed 2024 budget last month calling for no property tax increase, City Council Monday approved a tentative budget that includes a half-mill hike.

If council adopts the budget next month, the tentative increase will mean that the owner of a property assessed at $100,000 will pay $50 more next year, for a total of $563 in city real estate tax.

The additional millage will generate $1 million, offsetting the $1 million in American Rescue Plan Act money needed to make ends meet in the proposed $38.2 million budget presented last month.

Rather than wait until a potential $1 million operational deficit was facing the city at the end of next year, when the ARPA money will be gone, council decided to bring in that sustainable revenue for the coming year, officials said.

"It's the responsible thing to do, to get ahead of the shortfall," said Councilman Dave Ellis.

Waiting until next year when the absence of ARPA money would leave a $1 million financial hole would mean the city would get behind, said Councilman Ron Beatty.

It would be "behind the eight-ball," said Councilman Jesse Ickes.

Without the additional money, the city would be at the edge of a "fiscal cliff," said City Manager Omar Strohm.

The $1 million in ARPA money is being used to "reconstitute" workforce reductions made in 2021, mainly in the Community Development Department, in reaction to COVID-19, according to officials.

In addition to the additional expense of those 14 "reconstituted" positions, police, firefighter and non-uniformed worker contracts call for annual wage increases, even as the cost of vehicles, equipment and materials continue to rise, putting continual pressure on city finances, said Beatty and others.

The city is trying to avoid the kind of gradual fiscal strangulation that occurred in the decades before reassessment, when Altoona dealt with structural limitations on millage, according to Ickes.

The extra money will help the city to avoid a repetition of workforce losses that accompanied the ending of federal revenue sharing 40 years ago, said Councilman Mitch Cooper.

The half-mill increase approved Monday was included in the pre-meeting agenda, and wasn't the result of a discussion at Monday's meeting.

The decision to include it in the prepared agenda resulted from individual discussions between Strohm and council members following Strohm's presentation of the no-tax-hike proposal in October, officials said.

There was no intention to conceal the tax-hike plan until after last week's election, according to Mayor Matt Pacifico and Councilman Jesse Ickes, who both won additional terms a week ago.

"It's a fair question," Ickes said.

But the idea for additional millage simply flowed from a closer inspection of the October plan presented by Strohm, Ickes said.

The tax hike would have been part of the tentative budget even if council's November meeting had preceded the election, he and Pacifico said.

The tentative budget, with its new total of 5.629 mills, passed unanimously.

In other matters, council Monday invited city residents to complete talent bank applications to aid it in filling open positions on city authorities, boards and commissions.

Talent bank applications are available on the city website, altoonapa.gov, under News & Announcements, in the column on the right.

The mayor nominates individuals for the posts, followed by a vote of council to confirm or deny.

Mirror Staff Writer William Kibler is at 814-949-7038.