Pattye Benson

Community Matters

Wow . . . Phoenixville Borough Faced With 24.7% Tax Increase in Proposed Budget

As the municipalities around us struggle with their 2011 budgets, there is depressing news from Phoenixville Borough. Residents of Phoenixville may be looking at a whopping 24.7% property tax increase according to the proposed borough’s 2011 budget.

The 2011 budget deficit is approximately $619K and the Borough Council is faced with a tax hike or spending cuts. Property tax increases have varied over the years – 2010 there was no increase; 2009 saw a 5.8% increase and in 2008 taxpayers received a 14.8% increase. Certainly, nothing like this proposed 24.7% increase! Although there has been discussion of police department cuts in the borough, so far that is only a rumor.

Although on the surface, it would appear that Phoenixville is a success story . . . there seems to be a new restaurant, coffee shop or boutique on every corner, apparently that is not an accurate picture. According to the Borough Council, corporate layoffs, reduced earned income revenue, slipping real estate transactions have all contributed to the challenges faced in the current economic climate. Tomorrow is the Borough’s Finance Committee meeting; here’s hoping for an alternative to the 24.7% tax increase.

Looking ahead to 2011, Phoenixville like many municipalities is struggling. Supporting revitalization is critical for future economics . . . effectively planning and implementing local economic initiatives needs to be a requirement and . . . stimulating local economies . . . all challenges to the newly elected in Pennsylvania. Phoenixville is included in Pennsylvania’s 157 jurisdiction – I hope that the residents can count on help from their newly elected representative.

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  1. I’m puzzled by the last line of your post, Pattye. Seems to me that this matter is the responsibility of the Phoenixville Borough Council. What specifically would you suggest Mr. Kampf do? BTW, I don’t recall anyone calling for Mr. Drucker to help Tredyffrin with its budget challenges in 2009.

  2. Yes, Mike the budget is the responsibility of the Phoenixville’s council. However, I think encouraging economic growth in the districts they represent, is a responsibility of the state reps.

    Mike, I appreciate you do not support the Paoli Transportation Center project but that’s a project that will encourage economic growth. Bringing money from Harrisburg home to the district through grants, such as the green roof project at Delaware Valley Friends School, is also associated with Paul Drucker.

    So no, Paul Drucker did no weigh in on the budget of the township nor should Warren Kampf going forward. But I do think that assisting their constitutents and encouraging economic growth in their districts should be within the scope of the job of state reps.

    1. We agree – the budget is the responsibility of the local government.

      However, we may not share the same vision of those steps that government should take to encourage economic growth. I tend to be wary of government interference in economic decisions as it distorts rational decisionmaking.

      You’re right that I have questions about the Paoli Transportation Center. The proposed investment is tens of millions of tax dollars – according to Tredyffrin’s capital plan, I think the total is more than $40mm. While most of this is expected to come from grants, that does not excuse local leaders from diligence in planning, because it is still taxpayer money. Further, I have no doubt that the cost will be far more than currently estimated – according to the work of Bent Flyvberg at Oxford, about 90% of large projects experience cost overruns, averaging 32%. Why? “Projects planned most optimistically will look more attractive to funders than those that are planned realistically” in other words, if we really knew how much it was going to cost, we might not do it. “Government agencies like to justify what they do [with] numbers,” he says. And sometimes officials engage in what he calls “strategic misrepresentation” when producing those numbers.”

      Further, it’s revealing that Phoenixville is experiencing these fiscal issues – it seems that only yesterday, Phoenixville was held up as a shining example of public money sparking its revitalization. Maybe they had overestimated the revenues from the economic development and/or underestimated the ongoing costs of supporting the infrastructure, police protection, etc? Let’s hope we’re not saying the same thing about Paoli ten years from now.

      Also, I’m not sold on these solar projects, a la at DVFS and Aqua America, and I’m not alone. Dated 10/25/10, Larry Summers and his policy aides have prepared an analysis of alternative energy projects, ” Renewable Energy Loan Guarantees and Grants”. The OMB specifically expresses concern about “the challenge of an insufficient number of technically and economically viable projects”. The solar stuff is flat-out not economically viable – with grants and loans paying more than 50% of the cost, it’s almost twice as the cost of nat gas generation and without subsidies, it’s more than 3 times the cost. Remember, the DVFS project is expected to cost about $425,000 and to save $11,000/year in electricity costs. Almost a 40 year payback! (even ignoring the cost of capital) and I’m told the equipment only has a 30 year life.

      In my opinion, we can do without spending big tax dollars on projects to “encourage economic growth”, that don’t meet any rational cost-benefit test.

      1. You make me laugh John Petersen,

        You say that “a State Rep’s ONLY purpose is to bring back as much of our tax dollars as possible.”. Gee, I must real be rusty on my civics, but I thought they also did things like: PROPOSE, CONSIDER, AND VOTE ON LEGISLATION.” Oh, and aren’t some of the laws that come before them related to health and safety issues?

        I also have to laugh at your attempt to absolve State Senator Andy Dinniman from playing any role in the economic development of his District. “Somewhat to far removed” you say? Just what the heck is he supposed to be doing for us? The way you describe it, the State Senate is a financial do nothing dinosaur that we taxpayers can probably do without. For the record: Although I am a Republican, I think Mr. Dinniman has been an effective Senator, and he is not as useless as you seem to be claiming.

  3. Just as a point of comparison:

    Phoenixville’s tax bite:

    Borough tax = 4.01 mills (2010) or $401.00 per
    $100,000 of assessed property value
    Chester County tax = 3.965 mills (2010)
    School tax = 27.06 mills (2009)

    PLUS a 1% earned income tax

    And a local services tax of $52/yr


    Tredyffrin Township:

    Municipal tax = 2.23 mills (2010)
    Chester County = 3.965 mills (2010)
    T/E tax = 17.47 mills (2009)
    LST $52/year


  4. Pattye, I have to agree with Mike in Berwyn on this one. With your reference to the newly elected in the 157th, you clearly single out Warren Kampf as being the one you expect to now save Phoenixville from its financial woes.

    I don’t blame Paul Drucker for Phoenixville’s $619,000 budget shortfal, even though he was the State Representative in Office at the time this deficit occurred. The responsibility for this budget problem rests squarely with those who serve on the Phoenixville Council.

    Also, why mention the newly elected in the 157th? What about those who are already elected, like State Senator Andrew Dinniman? A State Senator has more power and influence that a State Representative. Why not call on him to help as well?

    That being said, I have no doubt that Warren Kampf will do his best to help Phoenixville and all the municipalities in his district. Unlike the Phoenixville Council and the T/E School District which gotten themselves in some serious financial difficulties, Township Supervisor Warren Kampf succeeded in delivering a balanced budget in Tredyffrin. This was due to the sound fiscal policies that he, Paul Olson, Bob Lamina and the other Supervisors implemented.

    Warren has definitely displayed excellent stewardship by his prudent fiscal discipline, and as a Tredyffrin resident I am grateful.

  5. Cardboard check indeed.

    Mr. Kampf’s track record also includes:

    Voting for two tax increases – after elections in which no new taxes were promised.

    Raising no objections to taking $50,000 from SDGC to relieve the golf club of its obligation to build a path along Upper Gulph Rd.

    And leading a crusade to renege on Tredyffrin Township’s commitment to its police contract, which cost the township in legal fees and ultimately failed in arbitration.

    Support a cut in fire funding. And police funding. But give a country club a break.

    These are the priorities of our next State Representative. I can’t wait to see what “belt-tightening” he will support when he gets to Harrisburg.

    1. Hey Kate. In case you were away on vacation and have not heard, the election is over. Kampf won. You can stop campaigning now…. or can you?
      I would suggest you put your efforts into running for the township supervisor position. That way you can raise the police and fire funding, punish the country club, raise our taxes, and unbuckle all belts.
      The question is, will you run on that platform?

  6. I think that the higher level of government most certainly needs to keep better tabs on what their township governments are doing.

    When township governments put personal agendas, parks and other fluff as higher priorities then local infrastructure and safety, the lives of all the community are at the mercy. And in the long run, cuts to these things…will only cost people more later (on state, county and township level).

    I would suggest that any state rep >> REGARDLESS OF WHO << keep a close eye on the township spending and ensure basics are covered. Fire, EMS, Police, Roads, Sewer must come before Parks, grass cutting, Libraries. Someone needs to take a stand, why not have some pressure from above.

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