Mystery numbers: Tax hike in, pay raises out, property inspector in, hiring out

Four major items came out of the November 7 extra budget meeting for 2019: a new property inspector, a hiring freeze, a freeze on certain raises, and a tax hike.

At the meeting, President Kelly Murphy said council had voted 6-1 at a personnel meeting to hire a full-time property inspector. Murphy said the position will be included in the 2019 budget and "the individual in question will be hired accordingly." The individual in question is assumed to be Jay Frerichs, who believed he had previously been offered the job. As of last week’s meeting, Frerichs was still in limbo; council was not certain it could pay Frerichs' promised $50,000 salary plus benefits due to lack of funds in its general fund account. Somehow, in the interim, however, the money showed up.

Although the sudden availability of funds was not explicitly explained, it presumably came from cuts in funding to organizations, a freeze on hiring and pay raises for department managers - and a proposed 21.2% property tax hike, all of which were announced Wednesday night.  Frerichs' salary was not the only consideration, however. Council also had to meet regular operating expenses for next year. Since many of the numbers at last week's meeting were left uncrunched, the budget and the hiring must have been worked out sometime between the two meetings.

The proposed tax increase will raise millage from the current 6.6 to 8 mills. The increase equates to an additional $140 tax bill on a property with an assessed value of $100,000. Taxes had been at 8 mills for several years until last year’s decrease to 6.6 mills due to the county-wide reassessment. (Taxing entities adjust their millage rates down in proportion to an increase in taxable assessment.) In November 2015, council shot down an opportunity to reduce millage a quarter of a mill, to 7.75. The vote was 4-3 to keep it at 8 mills.

In raising the millage back to 8 mills, Councillor Cleon Berntheizel noted that the borough had not increased taxes in a decade. However, even with last year’s decrease, Columbia’s municipal tax rate has long been among the highest in the county, second only to Lancaster City. Columbia’s current total millage [county (2.911) + municipal (6.6) + school district (25.8163)] is already the highest in the county - at 35.3273 mills - and this latest increase will push the total to 36.7273 mills. A property owner will bear an annual tax burden of $3,672.73 on an assessed value of $100,000, or $306.06 per month.

Councillor John Novak tried softening the blow of the upcoming increase by claiming that Columbia's school tax is currently 88 cents for each dollar of tax, while the county tax is about 3 cents, and the municipal tax will be a mere 8 cents for all municipal services provided.  However, the school tax rate of 25.8163 mills divided by the total millage of 36.7273 is .70; that is, 70 cents for each dollar of tax, not 88 cents. The municipal tax will be 22 cents for each dollar of tax, not 8 cents. [Note: This is different from calculating tax on assessed value, in which 8 mills equals .8 cents per dollar.]

Although millages from the three taxing entities were the only factors used in calculations at the meeting, the borough and the school district also jointly levy a 1% earned income tax, a real estate transfer tax, and a local services tax, formerly known as an occupational privilege tax. In the final analysis, factoring these taxes (which are variable) into the calculations renders any estimate of number of cents on each dollar of tax unreliable. Suffice it to say, Columbia Borough property owners will be paying more in taxes in 2019.


[A link to a .pdf of current county, municipal, and school district millage rates is HERE.]