Lebanon County Commissioners on Thursday, Dec. 7, approved a tentative $94.4 million county fiscal budget for 2024 that includes a tax increase of .50 mills to cover its $5 million budget deficit.
The county’s millage will increase from 3.8925 mills to 4.3925 if the budget is approved on Dec. 28 following a 20-day review period, which is required by law.
That means a homeowner next year will pay about $4.39 in property tax for every $1,000 of assessed value on their home. The last county real estate millage increase occurred in 2022 and is the third since 2016.
County administrator Jamie Wolgemuth cited an increase in labor costs as a driver that contributed to a $5 million budget deficit and necessitated the tax increase.
Union and non-union employees will receive 4 percent wage increases under the proposed 2024 budget. (One union, which has four employees, will receive a 5 percent wage increase.)
Wolgemuth’s budget presentation included a graph demonstrating that county wages have not matched the rate of inflation. In 2021, county wages compared to the Consumer Price Index was nearly negative 5 percent.
The county responded by conducting a salary study and implementing those recommendations. Wages were raised to be competitive with nearby counties competing for the same municipal workers and to be better aligned with the CPI, said Wolgemuth. The CPI is tied to the rate of inflation.
“During budget hearings, we tried to work through many of those, but much of this is due to personnel costs,” said Wolgemuth. “Over the course of time, those efforts have brought us up to the latest CPI.”
Wolgemuth said it’s difficult for a fifth-class county like Lebanon to compete financially for municipal workers with larger bordering counties and given the county’s proximity to state government.
“All of the commonwealth’s offices are only 30 miles from Lebanon County, so we find ourselves with a lot of employees who are finding DPW (Department of Public Works) maybe offering a better wage, and we’ve lost people to that,” said Wolgemuth. “But this (CPI-U) slide does demonstrate that there was a problem that was created in ’20 and ’21 and a reaction from the county that has got us back up to at least even with inflation.”
Wolgemuth also highlighted a number of planned capital improvement projects for 2024, including one to enhance security at the prison’s gates that will be phased in over three years given the $988,000 price tag to implement that measure.
“Going back 45 years when it (the prison) was built, it has electric controls so there are electrically controlled gates, not electronically, so it is time we need to upgrade them,” said Wolgemuth. “Some of them are not running as they intended and before we run into something that may pose a security issue, we want to make sure we upgrade those.”
Other planned projects include an upgrade to the municipal building elevator at the east end of the building, increased storage and server backup for information security in the county’s information technology department, video software upgrades for central booking and the county prison, and facility improvements to the prison’s roof and fencing system.
“There are some facility improvements at the jail, it’s a building that was built back in 1978 with a small addition put on in 2006,” said Wolgemuth. “But we have some sections of the roof that are in need of repair, so we have addressed some of them. … We have $250,000 in the budget for a significant portion of the roof replacement at the jail for 2024 as well as some fencing improvements.”
Wolgemuth said the prison escape in Chester County earlier this year prompted every jail facility in Pennsylvania to take a closer look at their facilities. In Lebanon County, that involved perimeter security, including video surveillance capabilities and existing fencing.
Wolgemuth also cited inflationary increases in health services for county inmates, noting a 3 percent increase, or $3.5 million, for 2024. Other additional 2024 operating deficit factors include the actuarially determined contribution to the retirement fund for county employees, at $3.7 million, and about $750,000 in additional county support to several agencies.
“We continue to lobby the commonwealth for funding support, particularly in mental health, but we have yet to have some of the cuts from 10 years ago restored,” said Wolgemuth. “Rather, we’ve seen stagnant funding in that department.”
Wolgemuth noted the county has $7.8 million in reserves, equating to about 46 operating days if the county found itself in a situation where the state failed to pass a budget or were to encounter another unexpected circumstance.
“That would fill the gap between the beginning of the year and until taxes came along or if some major disaster that the county must dig into reserves, we’re maintaining those,” said Wolgemuth. “It’s always an option to go to those reserves to balance the budget, but, in this case for example, if we were to fill a $5 million gap with our cash reserves, that would take us from 49 operating days to 15, which would be a very scary place.”
The final graph shown by Wolgemuth projects revenue of $60.2 million and expenditures of $60 million, leaving a surplus of $199,187 for the 2024 fiscal year.
“Now to put that into perspective, the cost of county government is about $255,000 per day, so a $199,000 surplus is basically a day,” added Wolgemuth.
One issue, however, that could impact the proposed millage rate and passage of the budget is the unsettled renewal by the state Legislature of the 911 surcharge program, which is funded by landline and cellphone users and utilized to cover operational costs for 911 centers.
Read More: Payment for 911 services through monthly user surcharge is in peril
Read More: Senate amends 911 surcharge bill, removes funding increase proposal
That funding mechanism is set to sunset on Jan. 31 if not renewed by the Legislature.
Wolgemuth said the county’s proposed budget incorporates the program being funded at the same level, which is $1.65 per phone per month. If the program sunsets or if it is funded at a lower level than the current rate, then there is a mechanism for the county to amend the budget for 30 days after it is passed.
“The county code provides for a mechanism to reopen a budget in January in the beginning of a commissioner’s term,” said Wolgemuth. “So, this January is that opportunity to reopen a budget. I don’t know of an occasion where that’s ever happened, it’s very uncommon.”
Wolgemuth said the county has three options come Dec. 28 if the Legislature has not renewed the 911 surcharges.
“They (the commissioners) could pass the budget and wait a little bit longer to see if the Legislature reacts,” said Wolgemuth. “The options in January would be to reopen this budget, they could recalculate the millage, they could assign some of the unassigned reserve cash to it or just ride it out and cut throughout the year as we go.”
The County Commissioners Association of Pennsylvania seeks a higher fee of $2.30 per phone. If the Legislature were to increase the rate to CCAP’s requested rate, Wolgemuth said the county’s 2024 proposed millage rate would come down.
The state Legislature has three days this week before the 2023 session ends for this year and three dates scheduled in January to act on the 911 surcharge legislation.
In other county business, the commissioners voted to:
- Approve nine provider contract amendments for the county’s Mental Health/Intellectual Disabilities/Early Intervention department for fiscal year 2023-24 totaling $324,627.
- Apply for two PCoRP loss prevention grants totaling $11,764.13. One grant is for 30 Streamlight flashlights for the sheriff’s department at a cost of $1,737 and for renewal of the annual Guardian System contract for inmate tracking and other services at the county prison for $10,027.
- Grant three applications for county aid through the liquid fuels tax program. The requests were for $2,013 for Cleona Borough for a 2023 paving project totaling $392,340; $4,604 for Cornwall Borough for yearly highway patching costing $4,604; and $6,923 for culvert work in 2023 at Fort Indiantown Gap in East Hanover Township for $56,923.06.
- Accept three hotel tax grant fund applications for the following organizations to advertise their events in 2024: Pennsylvania Chautauqua Foundation/Mount Gretna Art Show in mid-August for $7,500; the Community Health Council of Lebanon County’s Tour de Lebanon Valley on June 8 totaling $7,500; and the Singing Cedar Chorus totaling $2,500 for a performance on Sept. 24.
- Send a letter to Gov. Josh Shapiro on behalf of the Tec Centro Workforce Network for a line-item inclusion in the 2024-25 state budget totaling $15 million for the third consecutive year of support of bilingual community-based workforce development centers in the state’s third class cities. The network has one facility in Lebanon County.
- Hire Matthew K. Bugli of Palmyra as the county’s full-time solicitor and accept the resignation of former solicitor David R. Warner Jr., who was elected in November to be a magisterial judge in several western Lebanon County municipalities. Wolgemuth noted that Bugli will be located in the county building and work exclusively on county issues. Warner’s position was considered to be part-time.
- Promote Dawn Poliseo to deputy chief clerk.
- Approve two Act 137 (affordable housing funding) requests: Harmony Place project in South Annville Township for $100,000 and for 12 affordable housing units on Broad Street in Palmyra for Caring Cupboard totaling $250,000.
- Grant one real estate exemption for a fully disabled veteran.
- Accept the minutes of their Nov. 16 meeting, the treasurer’s report and various personnel transactions.
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