Budget Cuts Needed to Meet 2 Percent Tax Levy Cap

The borough’s financial committee members are currently facing the challenge of looking to make some cuts in order to meet the state-mandated 2 percent cap for the tax levy as they finalize the 2011 municipal budget draft.

Mike Kronyak, borough administrator and chief financial officer, told Mayor Rose Heck and council members Tuesday night he is currently making adjustments and the officials will receive a draft of the budget within the next 10 days.

Introducing the budget in its current state is not an option, he explained, as currently the tax levy, or amount to be raised by local taxes, is $270,000 over the required 2 percent cap.  This amount has to be eliminated, Kronyak said adding that asking for the public’s approval to exceed the tax levy cap was never an option they would have considered.

Kronyak cited both a decline in revenue and a decline in surplus as reasons why the numbers are currently above the tax levy cap. He explained that the problem isn’t exclusively caused by declined revenues but it has contributed to this more so than expenditures have as most investments are down and things like hotel taxes are down.  

“Our available surplus is down which is a $300,000 problem alone. Had that regenerated we’d be under the levy cap,” he explained.

Now they need to look into ways they can make cuts. Last year the borough made some cuts such as stopping garbage collection on holidays in order to save.

“Some will have to feel the pain a little more than they have already,” he stated.

As the introduction for municipal budgets has been extended once again most municipalities are expected to introduce their budgets towards the end of March.