No Tax Increase in 2014 Budget Proposal

The Warminster Board of Supervisors unanimously passed a preliminary 2014 budget last week that holds the township tax rate even at 17.07 mills and approves several capital improvement projects, but carries a warning that more needs to be done to cover a possible shortfall in 2015.

A property owner will pay one dollar in property tax for every $1,000 of the taxable appraised value of the property.  If the Bucks County assessed value for a Warminster homeowner’s property were set at $40,000, then one mill of taxes would equal $40.

The board of supervisors will vote on the final 2014 budget approval on Dec. 19 at 7 p.m. in the administration building. 

The proposed $28 million budget allows for several capital improvements in the general fund, including a new roof for the Warminster police station and the Ben Wilson Activities Center. The police department will also receive two cars, down from the requested eight vehicles, and 32 new summer uniforms that Chief James Donnelly will add an extra level of defense for the officers.

"They are the first thing a suspect sees," said Donnelly. "If the officer looks professional and authoritative, it can quickly diffuse a situation and prevent any possible injury to the officer."

As presented, the 2014 fund balance carries an approximately $2 million surplus, money that Manfredi says will go directly to help fund benefit costs for 2015.

"The greatest fiscal challenge for 2014 and beyond is meeting what is quickly becoming an unsustainable and financially crushing pension obligation, combined with equally crushing healthcare obligations," Township Manager Richard Manfredi wrote in the budget summary.

Township administrators are hopeful that collective bargaining employees will come to the table to discuss the health care plan. During a public meeting that previewed the budget in November, risk management consultant Neil Model told the supervisors that the township's health care costs rose 31 percent for 2014, a $750,000 increase. Model placed a bulk of the increase to costs from the Affordable Care Act, including new taxes and Independence Blue Cross passing on some expenses.

"The new law states that employees' out-of-pocket expenses can't exceed $6,000 for individuals or $12,000 for families," said Model. "IBC has increased rates to make up for the difference."

Model also credited the health care cost increase to general inflation trends and Independence Blue Cross calculating a new net-loss ratio, saying that the insurance company had been losing money on generated claims.

"For every dollar they collected in premiums, IBC was paying out $1.70 in claims," said Model.

Model recommended that revising the entire plan design will help bring down the costs for 2015. The fact that the township also covers the cost of co-pays means there is no deterrent for employees to monitor doctor's visits.

"It doesn't cost the employees anything to go to the doctor for every little things, so there is no sentinel effect to the plan," said Model. "This is a very rich plan. It's more than a Cadillac plan, it's a chauffeur-driven Rolls Royce."

There may be some wiggle room in the health care expenses, but that flexibility is nowhere to be found for the pension costs. The effects from the economic implosion in 2008 continue to ripple as the township is required by the state to cover the $10 million gap created by the Great Recession.  

"The municipal pension crisis is not gaining the same level of concern that the school pension has," said Manfredi. "Taxpayers need to force the issue with the state. It is a challenge to provide the same level of service with these costs. It is putting municipal government out of business."

Another side effect of the 2008 economic crisis has been the decrease in assessed property values, said Manfredi. The projected revenues from 2014 real estate taxes are predicted to be approximately $300,000 less than 2013.