The COVID-19 pandemic is having an economic impact on many families, and that impact is now being felt at the local municipal level.
At their meeting Monday, Hellertown Borough Council members were informed by borough manager Cathy Hartranft that year-to-date revenue from real estate taxes has dropped significantly.
Hartranft said tax payments are now “stagnant” and down approximately $101,000 from where they were at the same time last year.
The borough extended its deadline for discounted real estate tax payments from April 6 to June 8 earlier in the spring, as many municipalities have done in response to near-record unemployment levels. The base tax payment period was also delayed and extended from June 9 to Dec. 31, with any penalties waived until the new year.
In spite of these unprecedented steps, the revenue shortfall likely won’t be going away anytime soon due to “people being out of work,” Hartranft explained.
Borough council president Tom Rieger said another shortfall is connected to the real estate market. Namely, the real estate transfer taxes the borough normally receives from the sale of homes in town are down $23,000 from where they were at this time last year.
He said they expect to lose a quarter of the amount they budgeted for last year, since home sales were suspended in Pennsylvania in March and only recently resumed with restrictions in place.
The borough’s revenue from earned income tax (EIT) payments is also down substantially.
Rieger said that even if the borough only loses 15 percent of what was budgeted for this year, it will experience a shortfall of $105,000. A 25 percent reduction would lead to a $175,000 shortfall. The revenue stream is directly linked to the employment market, so the longer unemployment remains high, the more money the borough stands to lose.
To help recalibrate the budget to account for that shortfall, Rieger said the borough has reached out to state Sen. Lisa Boscola (D-18) to request information about the number of people currently receiving unemployment compensation benefits in the 18055 zip code.
Fewer cars on Main Street has also led to a sizeable decrease in the amount of money brought in from traffic citations issued by the borough police department.
As of Monday, Rieger said the total revenue shortfall for the borough for the year to date stood at about $170,000.
Consequently, staff and council will continue to monitor the numbers closely in the coming months, he said.
Council members also decided at Monday’s meeting not to reconsider their decision to shutter the Hellertown Pool this summer, as a result of the coronavirus pandemic.
They cited financial, safety and liability concerns in discussing the issue with pool manager Ed Kolosky, who presented a petition signed by more than 400 community members in making his case for opening the facility.
For additional information about the impact of COVID-19 in Hellertown, click here.
The next borough council meeting will be held virtually on WebEx on Monday, June 1 at 7 p.m.