Buffalo Township officials have yet to decide how they’re going to plug a $140,000 revenue shortfall in their $4.2 million draft budget for next year.
Options include a short-term loan, property tax increase or draw-down of federal American Rescue Plan funds.
Pulling from reserves alone wouldn’t suffice, as the rainy day fund holds just $87,000 as of last month.
“We’re about dry,” Township Manager Rich Hill said.
And while a tax hike is not a certainty, Hill acknowledged “you can see the handwriting on the wall” for one in the near future.
The real estate tax rate currently sits at 9.5 mills, meaning the owner of a property at the median assessed value of $22,290 pays $212 a year to the township.
As it stands, the draft budget sticks to this millage. Any change would need to be advertised at least 10 days prior to passage, and the budget must be adopted before the end of the year, making Dec. 21 the last possible day to go this route.
A 1-mill increase would generate an additional $80,000 in revenue.
Between the county, municipal and the Freeport Area School District, Buffalo Township property owners already bear the highest tax burden in Butler County — and it’s not particularly close.
Their combined tax bills are 12% higher than the next highest-paying community, Callery Borough.
That’s driven, in large part, by the State Tax Equalization Board (STEB), which seeks to balance tax burdens across communities in multicounty school districts due to differing assessments and property values.
Buffalo Township contributes about 75% of Freeport Area’s tax revenues, compared to just 25% from the Armstrong County communities of Freeport and South Buffalo.
District leaders have been among STEB’s loudest critics, lobbying state legislators to make equalization optional.
Regardless of district affairs, Buffalo Township is faced with its fourth deficit in as many years.
If officials opt to plug the hole with federal pandemic relief funds, they could simply accept the standard $10 million revenue replacement allowance from the U.S. Treasury and move their $775,000 award into the general fund.
That money must be allocated by the year’s end or go back to the Treasury anyway.
Plans to renovate the township’s joint administrative and police building recently fell through after bids came in higher than expected. A less ambitious remodel is still on the table, officials said.
The township is sitting on another $425,000-or-so in federal stimulus money that was routed through the county and, according to Hill, is not subject to the same spend-down requirements.
Supervisor Chairman Ron Zampogna raised the possibility of a loan, although its associated interest gives officials pause.
Notable spending categories and their totals compared to this year’s budget include:
• $1.42 million for public safety, up from $1.34 million.
• $944,000 in pension contributions, insurance and other miscellaneous expenses, up from $900,000.
• $540,000 for road maintenance and related public works endeavors, down from $639,000.
• $401,000 for general government administration, up from $365,000.
• $256,000 in debt service, up from $254,000.
The draft budget is available for public review at the township building, 109 Bear Creek Road.
Supervisors are expected to pass a final budget Dec. 23.