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Lancaster City Council passes $71.8 million general budget, along with hikes in real estate tax, fees – LNP | LancasterOnline

Lancaster city households are facing, on average, a $200 increase in fees next year for all municipal services after City Council approved a $71.8 million general budget for 2023 Tuesday night.

This includes fee increases of $96 for sewer, $60 for water and $24 for solid waste and recycling. Homeowners will also see an 8% real estate tax hike.

Higher debt service payments, increasing costs for medical insurance and inflation were cited by Mayor Danene Sorace as to why fees are going up now.

“I am not naïve to the fact that, cumulatively, these increases will be difficult for those on a fixed income,” Sorace said when the budget first was unveiled earlier this month. “And yet, without these investments, we would not be able to continue to provide the clean drinking water we depend on, effectively manage our wastewater, meet EPA requirements for stormwater or keep the trash trucks hauling.”

At recent City Council meetings, several community members have brought up concerns about the increase in fees.

“Most of you have been buying some eggs and milk, and you know how expensive it has become. … And you are raising all the fees,” city resident Ivan Acosta-Velez said after the first reading of the water and sewer rates on Dec. 13. “You are doing everything at the same time. The city is not going to fall apart, but you are going to have people that won’t be able to afford their homes.”

Starting January 2023, the standard annual fee for solid waste and recycling will be $312, billed at $78 per quarter. For sewer fees, there will be a minimum charge and a consumption charge. The minimum charge, depending on the size of the service line, starts at $94 per year. The consumption charge is set by a metered volume rate; $10.99 per 1,000 gallons for the first 75,000 gallons per quarter. Water rates are $6.84 per 1,000 gallons for the first 75,000 gallons per quarter. The base rate for the stormwater management fee is $75 per 1,000 square feet per year.

Last-minute motion fails

Homeowners in the city will also see their real estate tax bill go up 8%, which is the first increase in four years. While the budget was unanimously approved in a 6-0 vote with Council Member Faith Craig absent, Council Member Janet Diaz opposed the tax hike bill, and it was approved in a 5-1 vote.

Diaz made a last-minute motion to amend the bill and set the tax increase at 5%, followed by 1% increases in the next three years. The motion failed after a lengthy discussion.

“Our community is hurting,”  Diaz said. “I see it every day, where people are just not making it. So I figured if we can just make that adjustment and then put the next three years increments added to it.”

The 2023 budget was approved before the new tax bill, meaning that a lower tax rate would have created an unbalanced budget.

“We are required by state law to have a balanced budget,” Sorace pointed out, later adding, “Until tonight, I had no awareness that there was effort to propose an amendment to reduce the increase in taxes from 8% to 5%. At no time were any issues raised with me or any of the directors during the seven-hour budget meeting earlier this month.”

Council Member Katie Walsh said there are no guarantees that whoever sits on City Council in three years would be willing to do a 1% increase, since the budget and tax rates are a yearly decision.

Council Member Jamie Arroyo said, “The consequences of not passing a balanced budget would mean lesser quality of services, potentially cuts to public safety, and I don’t think anybody wants that.”

Since 2919, the real estate tax rate has been at 11.7 mills. After council’s approval, the rate is increasing by 0.94 mills, to 12.64 mills. For a property assessed at $100,000, the yearly property tax bill is now $1,264.

Key numbers

Property taxes are expected to make up 46%, or $33.3 million, of the $71.8 million general budget. The tax increase will help the city finance its staff, particularly within public safety, which will receive $42.5 million under the new budget.

“Expenses across the board are up,” Council President Amanda Bakay said. “The city is not immune to this, and the antiquated tax system that we must operate in means we have limited options to deal with it.”

The city’s combined operating budget is $141 million. Of this, $71.8 million falls into the general budget, and the rest into the following: Water fund, $35.7 million; sewer fund, $21.8 million; solid waste and recycling fund, $6.1 million; and stormwater management fund, $5.5 million. 

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