Editor’s note: An update was added to the end of this article on Dec. 14.
The Delaware County Council is considering a five percent tax increase for 2024 to raise about $10 million in new revenue as the recent years of expansive spending appear to be catching up with the county council.
The proposed budget for next year also plans to tap a reserve fund for $40 million as well as spending nearly $10 million in non-recurring federal funds to keep the budget balanced, for a total of $50 million in spending that may be difficult to recreate in 2025.
Broad + Liberty sent an inquiry to the county to determine if council would seek an additional $50 million in property tax increases, or alternatively, enact spending cuts for a similar amount in 2025 when the deficit can no longer be camouflaged by non-recurring federal funds.
A county spokesperson did not respond with specifics to that question.
“County staff and Council Members continue to fine-tune the budget. The current proposed budget submitted by staff anticipates a real estate tax increase of 5%,” spokeswoman Adrienne Marofsky said.
“However, the 2024 budget will be reviewed by County Council at a public hearing on December 5th, and at subsequent Council meetings on the 6th and the 13th. Final decisions on tax rates and 2024 expenditures will be made as part of the ultimate budget approval by Council,” Marofsky added.
Democrats took control of the five-member council after the November elections in 2019. Among their top priorities were the creation of a health department and taking over management of the county’s prison which had been privately run for the three previous decades.
Those projects are showing strain.
For example, the county’s line item for the George W. Hill prison held steady between $46 and $47 million dollars for 2020 through 2022. The county took over the management in May 2022.
In 2023, the prison budget ballooned to $52.8 million, and the 2024 budget shows an allocation of $56.6 million — an eight percent increase from 2021, the last full calendar year the prison was privately operated.
In 2021, a year before the government would actually take over management of the prison, a consultant provided the county with three different budget scenarios, the topmost estimate being $49 million per year if the prison were nearly full. But the county has clearly shot past those predictions, as the actual $52.8 million in prison spending this year came with the daily prison population being down about twenty percent.
The county is also expecting to tap nearly $10 million in one-time funding from the federal American Rescue Plan Act which was signed into law in 2021 and was designed to help local governments recover from difficulties sustained from the 2020 Covid pandemic. ARPA funds will no longer be available to the county after 2024.
Another significant increase is the line-item budget for the county solicitor. In 2020, the last year of Republican control, the solicitor’s budget was $1.6 million. In 2021, the first year of Democrat control, that line item expanded to $2.18 million.
For the solicitor’s office in 2024, council is proposing $3.9 million, more than twice the spending for the same office in 2020.
As Broad + Liberty has noted, the county has been spending millions more on legal help from outside attorneys in the last three years.
Warning signs that the county’s spending might be unsustainable have been flashing for well over a year.
In a presentation slide from 2023 dealing with personnel costs, the county noted that it “may not be able to meet its long term needs without increasing revenues.”
In the runup to this year’s election, County Councilor Christine Reuther acknowledged that “fiscal constraints” — in particular, having a variety of revenue sources — were what she saw as her biggest challenge.
“We have a system of local government funding in the state of Pennsylvania that relies almost exclusively on the property tax and then on various fees and things that the state legislature allows us to charge,” Reuther told WHYY.
WHYY reported that Reuther said “it is really hard to fund expenses when the services, wages, in an inflationary environment, keep going up.”
“But our tax base does not,” Reuther said.
To put these “fiscal constraints” in perspective, a five percent increase in real estate taxes this year covers $10 million of the county’s apparent aggregate structural deficit of $60 million. Without drastic cuts in personnel or services, council will be forced to raise property taxes by an eye-popping twenty five percent in 2025.
According to U.S. Department of Labor data released on November 14, 2023, the United States’ annual inflation rate slowed to 3.3 percent in October 2023 from 3.7 percent in August and September 2023.
Although “transparency” is the first word of the county’s motto, obtaining a copy of the proposed budget isn’t exactly easy at the moment. Rather than putting the document online as was previously routine, citizens now have to go to the county clerk’s office to read the document, similar to last year. It should go online later in December, however.
Broad + Liberty also had to pay $90 for a scanned copy of a paper document that clearly already existed as an electronic document.
Additionally, the document available for public inspection was changed at some point.
When Broad + Liberty first sent a research associate to review the document on Nov. 16, 2024 tax revenue was listed at $174.8 million, more in line with actual property tax revenues from 2020-23. And the use of the county’s reserves, called the “fund balance,” was $48 million.
When the researcher returned on Tuesday, Nov. 28, the figures had changed to those mentioned at the beginning of the story — that 2024 taxes were expected to come in at $183 million, and the fund balance spending dropped to $40 million.
Without the $10 million real estate tax this year, the county’s structural deficit in 2024 would approach $60 million.
UPDATE: On Dec. 13, the Delaware County Council adopted its proposed budget which was slightly modified from the version discussed in the original version of this story. The most significant change between the early version discussed in this story and the final budget adopted is the county says it will use $46.5 million from the fund balance, instead of an original amount of $40.5 million from the fund balance, which is essentially the reserve fund. Correspondingly, the total budget also goes up about $6 million, from $882.6 million, to $888 million.
This increase in spending from the fund balance would suggest the county faces a structural deficit in the neighborhood of $65 million, as opposed to the $60 million reported on originally.
Todd Shepherd is Broad + Liberty’s chief investigative reporter. Send him tips at email@example.com, or use his encrypted email at firstname.lastname@example.org. @shepherdreports