Why residents will be paying more in York County taxes for 2022

Residents are paying more for gasoline, groceries and other necessities because of inflation, and they'll be shelling out more for York County taxes next year, too.

York County is proposing a 1.1 mill increase in its 2022 budget. The owner of a home assessed at $135,105 would pay an additional $148.61.

If approved, it would mark the first tax increase since 2017. The overall budget is $668 million. The general fund is nearly $237 million.

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The reason for the hike: Increases in wages, healthcare and other costs are outpacing the revenues coming in from property taxes, York County administrator Mark Derr said.

The annual increase from property taxes is about $2 million, but the county's  expenditures to pay its employees go up about $2.5 million, he said. The average wage increase is about 3 percent, and some are obligated under union contracts.

"So every year, we're about half a million in the hole just because of wage increases," he said during a recent commissioners meeting.

Healthcare costs went up 10.7 percent — an additional $2.6 million — in the past year. 

"... unfortunately, that's an annual re-occurring difference, and if you accumulate that over the last five years, you end up basically where we're at now with a $28 million hole in the budget," he said, adding that general inflation for other services has been a factor, too.

Meanwhile, the county is not addressing the salary and wage problems of its lowest paid employees and its ability to attract new ones, Derr said in an email. The county is still having trouble hiring in numerous departments, including 911 and Children, Youth and Families.

Vice President Commissioner Doug Hoke said it's been a tough budget year, and county officials continue to meet with department leaders and to work on tweaking its finances. 

"We're taking a very serious look at it — all three of us," he said. 

Commissioner Ron Smith agreed that it's a tough year for everyone. Revenue from the real estate market has been flat with not a lot of new development. In addition, money coming in from fines, costs and fees are down, too, because of the pandemic. 

Municipalities can bring in money from the York Area Earned Income Tax, but that's not a possibility for the county.

Going forward, he said, "hopefully we make good decisions and find additional savings."

The county had warned of its financial woes when the 2021 budget was approved last year. The board of commissioners used a projected surplus from 2020 to balance the 2021 budget.  

Here's what you need to know:

What new revenue sources is the county exploring?

The county is limited in the new sources of revenue it can seek. For example, it cannot bring in money with income, sales, or business taxes to help offset the real estate taxes.

But the board of commissioners hope to bring in some money with broadband.  

The York County Commissioners and the York County Economic Alliance have invested $26.5 million of funding from the CARES and Rescue Acts to help connect residents and businesses to the outside world.

Sixteen miles of the network have been constructed so far along the Heritage Rail Trail County Park, and an additional 144 miles will be built over the next several years, Silas Chamberlin, vice president of economic and community development at the York County Economic Alliance, has said.

The idea is for the county to build the "middle mile" while a private partner constructs the "last mile" to customers, Derr said. The parties would share in the revenue generated.

It has the potential to offset real estate taxes, but it's not going to happen overnight, he said. It's a long-term initiative.

Meanwhile, the York County Clerk of Courts Office has been working to increase collection of outstanding costs and fines, Derr said.

The total amount owed by defendants was $164 million as of the end of November.

Not all of the money is due to the county, but a significant portion is, Derr said.

Follow the money:Find out how COVID relief funds were dispensed in York County

Why isn't federal money helping to offset an increase?

The Coronavirus Aid, Relief, and Economic Security Act in 2020 reimbursed the county for the costs associated with the pandemic, Derr said.

The most significant cost was at the prison. Although the inmate and immigration populations were down, the county couldn't close sections of the facility to reduce staffing and operating expenditures.

As for the American Rescue Plan Act of 2021, the county received about $21 million to replace lost revenue for 2020.

The county had to look at revenue during the pre-pandemic years, project what the growth should have been in 2020 and then subtract how much came in last year.

"Although the amounts over the last two years restored our cash balances, with it being one time revenues, it didn't do anything to help with the imbalance between the normal revenues and expenses," Derr said in an email.

Much of the special funding also was distributed into the community to keep businesses, nonprofits, the tourism industry and others in operation and residents employed, Hoke said.

How has the termination of ICE contract impacted the budget?

The York County Prison stopped housing immigration detainees in August after negotiations with U.S. Immigration and Customs Enforcement were unsuccessful.

The termination of the contract has had some impact on the budget, Derr said, but it's not as significant as it appears.

The federal government was reimbursing the county for expenses it incurred to house the detainees. The county had to add up the costs to operate the facility and then divide it by the number of detainees (the general and immigration population) to determine the daily rate per person. 

He pointed out that electric bills do not decrease in the same proportion as the population. He also noted that social distancing is still required because of the ongoing pandemic, and that drives excess costs.

A committee is reviewing different options for the former detention center as well as the old outmate facility, which has moved back into the main prison building, Derr said. Some of the options could generate revenue.

What's next?

The final budget will be presented at the Dec. 15 meeting.

It is available online at yorkcountypa.gov or at the York County Administrative Center, 28 E. Market St., York.