Borough Tax Cap

The Borough Tax Cap (more properly called a revenue cap) is actually a cap on the total revenue the borough can take into its coffers in any one year. The total is based on the amount of revenue received in the previous year, plus a cost of living increase.

However, the "cap" is not a total cap; to be legal, certain exceptions had to be provided for - things that are allowed to raise the cap. They are as follows:

¨    New buildings and land coming onto the tax rolls

¨    New payments on bonds approved by the voters

¨    Payments for services approved by the voters

¨    New legal judgments entered against the borough

¨    Expenses for emergencies

You may have noticed that your property taxes have gone up over the years that the cap has been in place (since 1987). Most of the increase is due to voter approved bond issues (new schools, library, etc) and new voter approved services such as the Carlson Center. If we had not had the tax cap in place, you would have seen a much steeper increase in taxes. The borough assembly has actually unnecessarily loosened the cap once – by making a change in another part of the borough code of ordinances. In the future, you may want to repeal that provision to bring back the integrity of the original cap.

Because of the cap, if the Assembly decided to start a sales tax without allowing you to vote on it, they would have to lower other taxes (most likely property taxes) by the same amount. In order for the sales tax to be added without decreasing other taxes, they would have to allow you to vote on the sales tax as a new tax, therefore the tax cap is forcing them to allow you to vote on new taxes.

The tax cap is in place right now. There is a similar one in the City charter, where it cannot be changed without a vote of the people. The borough does not have a charter to protect the cap, but state law says that anything put on by voter initiative is protected from change or elimination for two years. For that reason, we must renew the cap every two years.

Please help us extend the protections of the tax cap for two more years, by voting YES for Proposition 1 Oct. 7, 2014. Thank you.

In 2015 we will need to do the same, for the 2016 ballot. We are on schedule of getting the signatures a year early each year, to avoid the rush of having to have the signatures before the fair is even over.

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