#NewtownPA 2025 Budget: Questions Needing Answers

Just in time for Halloween on 27 October 2024, the “scary” Proposed 2025 #NewtownPA budget was “hung” (i.e., advertised in the Bucks County Courier Times).

The budget must be hung/advertised for 20 days before the Board of Supervisors (BOS) can approve it without major changes. But it will be on the agenda of the next BOS meeting on 13 November 2024 at which time changes can be discussed such as by adding a 2 mills tax increase for fire services (see end of article). But in that case, the new version probably would need to be re-advertised for 10 days, in which case it would be finalized until December 11, 2024. This gives the public some time to review and comment on the budget.

What makes the budget scary is the “budgetary maneuvering” of fund transfers, the terrible formatting, which makes it difficult to read and compare with previous budgets, the declining revenue and increasing deficit, and the double-digit salary increases! All this was already documented in comments made by residents. This article discusses some of these questions that need answers and some suggestions for changes.

There Are Lots of Questions & Few Answers So Far

Frank McCarron, a resident of Delancey Court, asked several questions in comments he made at the 23 October 2024 BOS meeting. Although the budget was not officially “hung” at the time, Mr. McCarron based his comments on the budget presentation made by the Township Manager at that meeting. He was specifically concerned about lack of funding for paid firefighters and did not understand why the budget surplus every year was much higher than anticipated.

After reviewing the preliminary budget that was “hung“ on 27 October, 2024, Mr. McCarron forwarded to me some “General Notes” that included more specific questions and concerns. With his permission, I summarize some of these below.

Regarding the Terrible Format of the 2025 Budget, Mr. McCarron had these comments and questions:

"The budget document is hard to follow. Last year’s budget, on the other hand, had a caption at the top of each page above the Revenue accounts and a caption on the top of each page above the Expenditure accounts. And at the end of the Revenue accounts, there was a separate line item for Total Current Revenues and a separate line item for Total Available Balance, which you would find before the accounts having to do with expenditures. And after the last of the Expenditure accounts, there was a total for Operating Expenditures, a total for transfers to other funds, a Total Expenditures with Transfers, and a net Results from Operations for the difference between current revenues and operating expenditures.” “Why did the format change for the 2025 budget?” asked Mr. McCarron.

Some format changes were made so that it is easier to distinguish revenue from expenses, but in my opinion, the 2025 budget format should have been changed back to the 2024 format before it was “hung” so that residents would be better able to review it and compare with 2024 and other years.

Regarding Declining Sources of Revenue, Mr. McCarron had these comments and questions:

“General Fund revenues are $1.2 million lower in 2025 than 2024.

• $(240,000) decrease in Local Tax (EIT Resident revenue down)
• $(216,000) decrease in State and Federal Grants
• $(96,000) decrease in Charges for services – REC
• Other decreases are State shared revenue, real property taxes, recycling grants, reimbursements.”

“Why are all these revenues declining?” asked Mr. McCarron.

Regarding the Increasing Deficit, Mr. McCarron had these comments and questions:

“According to the bar graph on page S-14 (see below), operational results are trending worse since 2021 and are negative in both 2024 and 2025,” said Mr. McCarron.

Mr. McCarron's questions regarding the deficit:

• Is this why the Township Manager is not proposing to add any new hires in 2025?
• Is there a hiring freeze in effect? Department heads have requested to hire several new employees in 2025, none of which are in the budget. That includes 5 in public works, as well as several new police officers and firefighters.
• Can the Township Manager confirm that he has talked to all the department heads and concluded that the 79 full-time employees at the end of 2024 are an adequate number for 2025?
• What about tradeoffs, such as the police chief buying 3 police cars each year instead of 4, so he can hire another officer? Has there been any instances in the past year when either the police or fire couldn’t respond timely to an incident?
• If we are instituting a hiring freeze in 2025, what does that mean for hiring in 2026, given that our operating deficit is trending worse each year?

Despite requests from department heads to hire more personnel (e.g., up to 5 for the Public Works Department, 4 for Police, 4 for Fire), no new employees are planned to be hired in 2025. What does this portend for hiring in 2026?

Salary Increases

The Township Manager has said that salaries of exempt personnel were adjusted to remain competitive in today’s market. Consequently, the budget includes double digit salary increases for exempt personnel [see table below; updated 12/7/24].

Source: Resolution ESTABLISHING PAY FOR EXEMPT TOWNSHIP EMPLOYEES

As you can see, executive salary increases are being increased by as much as 19% whereas support staff are getting only single digit salary increases! Not only does this seem high, but the difference in the percentage pay increase for managerial versus support staff is a concern. Support personnel, for example, may feel unworthy and seek employment elsewhere. Personally, this does not seem to me to be in keeping with how local government should be run. “I would recommend that these executive salaries be revised to a more modest single digit increase, in line with what is budgeted for support staff,” suggested one resident.

No Tax Increase?

A tax increase is not proposed for 2025, but due to continued operational deficit spending, a “freeze” on hiring new personnel, etc., the Manager stated - in his budget presentation to supervisors on October 9, 2024 - “future tax increases will be necessary.”

Some think the “future” is now!

Aside from the deficit, there is support for raising additional tax millage to pay for firefighter coverage from 6 pm to 10 pm, 7 days per week. Currently, paid Newtown firefighters are only available seven days a week from 6 AM to 6 PM thanks to a Staffing for Adequate Fire and Emergency Response (SAFER) grant awarded to the township in 2023 (read “Grant Ensures #NewtownPA Emergency Services Has More Firefighters to Cover Weekends and Respond Quicker”). That grant money runs out by 2027.

As Mr. McCarron noted in his comments, from 6 pm to 10 pm - after paid firefighters go home - restaurants in town are crowded and paid firefighter coverage during those hours would be much preferable to volunteers due to faster response times. The Fire Chief mentioned that the paid firefighters responded to a house fire at 5:11 pm within 5 minutes and contained the fire to the garage. What would have happened if the fire had been at 7:11 pm when there were no paid firefighters? Would the entire house have burned down?

How much would taxes need to be raised to pay for this increased coverage by paid firefighters when the SAFER grant runs out? Estimates range up to 10 mills (about $400 per year for the average Newtown Township homeowner.) I wouldn't be surprised if supervisors request a 2 mill tax increase for fire services at the upcoming 13 November 2024 BOS meeting.