The Ellwood City Borough Council will vote next Monday, Dec. 21 on a proposed 1-mill property tax increase.
The tax increase will be part of the 2016 budget adoption. The 2015 budget has a 6.75-mill tax rate, which is set to increase to 7.75. Last year, there was a 0.5-mill increase.
This year, the owner of a property valued at $75,000 would have paid $506.25. With the tax hike, the owner will pay $581.25, a $75 increase.
The tax increase is primarily due to increased pension obligation for borough employees. Council had discussed the approaching problem in several meetings throughout the year, and council member Connie MacDonald stated that the pension obligations, especially for the police department, would become increasingly difficult for the borough to cover.
The borough’s responsibility for employee pensions is more $400,000, half of which is expected to be reimbursed by the state. The tax increase will cover the $200,000 difference.
The proposed 2016 general fund budget has no further increases and is around $5.2 million, an increase of $200,000 from last year.