The Tribune Democrat, Johnstown, PA

Local News

December 27, 2012

City Council approves budget; no tax increase

JOHNSTOWN — Lingering issues from the past greatly impacted Johnstown’s budget-making process for 2013.

The financial plan, which City Council formally approved on Thursday, calls for spending $3.6 million in debt services to help bring down the $16 million owed by the city. Approximately $2.5 million in pension payments will be made as the government struggles to meet the needs of former employees because retirees outnumber current workers/fund contributors 2 to 1. Johnstown is also scheduled to spend $8.1 million to replace, repair and maintain a generations-old dilapidated sewer system.

Those three items alone – debt services, pension fund contributions and  sewer improvements – account for 45 percent of the city’s $31.4 million total budget.

“You’re going to continue to see compounding issues that are going to require immediate attention as we go through the coming years,” said city finance director Carlos Gunby.

“The problem is we’re not generating enough new revenue to help take care of some of those old issues, so that’s got to be the key.” Gunby added, “We still have to be able to maintain and upkeep our infrastructure, which is getting older and older and older, but we also have to do it in such a fashion that we’re responsible in how we’re doing it.”

Even with the legacy and infrastructure costs, Gunby and council put together a budget without a tax increase. Next year’s millage rate will remain at 52.4821.

“Our revenue generation through tax, as well as all other revenue-generating streams, is going to be critical,” Gunby said. “Continuing the management of expenses is fundamental. But it has to be a well-orchestrated dance to keep the two in line.”

The city anticipates raising $4.5 million in real estate taxes, along with $3.1 million in other taxes next year.

“We have to work with what we’ve got. We’re tight on everything,” Councilman William Gentile Jr. said. “Only the good Lord will know how it’s going to turn out for 2013.”

Council expects to have $10.3 million in general fund expenditures.

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