Allegheny Township budget status bleak but fixable; 3% tax hike proposed

Allegheny Township is barreling toward serious financial woes without some major changes, according to financial documents.

That’s why Township Manager Dan Miller proposed a 3% tax increase to help offset $4.2 million in expenses, but the modest hike is just the start of what likely will need to be an aggressive cost-cutting and revenue-seeking campaign to balance the books after years of covering deficits by dipping into the township’s financial reserves.

Under the draft budget for next year, total property taxes would rise from 16.5 mills to 17 mills. The owner of a home assessed at the township’s median value of $25,300 would pay an additional $12 next year. The increase would boost tax revenue for the township by about $60,000.

It would be the first township real estate tax increase in nearly 15 years.

Under the new millage rate, a total of 3 mills would be dedicated to debt service payments and the township’s fire tax. The remaining 14 mills is the state maximum allowed for Second Class townships.

Even so, Allegheny Township would have to draw $555,000 from its reserves to balance the 2025 budget, putting it on track to exhaust its rainy-day fund in 2026 without significant intervention.

“The truth of the budget matter is that, if we do not explore other revenue sources to balance without reserve spending, things will get very uncomfortable, very fast,” Miller said in his budget message.

Miller has floated stormwater fees, an amusement tax and other new revenue streams to keep the township solvent. These could — and might need to — be implemented before the end of 2025.

The township would not be able to raise taxes next year unless it applies for and receives permission from a Westmoreland County Common Pleas Court judge.

While it explores additional funding, Allegheny Township will have to find ways to save.

The preliminary spending plans trims $138,000 off this year’s budget, mostly through minor efficiencies across several departments and eliminating nonessential spending, such as nixing a $7,500 donation to Peoples Library for biweekly mobile library services.

“Nice-to-haves” from the public works department, such as rehabilitating Finnin Road, also will have to wait, Miller said.

Notable items in the draft budget, compared with this year, include:

• $1.39 million for police, up from $1.28 million

• $691,000 for public works, up from $670,000

• $302,000 for manager-secretary and related administrative costs, up from $207,000

• $184,000 in debt service, down from $316,000

• $121,000 in reimbursement from Kiski Area School District for school resource officers — a bill that had slipped through the cracks in previous years.

Following an analysis of township finances, the state Local Government Academy made several recommendations to right the ship:

• Set a fund balance policy requiring about three months of typical expenses to be set aside.

• Implement monthly financial reports, stronger internal spending controls and a comprehensive budget process.

• Develop a five-year capital improvement plan.

Supervisors Chairman Jamie Morabito expressed support for the budget, claiming “we have no options” other than lowering costs and raising taxes.

He partly blames a roughly $2 million expansion to the government center completed in 2021 for the predicament. Next year’s debt payment on the building will come to $90,000.

Debt service, however, is entirely paid for by tax millage set aside for that purpose.

Vice chairman Jeff Pollick also said he was on board with the plan, even as he’s “definitely disturbed” by the need for a half-mill hike.

Supervisor Mike Korns declined to share how he plans to vote, but noted his longstanding pledge to not raise taxes.

“There have been discussions of various fees,” he said. “I’m open to that.”

As for the renovations, which were partly planned and completed during his time on the board, he defended them as including much-needed roof repairs and reducing future maintenance costs.

Supervisors will hold a special meeting at 7 p.m. Thursday to vote on a final budget and tax rate.