An 18% property tax hike and increases to sewer and water fees are likely for Berlin property owners. It’s natural for no residential or commercial landowner to be happy with Town Hall, but one thing we applaud Berlin officials on is the transparency of this budget process.
While the huge tax increase of 18% is difficult to stomach, it’s important for Berlin property owners to remember it’s been 12 years since their property tax rate was increased. In fact, the tax rate was actually reduced by five cents in fiscal year 2013 because the town felt like its coffers were strong enough to give back to the ratepayers.
The new $.80 tax rate will result in an annual increase in taxes of $240 for a $200,000 valued property and $480 for a $400,000 valued property. Add to this a 25% increase to the sewer fee and a 5% bump in the water fees. Town property owners are in for a hit and the cost of living in Berlin will surge as soon as the budget is inked. The cost of going out to eat and buy retail goods in town will also be increased inevitably as landlords pass on their increased expenses to their tenants. Equally concerning is another, albeit smaller, tax increase and a hike to the stormwater fee are expected one year from now.
While this direction is cause for concern and its impact on households is immense, the severity of the Town of Berlin’s budget requires it. Moving forward, the town desperately needs to determine what level the town’s reserve fund should be stabilized at. This would be untouchable dollars in the event of an emergency. Current reserves are inadequate. Secondly, as Councilman Troy Purnell indicated this week, the town’s wastewater fund is a wreck. Purnell said, “All of the sudden the wastewater fund started sucking us dry. That’s what to be fixed in my mind.”
In hindsight, there is clear blame to go around at Town Hall as to how there was no mechanism in place years ago to prevent the town’s funds from being borrowed and transferred all over to address shortfalls. We think the elected officials should want to know how the town got to this situation.
While we continue to be harsh on the town’s mismanagement of the budget and its utility funds, we do give credit to town officials for how they handled this budget process. Long before any other government was publicly discussing budgets Berlin held a work session meeting in February when it was revealed a 34% property tax increase was under evaluation to avert further borrowing of general fund dollars to support utility funds, especially sewer.
Even before that, dating back to last fall, Mayor Gee Williams was giving warnings that taxes and fees would have to be increased in the next budget. The writing was further on the wall in December when a typically banal audit review was anything but ordinary. The auditor told the town its reserve fund is not adequate and will only fund five months’ worth of operating expenses in an emergency. Rather than use reserve dollars to pay for capital projects and boost under-funded utility accounts, the auditor advised the town must adopt a formal policy to adhere to in future budgets.
The state of affairs in Berlin is disconcerting, but town officials deserve credit for being transparent in this budget process for the last several months. Elected and appointed officials have been verbally roasted numerous times during the process, most of which was warranted, but they have kept their composure and pressed forward.
In the end, the consequence of this public reviewing of the budget is a more involved electorate. That’s a positive.