This article has been updated with corrected information. Bethlehem Mayor J. William Reynolds is proposing a 2.6% increase to city property tax rates, not keeping them level.
Bethlehem is in a 鈥渂etter financial position than we have been in a long, long, long time,鈥� Mayor J. William Reynolds said at his second budget address Tuesday morning.
The city鈥檚 2024 budget will increase property taxes by 2.6%, allocates $11 million in American Rescue Plan dollars and hires four paramedics to help address increased calls for service.
The city鈥檚 increase in revenue will outpace its expenses next year, allowing it to easily cover those costs, Reynolds said.
A $2.8 million increase in city expenses includes contractual salary increases, hiring the paramedics, and replacing police body and dashboard cameras. The city will be able to more than cover those expenses with a $3 million bump to its revenue from earned income tax growth, a tax increase and declining fees.
The proposed property tax increase would bring millage rates in the city’s Northampton County region from 19.14 mills to 19.64 mills, and rates in Lehigh County from 6.05 mills to 6.21 mills.
Reynolds credited former mayors and city councils with making responsible decisions that allowed the city to remain in a good financial position today.
For example, the city took out a 20-year bond to buy all the city鈥檚 street lights from PPL in 2007, the year before Reynolds joined the council, where he served until his election to mayor. Though some questioned the decision at the time, the city鈥檚 debt service and maintenance costs to acquire the lights was less than the fees it owed to PPL annually. The acquisition ultimately reduced energy costs by 70%, Reynolds said, padding the city with additional revenue to help it afford crucial expenses.
鈥淚f you didn鈥檛 think about it deeply, you鈥檙e like, why is the city borrowing money to take out a bond?鈥� Reynolds said. 鈥淏ecause it鈥檚 going to save us millions of dollars. At the time, that鈥檚 the easy type of thing to be like, ‘oh there goes the government borrowing again,’ but that鈥檚 not what happened.鈥�
Decisions like its street light purchase helped the city 鈥渁ggressively鈥� pay off its debt 鈥� Bethlehem has made nearly $115 million in debt payments since 2015, reducing its total debt to $55.9 million, which Reynolds claimed was 鈥渦nheard of.鈥�
“There is not a city out there that you’re going to find a better percentage, as far as your revenues versus your debt that you’ve paid off over a 13-year period,” Reynolds said.
The city’s 2024 budget also allocates nearly all of the remainder of its American Rescue Plan Act dollars. The city received a $34 million allocation from the federal stimulus package in 2021, which it can use toward lost revenue from the pandemic, addressing negative COVID-19 impacts, and making infrastructure and capital investments.
In 2024, the city will put $9 million of that toward infrastructure investments including street paving, fire engine and ambulance replacements and parks improvements. The remaining $4 million will go toward revenue replacement in 2024 and 2025.
The city allocated $7.2 million of the allocation in 2022 and $16 million in 2023 for capital investments as well as community initiatives like an affordable housing fund, anti-homelessness initiatives and a local nonprofit grant program.
The 2024 budget also includes around $10 million in stimulus funds that it allocated in past budgets but has not yet spent.
Bethlehem residents could also see an 8% increase in their sewer taxes this year, or equivalent to around $24 a year, according to a presentation from Water and Sewer Resources Director Ed Boscola last week. The proposed increase would help the city鈥檚 sewer system remain in good financial shape and pay for its $50 million capital plan, according to the presentation.
Bethlehem will hold a series of budget hearings beginning on November 15, before city council votes on the budget in December.
Reporter Lindsay Weber can be reached at Liweber@mcall.com.
