DV Journal

(This article first appeared in Broad + Liberty)

For two hours, the residents vented their anger.

“I know we’ve got a tremendous increase that’s being proposed to our taxes. I know what it’s like to struggle to make ends meet and the county, the state, the federal government — everybody has to deal with that. The problem here is the county can at the stroke of a pen, just get more money. You can impose that on every citizen that’s here. Myself and every citizen that’s here can’t do that. We have to seek other means. In other words, we’ve got to tighten our belt and we’ve got to cut the fat.”

Pat Carnevale wasn’t alone. He was one of dozens of voices expressing dismay and frustration last December as Chester County was on the cusp of approving a thirteen percent real estate tax increase — three times larger than the previous four percent tax increase in 2020.

If Chester County had any grace, anything that shielded it from more wrath, perhaps it was only that weeks before, neighboring Delaware County had dropped a whopping 24 percent tax on its citizens. As bad as a thirteen percent tax increase would be, at least it wasn’t Delaware County.

Chester County’s three-person board of commissioners empathized with the frustrated crowd. But when the rhetoric, empathy, and public comment was over, the two Democrats voted ‘yes’ on the tax increase, and the lone Republican voted ‘no.’

Just before casting his ‘yes’ vote, Chairman Josh Maxwell (D) said inflation and other minor issues had nibbled at the edges of the budget, but citizens could rest assured knowing most of the thirteen percent increase was really due to two “big ticket” items: a county-wide refresh of the radios used by every law enforcement agency in the 759-square mile county, and a series of upgrades to the county prison.

The county last updated the radios in 2015, and with a ten-year lifespan, it was time to reinvest.

As for the prison, was there anyone in the county who had forgotten the saga of Danelo Cavalcante, a Brazilian national who escaped from the county prison in the fall of 2023, and remained on the loose for two weeks?

“I don’t want anyone here to think that this county is interested in expanding government tremendously or increasing annual spending in perpetuity,” Maxwell reassured the crowd that had just vented its anger at him. “Those are the two big ticket items that in addition to a little bit of inflation we absorbed this year.”

Despite Maxwell’s reasoning, a Broad + Liberty analysis of the last ten years of budgets for the county seriously undermines that rationale. The county disputes many parts of the analysis, which will be generously incorporated into the story.

The analysis shows for the millions of dollars devoted to prison upgrades, much of that up-front capital was provided by a bond sale — in other words, the county took on debt, and would be paying it off over the course of several years.

As for the radios, a sizable chunk of the money set aside for that category of spending in the budget was coming from federal and state grants.

The county’s prison spending is spread out over ten years which should have spared citizens from the need for a massive, one-year tax hike. And the county’s new law enforcement radios could have been financed to lessen the pain, but officials didn’t examine the possibility.

The Broad + Liberty analysis that follows below asserts the county’s tax increase was needed to cover years of growth in spending across numerous areas of county government, much of which was driven by salary increases and spending growth in the “human services” category.

Prison upgrades

At the December meeting, Commissioner Maxwell listed multiple improvements to the county prison, “about $6 million going towards security upgrades to that prison that hasn’t been touched in decades,” he told the angry crowd.

Those improvements included new security features like specialized fencing, and adding a K-9 unit. Furthermore, the county was investing in the core building by replacing the roof and upgrading features like the air conditioners and air handlers that provide fresh air to the interior. Increasing staff salaries was also a priority.

Before diving further into the prison spending, it’s important to understand a couple of features of large government budgets and how some of those features work in Chester County.

Large purchases or investments are generally called “capital expenditures” or “capital spending.” A good definition can be found at business-standard.com, which says, “Capital expenditure is the money spent by the government on the development of machinery, equipment, building, health facilities, education, etc. It also includes the expenditure incurred on acquiring fixed assets like land and investment by the government that gives profits” or dividends in the future.

Chester County splits its capital spending into two different funds: the Capital Improvement Fund which pays for capital expenditures by borrowing money by selling bonds, and the Capital Reserve Fund, which pays for large investments with cash.

The prison upgrades were largely placed under the Capital Improvement Fund, which, as just explained, means those purchases were financed with debt.

Page 267 of the 2025 final budget document provides a breakout of the Capital Improvement Fund, and shows $3.7 million for the prison roof replacement, and another $3.7 million for heating and air replacements. Together, the two projects total $7.4 million.

 

 

According to all of the budgets from 2016 to present, the county’s outlays for its borrowing — usually called “debt service” — was not set to be significantly greater in 2025 than in any of the previous four years. Taking all that context together, it’s correct to say the prison upgrades were expensive, but that the cost is to be spread over many years.

(Source: Chester County budget documents, 2016-2025)

With this in mind, Broad + Liberty asked why a steep increase in taxes was necessary if outlays for debt service for the prison upgrades weren’t significantly increased as well.

“The County drew down the Debt Service fund balance in 2024. The 2025 budget necessitated an increase in debt service millage to cover the budgeted [debt service] expenditures totaling $55.9 million in 2025,” said, Julie Bookheimer, the county’s chief financial officer.

The first part of the answer is incomplete without the context of how much the Debt Service fund balance should be, and where it stood at the beginning of the fiscal year. The second part of the answer merely repeats the question in the form of a statement.

When the county was asked this question again in a different way, the county replied: “While prison facility improvements are in the Capital Improvement Fund, there are more than $3 million in increased prison-related costs within the 2025 operating budget.”

In this response, the county acknowledges that most of the prison one-time improvements will be financed with bonds, and as such, the impact is spread out over many years, but that the prison line-item in the operating budget has gone up by $3 million, meaning that is new spending that will likely be recurring every year.

The county further itemized the $3 million by saying “$2.35 million [is] for medical treatment, and other items such as food and clothing supplies, repair and maintenance, training and staff development, utilities, and vehicles and general expenditures related to the addition of K9s.”

Still, that is only $3 million in “new” spending in the operating budget. The thirteen percent tax increase is set to raise an additional $26.8 million. There’s a long way to go.

Law Enforcement Radios

At the December meeting, Maxwell gave an explanation of payment for new law enforcement radios that would appeal to the fiscally conservative.

“These police radios last ten years, so we’re moving them from one side of the budget to another,” he began.

“Previously the county would take on debt for twenty years to pay for those types of work, but the radios only last ten years. So, next year you’re going to be paying for two radios for your tax bill, one that’s no longer working and one we just bought for our police officers. In eleven years, because we moved it over and now we’re paying it as you go and not taking on bonds for it — eleven years from now, we’ll only be paying for one radio. So we have to make a sacrifice today, but it’s not a choice that this board made ten years ago. But eleven years from now, we won’t be paying for things that we aren’t using anymore,” Maxwell concluded, subtly portraying his Republican predecessors as less responsible.

The undisputed cost of the radio purchase is $12 million dollars. One item left unmentioned by Maxwell, however, was that the county was splitting the purchase across a two-year period, about $6 million in 2025 and another $6 million the following year.

The purchases are listed in the budget’s “Capital Reserve Fund” which, as explained before, is a fund for capital expenditures that are not financed but are on a pay-as-you-go basis, like Maxwell said.

Maxwell’s speech about the radios could be seen as offering a false choice to residents, however. In it, he talks about financing the purchases for 20-year periods. Financing instruments, like bonds, can be issued for a variety of time periods.

Broad + Liberty directly asked why the county did not take on ten-year debt for a ten-year capital investment, or, why the county didn’t take out 20-year bonds and pay them off ahead of schedule. Either option would satisfy Maxwell’s desire to “only be paying for one radio” eleven years from now.

“At that time, the interest rates were higher than in previous years. Therefore, the cost to borrow was (and is) higher. Debt incurred over twenty years should be for assets that have an expected life of twenty or more years. This equipment has an estimated useful life of ten years or less. The County continues to manage debt in a responsible manner as attested to the Triple-A rating by all three rating agencies,” Brookheimer said.

When asked, the county said it did not do any analysis at all on financing the radios, regardless of whether over a ten-year period or otherwise. The county further said it did not shop for loan pricing from the Delaware Valley Regional Finance Authority. The authority is an agency in southeast Pennsylvania created by Philadelphia’s four collar counties to tackle problems just like this. The counties pool their money together into the DVRFA which then gives bond loans at an interest rate lower than the retail market. In essence, the four counties created their own credit union.

Finally, the Capital Reserve Fund — the capital expenditure account that does not borrow but makes investments on a pay-as-you-go basis — is substantially funded from outside sources in the 2025 budget. The county agreed that “the radios are 43.7 paid for by federal and state grants.” This, too, would seem to mitigate the impact to the taxpayer. When Maxwell and the county talk about the radios, they give the full price tag of $12 million to justify the price increase, but seldom mention that grants will pay a considerable portion.

General Growth

Setting aside the issues of the prison and radio improvements, the county has seen growth in the last five years, in population, the tax base, and in the overall size of the county government.

It is important to understand this next part of the analysis focuses exclusively on what’s called the “Operating Budget.” This is the part of the budget over which the commissioners have the most control on an annual or even day-to-day basis. This analysis excludes the “consolidated budget” which contains many items that are done in partnership with the state or federal governments, and which also remain mostly static in cost from year to year.

According to data from the U.S. Census Bureau, Chester County’s population grew from about 534,000 to 561,000 from 2020 to 2024 — a five percent increase.

The county budget has grown at least five times faster than the county’s population since Democrats took the majority on the county board of commissioners in 2020.

The county’s revenue from real estate taxes has grown from $169 million in 2020 to $212 million in the 2025 budget — a 25 percent increase. Not all of that is from tax increases. Some of that comes from new ratable: new residential or commercial developments whose taxes are incremental to the existing property tax base.

 

However, the Broad + Liberty analysis demonstrates that the incremental spending — and therefore growth in county government — does not stop at 25 percent. In addition to spending $43 million in additional real estate tax receipts, the 2025 budget uses $17 million in funding from the American Rescue Plan Act of 2021, or ARPA.

Furthermore, the 2025 budget spends $10 million from “appropriated fund balances.” In layman’s speak, this is cash already on hand in reserve funds. It is not regularly recurring revenue, like real estate taxes that are guaranteed to come in every year. Like any savings account, it is drawn down when money is needed to cover operating expenses.

Adding all these pieces together, in order to balance the 2025 budget, the county spent $43M in additional real estate tax revenue, generated primarily from a doubt digit tax increase, $17M in federal covid relief funds, and $10M in reserves, for a total increase in $70M.

By incorporating the ARPA and fund balances, the Broad + Liberty analysis concludes the county’s overall spending has gone from $169 million to $239 million — a 41 percent increase. To put in the plainest terms, since Democrats took a majority in Chester County, county government has grown 41 percent according to our analysis.

The county disputes this analysis, especially the idea that one-time funds are going to recurring expenses.

“Taxes were raised to cover ever-increasing expenditures as well as the large ticket items discussed. Revenues have not been growing at the same rate as expenditures over the last five years despite the County’s efforts to control costs,” Brookheimer said. “Those one-time funds were used primarily for one-time expenditures as explained in previous email responses. In other words, [the] vast majority of those expenditures will end as the one-time funds end.”

What’s indisputable is that many areas of recurring spending in the county budget have seen continual increases in the last five years. Personnel costs for the county have exploded since 2020.

 

The county noted that in 2023, it took over Community Transit, which added to the overall personnel costs. It should also be noted that Community Transit also came fully funded, so the county did not have to create additional revenue to pay for those employees.

However, an analysis of the county’s 2024 payroll obtained previously by a Right to Know Law request shows that Community Transit accounted for $3.9 million of payroll in 2024. Even when adjusting 2024 and 2025 payroll to exclude Community Transit, payroll is still up by roughly 21 percent when compared to 2022.

The county defended the increase in personnel spending.

“In 2022, many salaries were adjusted as a result of a salary study. The purpose of the salary study was to ensure that Chester County remains competitive with the surrounding counties so that we can maintain our workforce. Also, the cost of benefits increased by [fifteen percent] due to market demand – coming off COVID.”

The county gave two direct examples. “Correctional Officer – Base salary in 2021 – $41,939; Base salary in 2024 – $55,399. Regional Park Ranger – Base salary in 2021 – $39,472; Base salary in 2024 – $46,754,” Brookheimer said.

More changes in personnel spending may be in the offing.

“The County is currently performing a salary study with the plan to potentially implement in 2026. The County wants to continue to attract talented / qualified employees and remain somewhat competitive with surrounding counties and the private sector to continue the services expected to be provided by the County. At this time, the cost is not known since the study is not complete. However, it is not anticipated that the cost will be on the same level as the 2022 study since a study had not been done for twenty years prior to 2022,” Brookheimer said.

The Human Services category has also seen tremendous growth under the Democrats’ watch. The category’s 2020 budget was $234.3 million. By 2025, that figure had ballooned to $312.3 million — an increase of $78 million dollars, or 33 percent. (Some of that category growth could be from salary increases, and as such, could overlap with previous references to growth in personnel costs.)

SUMMARY

Like many other counties or municipal governments, Chester County also says inflation forced many of its budget increases. In an online “information sheet” the county pointed us to explaining the tax hike, the flyer led with the fact that the county was absorbing higher prices. Only after that did it tout the prison upgrades and radio refresh. The county sent similar mailers sent to citizens.

One significant element of the “big ticket” spending remains elusive: What will happen to that new revenue once the “big ticket” items are paid for? If the county raised taxes to pay $12 million in cash for new radios ($6 million in 2025, and $6 million in 2026), then what will the county do with that cash flow once the radios are paid off?

“At this point, we have not started fine tuning the 2026 and 2027 budgets to adequately determine our funding needs. However, with a County of our size, there are always projects surfacing that need immediate attention. One big ticket item paid for in the near future does not necessarily mean there are excess funds available in future years as other projects or needs surface. Inflation and rising costs continue to impact the County service and operational costs.”

If both “big ticket” items were paid for in up-front cash in the 2025 budget, they still wouldn’t add up to the total tax increase. The two “big ticket” items together totaled $18-19 million. The county’s tax increase is scheduled to bring in $26.8 million — a difference of about $8 million.

At a minimum, the county’s communications about the impact of the “big ticket” items — especially the first-year impact and how that would affect taxes and why that necessitated an immediate tax increase — seems to have been incomplete.

The county could have spread out the costs of the radios with debt that was scheduled to last the lifetime of the equipment — ten years — but did not choose even to shop those options. Additionally, state and federal grants are funding a sizable portion of the overall purchase, at least in the first year — a fact rarely, if ever, mentioned by Maxwell or other county officials.

Most of the costs of the prison upgrades are financed, which should lessen the need for an immediate infusion of new cash, but the county has rarely spoken about those projects as payments spread out over time.

The county’s overall growth, meanwhile, is undeniable. As explained above, Broad + Liberty’s assessment is that since 2020, county revenues have grown 41 percent. Although the county disputes our analysis, it concedes that the operating budget is up 29 percent over that same time — an incredible amount of growth that can’t be explained away by just inflation or incremental growth forced on the government by the Covid-19 crisis. A county budget that goes up 29 percent in five years would seem to directly contradict Maxwell’s assertion that the county wasn’t “expanding government tremendously or increasing annual spending in perpetuity.”

 

(For the sake of story length, Broad + Liberty obviously could not incorporate every response or answer to a question to which the county responded. In an effort to provide the county with as much voice as possible to its answers and comments, Broad + Liberty is publishing both sets of those email conversations available here: SET 1, SET 2. The questions are posed by Todd Shepherd; Chester County CFO Julie B. Bookheimer provided the answers. The 2019-2025 budgets are all available at this county website. Years prior to 2019 can be accessed here.)

Chester County commissioners are poised to raise residents’ real estate taxes by 13.47 percent at a Dec. 18 meeting.

While Republican minority Commissioner Eric Roe plans to vote against the $636.3 million operating budget for next year, Democratic Commissioners Chair Josh Maxwell and Commissioner Marian Moskowitz support it. The county also has a $93.6 million capital budget, bringing the total budget to $730 million.

Chief Financial Officer Julie Bookheimer presented the budget to commissioners on Nov. 20, calling it “fair and reasonable.”

Roe told DVJournal that Chester County residents, both renters and homeowners, cannot afford increased real estate taxes, which would result in increased rents. Citing an MIT study, he said, “Chester County is the most expensive county to live in in Pennsylvania.”

“And raising taxes makes it less affordable,” said Roe. While items in the budget are not wasteful spending, “it’s just that we can’t afford those good things.”

The problems for Chester County started when the Democrats took over in 2019, he said. They had a comparison study done that showed county employees should get paid more so they raised their salaries.

“It wasn’t paid for with recurring revenues,” said Roe. “It was paid for in large part by federal stimulus dollars that have now dried up.”

Guy Ciarrocchi, who ran for Congress as a Republican, called the budget “irresponsible, unnecessary and tone deaf.”

Facilities improvements at the prison are included in the capital improvement fund. Bookheimer mentioned the county’s costs for various items, such as paper products, have increased, similarly to household budgets.

Every 10 years, the county updates law enforcement handheld radios and the computers in emergency vehicles, she said. Those purchases are included in the budget, adding $10.5 million.

Employee benefits increased by $1.4 million, largely from prescriptions. She said personnel wages are also being increased to remain competitive with surrounding counties. Human services is the largest expenditure, and it is slated to increase by $9.5 million.

Some 44 percent of the budget is from state and federal grants, with real estate taxes next at 33 percent. The capital budget increased by $23.6 million, with $25.5 million scheduled to be borrowed for various projects, Bookheimer said.

Moskowitz said, “This is a tough year, I think.”

Maxwell agreed it was a “tough year.”

He noted $10 million of the increase was for the police radios, which are no longer being paid for through bond issues, while another considerable expense is $4.5 million for prison improvements, prison security, and air handlers to get fresh air inside.

He mentioned the “historic inflation” that’s “ravaged our country,” and proposed cutting back on county expenses by 8.3 percent to avoid increasing taxes. The county could also sell some unused properties, including office buildings it owns but are not being used.

Residents expressed their frustration.

“While I understand that Chester County has not raised real estate taxes since 2021, I think the 13.47 percent increase is irresponsible,” said West Chester resident Beth Ann Rosica. “Maybe the county should consider cutting costs rather than raising taxes by such a high percentage? For example, the county health department was incompetent during COVID, and I could argue they did more harm than good. Cuts in that department could be used to offset the overall budget. Ultimately, the county has to learn to live within its means, and if they cannot afford all expenses without a large tax increase, they need to cut costs.”

Felice Fein of West Goshen said, “Anyone who was paying attention knew this was coming. The county accepted ARPA (COVID) money, which was intended to be a temporary help to small businesses and others who were suffering due to closures and distancing requirements imposed by the governor. The Democrat-led county commissioners created new, permanent county department jobs (and funded other programs), but they didn’t have a permanent income stream to pay for those expenses.

If the millage increase is approved, the total increase will be $60.50 per year per $100,000 of assessed value. The medium assessed value of a house is $170,040.

If adopted, the tax hike of 0.605 mills, from 4.551 mills in 2024 to a proposed 5.156 mills in 2025. A mill is worth $1 for every $1,000 of a property’s assessed value.

“From the same gang that let [escaped prisoner] Danilo Cavalcante run free,” added Ciarrocchi. “Maybe we need a DOGE commission for Chesco—and then new commissioners.”

The commissioners will meet at 10 a.m. at 313 West Market Street, 6th floor, West Chester.

Just before voting for a 23 percent property tax hike, Democrat Delaware County Councilwoman Christine Reuther advocated for a pay raise.

“I am on a fixed income. My income has not gone up in the five years I’ve been on council,” she said at a recent Council meeting.

Public records show that council members earn approximately $51,000 per year for what is considered a part-time position.

Reuther’s council salary isn’t her sole source of income. Her official county biography said she operates a “small business consulting practice” that serves individuals, businesses, non-profits, and partnerships.

Her husband is a pediatric surgeon and a frequent presenter for American Medical Seminars.

Reuther argued that’s going to change next year because her husband plans to retire. “He’s going to be on a fixed income.”

Their six bedroom house featuring a “large master bedroom with a skylight” is valued at an estimated $784,000 to $913,670.

An apoplectic Wallace Nunn told DVJournal that Reuther’s comments went beyond the pale. “How dare you equate your privileged situation to someone living on Social Security or [who] is trying desperately to hang onto their row home while you live in your $900,000 [home].”

But Reuther insisted she’s still in a challenging financial spot.

“[T]he one thing I get is I get health care benefits as an employee of the county, and I’m now paying contributing towards those benefits, which my previous council members didn’t have to do because they wouldn’t vote to do that,” she said.

Former Delaware County Council Chair Andy Reilly found Reuther’s comments ridiculous.

“There hasn’t been a pay raise for 40 years. She knew what she was getting into,” he told DVJournal.

Reilly said previous Republican-led councils left governance to the executive director because the council was supposed to be part-time and term-limited.

“I guess this is a set up to try to raise Council salaries, which wouldn’t surprise me,” he commented.

Delaware County has a $27 million structural deficit. Although County Executive Director Barbara O’Malley attributed the deficit to inflation and a lack of tax increases, records indicate that county spending has increased by $75 million since 2020.

It highlights the role federal COVID relief money played into the expansion of government in Pennsylvania. The county’s 2021 budget was $246.5 million. The county passed a $321.4 million budget last week.

Similarly, the state of Pennsylvania’s budget grew from $39.8 billion in 2021 to $47.6 billion this year. The Pennsylvania Independent Fiscal Office warned last month the state’s general fund will be emptied next year and the Rainy Day Fund empty in Fiscal Year 2026-2027.

That caused the Commonwealth Foundation to warn tax hikes of several billion dollars were in the Keystone State’s future due to the reckless spending.

As for Reuther, she said no one should feel sorry for her. “I’m just saying I’m in the same position that a lot of the people are, that folks have been writing me about.”

Nunn agreed with Reuther on not feeling sorry for her. “These are the words of somebody that’s desperate because they don’t even begin to reflex reality. … You have no shame,” he said.

The cost of living in Delaware County is out of control and one of the main contributors is local governments raising taxes, from school boards to Delaware County Council itself. Just this past Wednesday, Delaware County Council proposed a 23.8 percent property tax increase that would be used to pay for increased spending and grow the county’s financial deficit from $54 million to $76 million. Hundreds of residents attended the meeting, including myself, calling on the council not to raise taxes by such a high amount.

The county council says there hasn’t been a tax increase in 12 years, and they blame the previously all-Republican council’s not raising revenue for why there is a dramatic increase in taxes now. However, there is more to this story. The current Delaware County Council is spending far more than previous councils spent.  The addition of a Health Department, the de-privatization of George H. Hill Correctional Facility, the purchasing of additional land, and increasing county staff salaries have all contributed to increased spending in the county.

The county’s taxes didn’t go up immediately when this increase in spending began, however. This is because the county council received $110,083,961 in ARPA (American Rescue Plan Act) funds in 2022 and has plugged the holes of its growing deficit with these funds to hold off tax increases, until last year when it raised taxes by 5 percent. They are proposing to use the dwindling ARPA funds in the 2025 budget to pay for the health department again this year and are using additional rainy-day funds to fill gaps in the overall budget. Also, when the council obtains grants to purchase or enact various items or programs, it is using one-time or limited funding sources that eventually run out. This means that without the ARPA or grant funding, this proposed tax increase could be even higher than 23.8 percent.

When addressing the county council in last Wednesday’s meeting, I gave the council plenty of examples of ways they could, in fact, cut some of their spending to encourage them to lower their tax increase. Some of these examples included ending “free yoga” (nothing is free to taxpayers), shrinking their electric vehicle fleet, not spending $4.1 million in outside legal fees, and putting off some of their capital project spending, which is $120,926,840, up from $74,852,754, an increase of 61.6 percent.

Also, the Delaware County Council has undertaken a plan to buy up land for open space use and increase the number of trails it has across the county. I am an advocate for open space and green space in our communities. However, the annexation of land has put an increased burden on taxpayers and the county’s budget. In the past few years, the county has used eminent domain or settled litigation to acquire land in Media Borough for Glen Providence Park, in Marple Township for ‘Delco Woods,’ and more. This has amounted to millions more in taxpayer dollars being spent and requiring more for taxpayers to have to pay in the long run for the projects the council wants to do with these properties.

Whether you are a renter, business owner, or homeowner in Delaware County, we all should be concerned with the increased spending in Delaware County. Regardless of the justification, the council is irresponsibly creating a deeper deficit and has run out of options other than massive tax hikes to maintain their spending increases. This upcoming Wednesday, Dec. 11, the county council will convene to vote on this proposed budget.

Instead, Delaware County Council needs to make cuts in its budget to reduce the blow of this tax increase and prevent further increases in the future for struggling county residents.

 

 

(This article first appeared in Broad + Liberty)

Delaware County’s executive director on Tuesday unveiled a new proposed 2025 budget to the county council that includes a 23 percent tax increase, and will leave the county with an alarmingly small “rainy day fund.”

If passed, the tax impact on the average homeowner in the county, with a home assessed at approximately $250,000, would be $15.39 a month, or $184.69 a year. The impact would not just be limited to those who own single-family homes. HOA dues and rents for any kind of housing could very well see increases as landlords and property managers would have new costs that would need to be recouped.

 

This time last year, the council proposed and later passed a five percent tax increase.

 

At least four of the five council members (all five being Democrats) signaled their likely support for the overall budget, including the tax increase: Chairwoman Dr. Monica Taylor, Kevin Madden, Elaine Paul Schaefer, and Christine A. Reuther.

Only Vice Chairman Richard Womack expressed reluctance, saying the county needed to form a “budget commission composed of a diverse group of community leaders, faith leaders, union leaders, business leaders and academics,” to study the budget and find proposed savings that might lower any tax increase.”

“I feel that working together, Delaware County can emerge from this crisis even stronger with a financial plan that benefits all residents for years to come,” Womack said. “So I say to you, and I ask council to hold off on increasing taxes, put the commission in place. Let’s see what we can do to help bring in resources where we can make different cuts and strategic cuts. And that’s what I would love to do.”

Although he has not officially announced, Womack is presumably running for re-election next year. Councilmember Kevin Madden will be term-limited out of office, so his seat will be open.

Executive Director Barbara O’Malley gave a 40-minute-plus presentation to the county council, and largely blamed the county’s structural deficit at the hands of inflation, as well as years in which the county experienced no tax increases at all.

O’Malley provided a visual showing inflation increasing 23.5 percent over a ten-year period.

“I’m certain all of our residents and ourselves have felt this acutely and personally we’ve seen that food costs increase at Fair Acres. For example: 38 percent in the last five years, 17 percent just last year. And at George W. Hill they’ve seen an eighteen percent increase in food costs in the last two years. Again, these facilities serve nearly over — combined — over 1,700 people and we have to take care of those individuals. So healthcare costs, food costs, energy costs, they impact the county just as they impact any other resident. Inflation impacts all of us and with inflation we have to adjust our costs and costs will increase.”

In 2022, Broad + Liberty interviewed chairwoman Dr. Monica Taylor. When asked about inflation, Taylor said the council would be taking a wait-and-see approach.

“I think that’s something that we’ll probably have to assess, like, after the first quarter [of 2022]. We found that last year — you know, there’s inflation, if you think about gas costs, but then there’s also been the impact of Covid, where we’re not using as much gas, cause maybe we’re not all going out as much as we had been going out before,” Taylor said. “And so seeing how that balances out after the first quarter, I think, will be important to assess.”

Several council members and O’Malley said inflation was driving salary costs higher.

The county has been raising salaries for some time, and has frequently been chided by the county controller, JoAnne Phillips.

In March, just as Councilwoman Reuther was warning of a “sizable” tax increase, Phillips was sounding the alarm over personnel costs.

“I just wanted to make it clear that the costs that you’re considering today are just the salaries, not any other benefits, and the cost of our benefits that go into our budget,” Phillips said at the time, (video, minute 1:10).

“Two, I wanted to make note that there’s an impact on our pension ultimately, which hasn’t really been determined as we accelerate our salaries. If that’s the case, our salaries have really gone up in the last couple years. We’ve gone from about $167 million after Covid after the prison came online to looking at really, almost $188 million about two years later. So we are incrementally raising this a great deal,” she concluded.

Meanwhile, the fiscal crisis reinvigorated a years-long debate over the county council’s decision to reverse the planned sale of a public utility.

Officials from Aqua Pennsylvania, a private water and sewer company, said county officials should take the opportunity to sell the Delaware County Regional Water Quality Control Authority (DELCORA) to Acqua.

Acqua and Delcora agreed to a sale in which Aqua was supposed to purchase DELCORA for $276.5 million, but that sale has been tied up in legal battles since.

“This is an opportunity for us to get this transaction closed,” said Chris Franklin, chairman and CEO of Aqua. “The county would yield, I would say, at least $125 million because a lot more has been spent at DELCORA since 2019 when we signed the agreement of which — of course we would pay for — so that purchase price would go up. I know this is one-time money, if you think about it that way, but I think we should exhaust all forms of one-time money before we put a permanent long-term, forever tax increase on all the residents in the county.”

A resident of Radnor Township who spoke during public comment was highly critical of the proposed tax increase, and said the budget showed several categories of consistent growth that, he seemed to suggest, could have been reined in.

“A lot of the numbers that we’ve seen, maybe they’re decreasing, maybe they’re increasing a little. I want to provide somewhat of a longer framework for this. Since 2021, the expense for motor vehicles is up eight times. 30 percent [increase] for planning, seven times for park police and constable transport — seven times! 50 percent for public relations, four times for personnel in five years! Two times for the solicitor, about one and three quarters times for central purchasing, two times for general administration.” (Note: Readers should be advised that Broad + Liberty has not verified those calculations.)

Another county resident, Leah Kaufmann, suggested that the county would be foisting a second wave of inflation on residents with the tax increase.

“We the taxpayers are already hurting from inflation. The companies we work for are not paying us an appropriate [pay] increase per inflation,” Kaufmann said. “Some big companies can and won’t due to corporate greed, while other small businesses cannot without passing the increase onto our customers — thus creating a vicious cycle of price increases we the residents shouldn’t have to pay for our county mismanaging the budget. Respectfully, find the money elsewhere.”

The council also spent time discussing the use of the dwindling “fund balance,” which can essentially be thought of as the rainy day fund, or reserve fund.

In 2023, the county spent $37.8 million from the fund balance, and then another $10.7 million in 2024. For the upcoming year, the budget would draw another $12.9 from the fund balance.

O’Malley said this will leave the county with only $16 million left in that reserve. Compared to the overall county budget, the reserve fund would represent only five percent of the county’s annual operating budget.

That ratio is incredibly small when compared to neighboring counties. According to O’Malley, Bucks County keeps a reserve that is about thirteen percent of its annual spending, Chester County twelve percent. Montgomery County is most flush with a reserve that stands at 21 percent of its overall annual budget.

(Source: Slide from O’Malley budget presentation to county council on Tuesday)

“And you can see by comparison some of the levels in our peer counties, we really do want to achieve and get [the fund balance] to ten percent [of the overall budget]. And while I say ‘want,’ it really is a need. It’s appropriate and responsible to have a fund balance that could support any challenges or unexpected things that may happen.”

On the brighter side of the budget, O’Malley said the county nursing home, Fair Acres, should be budget neutral sometime in 2025.

“This means they will be self-sustaining. That is tremendous from where they were just a few years ago where they were relying on several million dollars from the general fund to operate,” O’Malley told the council. The majority of funding for Fair Acres comes from Medicare and Medicaid, she said.

She also seemed optimistic that some new technological purchases combined with new softwares could create long-term cost savings in the county’s purchasing process.

The proposed 23 percent tax increase is lower than a 28 percent increase previously reported by Broad + Liberty. To accommodate the difference, the county added more revenue from “transfers” and from one-time federal monies from the American Rescue Plan, passed in the pandemic.

County Democrats won two seats on the council starting in 2017, with Madden and Brian Zidek, who has since retired from the council. But in 2019, they added Taylor, Reuther, and Schaefer, giving their party full control of the county government for the first time since the Civil War.

Enabling those wins were ambitious promises to create a county health department and to deprivatize the county’s prison, which had been privately managed for not quite three decades.

On Tuesday, they spent significant energy defending those promises, which have since become real.

Both Reuther and Schaffer said the absence of a county-wide health department during the pandemic was an embarrassment.

Reuther said she would make the same decision to deprivatize the George W. Hill Correctional Facility, even though the county has struggled to contain its budget.

“While it’s proven to be expensive in a time of rising salaries, it was never about ‘We’re going to save money by privatizing the prison,’” she said.

Yet the deprivatization was marketed, at least in part, as a cost-saver to the county. As the county considered deprivatization, a consultant told the county’s Jail Oversight Board that the county could save money if it lowered the prison population. Even though the county has lowered the daily average population, the costs have soared well beyond what the county expected.

In 2022, the first year the county managed the prison, the total outlay was $47.3 million. That number stretched to $53.3 then $56.6 million in 2023 and 2024 respectively. According to the latest proposed budget, the prison will cost taxpayers $59.3 million next year.

Legal costs have also been on a steep rise. As Broad + Liberty has reported, the county’s spending on outside, third-party legal help has risen past $4.5 million. In the last year of Republican control, that figure was 10-times less, at about $400,000.

O’Malley said two major, costly cases were behind the county: that of the Crozer health system collapse, and the county’s acquisition of the “Delco Woods,” or, the property formerly known as Don Guanella.

Legal issues still await the council in regards to the prison. The county is facing a number of personnel and union-related lawsuits. Additionally, it faces significant legal challenges from two suicides that happened early in the government takeover, as well as a lawsuit related to the alleged murder of one inmate by another.

Although most of the council members didn’t say the word “Republicans” they frequently blamed years of no revenue increases — essentially a shot at previous Republican-majority councils.

“We have had a decade, more than a decade of disinvestment, in what government does to provide services and this board is in the position where we have to raise the revenue to invest and bring government to the level it needs to be to serve our public,” Schaeffer said.

Yet when the Democrats won complete control of the county, the winners said Republican one-party rule had led to higher taxes.

“The Democrats campaigned on a platform of transparency and change, vowing to bring an end to 150 years of one-party rule in the county, which they said led to mismanagement, sweetheart deals, higher taxes and fewer services than their suburban counterparts,” a report from WHYY noted in 2019.

Republicans said the blame was misplaced, and seemed eager for the next election cycle to get going.

“I must be living in the twilight zone. We’ve had an all Democrat council for four years. They are raising taxes 24 percent, and still pointing fingers at previous Republican administrations going back more than a decade while adding millions of dollars in dubious expenses,” Delaware County Republican Chairman Frank Agovino said. “I’m not sure if it is arrogance or incompetence, but what is clear is that this council no longer represents the working class in Delaware County. They are shining examples of the failures of the kind of one-party rule these people once railed against. Next year is now the most important local election in memory.”

Video of the meeting is available here.

The 2025 budget is on the agenda for a meeting on Wednesday, 6 p.m. to hear more public comment. The council will vote on the budget on Wednesday, Dec. 11.

Update: The original version of this article incorrectly stated that the county used $27.3 million from the fund balance, when the actual number was $37.8 million. The article has been updated to reflect this information.