Mayor Joe Schember is presenting the city of Erie’s preliminary budget for 2019. And, as the city of Erie tries to overcome a budget deficit, city residents and business owners could find themselves paying more next year.
This draft budget is confronting a problem the city says it must address; a deficit of about $11 million. That figure slightly up from the originally reported $9 million after factoring in projected costs for employees.
The mayor tells us, “It’s a little higher, because what we’ve included in that now are salary increases for the different union members that are all planned in there and we have no choice about that.”
In Schember’s 2019 preliminary budget, he proposes increasing the income tax on city residents. That tax rate would go from 1.18% to 1.75%. Also, businesses within city limits would be required to obtain a new annual $100 license fee in order to operate. The city estimates some 2,000 businesses could be subject to the annual fee, bringing in $200,000.
Business Owner Larry Franco says, “You’re going to chase businesses out. You’re going to chase people out more. When does it stop?”
But, Business Owner Sean Fedorko feels differently. “Everybody complains when they’ve got to pay, but everybody wants things to get better. By paying for things to be better like better police, better roads, better services here in the city, it only becomes a better place for me to do business. I’m happy to do my part.”
Schember says these changes, along with several other fees or tax increases, will help conquer the deficit, such as an Amusement Tax Increase from 3-5% and an increase to sewer and refuse costs.
“The last thing you want to do is raise taxes or fees and that sort of thing. Of course, we’re doing all of that. We want to be open, honest and transparent with this. We want people to know what we’re doing, why we’re doing it; and we think by doing this, we can avoid the kind of thing that happened this year. All of a sudden we’re trying to figure out, ‘Where do we get 11 million dollars?”
He points out that, even with the proposed Income Tax increase, it’d still be lower than several other cities of similar size.
Schember plans to have a final budget ready to present to Erie City Council at their next regular meeting in two weeks.