SUNBURY - The City of Shamokin has been granted its sixth consecutive exemption by a Northumberland County judge to allow its real estate millage to exceed the maximum allowed by state law.
Real estate taxes will be assessed at 30 mills in 2014, 5 mills above the 25-mill limit.
The 5 mills are expected to net the city $120,000 in tax revenue.
Without it, city government couldn't make ends meet and services to residents would be adversely affected, Councilman William Milbrand and Treasurer Brenda Scandle testified during Thursday's 20-minute hearing before Judge Charles H. Saylor.
Noting the city's difficult financial situation, Saylor also recognized that council continues to work with the Department of Community and Economic Development (DCED) in its Early Intervention Program, now in Phase 3, and that it also took the emergency loan to pay debts and end the practice of rolling over unpaid bills from one year to the next.
"It is certainly prudent to maintain these level of services by having a budget that includes the 5 mills for another year, so I will approve it," Saylor said.
The city first sought court approval in 2008 to increase real estate taxes from 25 mills to 30 mills. It was suggested by DCED as part of the city's enrollment in Early Intervention. The city has petitioned the court to maintain the tax millage every year since.
"There has not been any improvement over those five years, that is clear," Saylor said.
Saylor reviewed the preliminary budget and the latest working version during the hearing. He presided over a two-day hearing last week in which the city was granted the court's permission to pursue an emergency loan of $800,000 to pay the city's unpaid bills.
"I had the benefit of hearing testimony several times last week, so I'm familiar with the situation," Saylor said.
The additional tax revenue had already been factored into Shamokin's 2014 preliminary general fund budget, adopted last month, which included a $616,081.58 deficit. The deficit has since been reduced over the course of four special budget meetings to an estimated $297,811.20.
But council appears out of options to increase revenue or reduce spending without implementing furloughs.
"It's the only place we can trim," Milbrand told the court.
"What would be the effect of cutting an additional $120,000 from the budget in revenues that had to be offset by expenditure cuts?" city solicitor H. Robert Mattis asked Milbrand. "To me, a possibility of bankruptcy," Milbrand said.
Personnel cuts were expected to be discussed during another budget meeting Thursday night. However, furloughs were not expected to be revealed publicly before the affected employees are notified.
"I think that tonight will be the last meeting and I think the budget will be balanced tonight," Scandle told the court.
A vote by city council on a final budget and its tax levy is expected during a special meeting at 6 p.m. Monday at City Hall, 47 E. Lincoln St.