Montco proposes 11 percent property-tax hike

Real estate taxes would increase 11 percent for Montgomery County property owners in 2017 under a proposed budget unveiled Thursday, the result of a new tax category created to fund Montgomery County Community College.

The increase, which would apply only to the county -- not the school or town -- share of the tax bill,  would add about $66 to the annual bill for the owner of a $300,000 home, the county average. However, the county's tax rate would remain the lowest among Philadelphia's neighboring counties on both sides of the Delaware River.

Also Thursday, Valerie Arkoosh became the first woman chair of the county Board of Commissioners, succeeding state Attorney General-elect Josh Shapiro, who stepped down, although he will remain on the board until January. His successor will be appointed by county judges, and Arkoosh is likely to remain as chair.

At Thursday's meeting, Arkoosh said the county had not been paying its fair share in recent years to the college, which is set up to receive equal funding from tuition, the county, and the state.

By moving funding for the college out of its general fund into a different tax category - taxed at 39 cents per $1,000 in assessed value, or about $1,780 in market value under the state formula - the county technically would keep its tax rate the same as in this year's budget. But overall spending would increase from $391 million to $409 million.

"We've had some new expenses that aren't trivial," said Arkoosh.

Additional expenses include raising noncontract employee salaries 2.75 percent, adding $6 million to the surplus fund, absorbing an increase in health-care costs, and putting $1 million into the fund for the 911 system, said Dean Dortone, the county's chief financial officer.

The proposed dedicated tax for the college would amount to about $22 million in 2017, a $3.7 million increase from the $18 million that the county paid the college this year. County officials said that the college sought $24.5 million from the county this year to match state funding, and that the college was considering a tuition freeze.

Joseph C. Gale, the sole Republican commissioner, criticized the budget as adding "essentially a new tax" to fund the college.

"And the money that we typically use to fund the college will be spent in an increase of spending by a significant amount," he said. "And that practice, in my opinion, is not sustainable."

The county is to hold hearings on the budget on Dec. 1 and vote on adopting it Dec. 15.

Dortone said the county has a projected $1.3 million deficit for 2016, due to an unexpected loss of revenue, including the state's ending an agreement to house state inmates in the county jail. The projected deficit could decrease by the end of the year, he said.

With the proposed increase, the millage - rate per $1,000 of assessment - would increase from 3.459 to 3.84. Both Bucks and Delaware Counties have said they will keep tax rates the same; Chester County has proposed a 5 percent hike. All three counties have rates higher than Montgomery's.

Although Shapiro stepped down Thursday as chairman, he said he plans to remain on the board until shortly before taking his oath of office in January. "I have work to complete," he said.

The commissioners unanimously elected Arkoosh to serve as chairwoman and Shapiro to serve as vice chairman.

Arkoosh said she and Joe Foster, chairman of the Montgomery County Democratic Committee, will submit a recommendation to the judges to replace Shapiro.

lmccrystal@phillynews.com610-313-8116@Lmccrystal