County taxes will remain lowest in the vicinity, despite planned 10% rise

Lancaster County Commissioners expect to vote December 24 on a proposed 2026 county budget encompassing just under $340 million in operating expenditures.

Next Tuesday, the three-member board will hold a public discussion of the spending plan, which would raise county property taxes for the first time in thirteen years. The real estate levy, the only revenue stream other than grants, fees, and fines available to the jurisdiction, will go up 10 percent from 2.911 mills to 3.201. 

The millage rate amounts to $1 in taxes for every $1,000 of assessed property value. A homeowner with a house assessed at a $300,000 value, for instance, would pay $87 more in taxes yearly as a result of the likely policy change. Lancaster County’s property tax bite is a small portion of the total real estate tax take that includes municipal and school rates, altogether ranging between sixteen and 40 mills among the county’s municipalities.

If the proposed hike gets enacted, Lancaster County’s millage will remain lower than that of all neighboring Pennsylvania counties, surpassed by rates in Chester (5.164 mills), Berks (9.013 mills), Lebanon (4.3925 mills), Dauphin (8.376), and York (6.9 mills). (Lebanon, Dauphin, and York counties’ taxes are expected to rise to varying extents next year.)

Lancaster County’s budget process took two weeks longer than usual this year, largely owing to a County Commissioners Association of Pennsylvania meeting coming right before the Thanksgiving holiday.

“The board and budget team felt it was imperative that staff take extra time for additional scrutiny, especially when you’re looking at a tax increase,” Commission Vice Chairman Ray D’Agostino said. “All three commissioners were in agreement on taking additional time. It should be noted that the additional time is not only provided to the county team, but for the public to become familiar with the budget process and issues surrounding the budget.”

The preliminary spending plan, which D’Agostino, Commissioners Chairman Josh Parsons (R), and Commissioner Alice Yoder (D) voted a week ago to consider, also anticipates an $8.9 million drawdown on the county’s cash reserves. (The county’s available fund balance at year’s end is projected to be nearly $82 million.) At last week’s meeting commissioners thanked county staff for working with them to minimize that drawdown through a painstaking review of county spending on personnel, technology, and other items. The county budget adopted a year ago projected a $5.4 million deficit; by the end of this month it is expected to be under $1 million.

“We are not alone,” D’Agostino said before last week’s vote, noting he wants the county to continue its cost-cutting mindset next year. “Counties across the commonwealth and municipalities across Lancaster County are in the same position, having to make tough decisions over the past few years and going forward. The good news is that the work over the past year has yielded greater efficiency and reduced costs.” 

He said that some tax increase was inevitable given that over half of county spending is legally mandatory and that a series of annual bumps, rather than a 10% hike this year, wouldn’t have left taxpayers better off. He reasoned that attempting to hold the line on the property tax for over a decade forced commissioners to adhere to a fiscally conservative mindset. Increases in some fees, which have also held steady over the last several years, are also planned. 

“Such a liberal ‘tax and spend’ philosophy, does not keep the pressure on us to do better in alignment of priorities, greater efficiency, and finding cost-cutting and/or saving measures,” he explained. 

According to D’Agostino, the county has also succeeded in increasing its capture of grant money, particularly in the areas of farmland preservation, probation, and parole. 

Parsons concurred with the vice chair that the county couldn’t have simply avoided a tax increase at all, recalling he himself warned in testimony to the U.S. Senate about the cost snowballing that has occurred due to inflation. Since the county’s last tax rise in 2013, inflation has reduced the practical value of $1 to $0.60. 

“Just as this massive reduction in the value of each dollar is a hardship for individual working citizens in Lancaster County, it is also a hardship to county government,” he said. “The reduction in value of each dollar we bring in we bring in makes it more difficult each year to balance budgets at the 2013 revenue number.”

Other concerns that have complicated the county’s objective to keep taxes low include the recent 4.5-month-long commonwealth budget impasse and the need to replace the aging county prison as well as health care and energy cost increases. 

The commissioners are mulling reforms they believe could improve fiscal decision-making in the future. Most counties take their tax rules from the state code, something they can only contradict by joining the handful of counties that have adopted home rule charters, a difficult option that few local officials contemplate. Absent that, state policy must change if Lancaster County can ever shift some of the tax burden from homeowners to other revenue sources such as sales taxes. In their recent remarks, the commissioners called on state lawmakers to give them that flexibility. 

“This should really be an easy thing for the legislature and governor to do,” Parsons said. “All they have to do is pass a bill giving counties the option, but not the requirement, to shift to other revenue sources… and reduce property taxes dollar for dollar for any revenue brought in. This would allow the people of Lancaster County to decide what is the best way to fund public safety and other services county government provides.”

D’Agostino suggested the county consider consolidating the budget services and related offices into a single County Finance Department, something he said would build on efforts of the late Controller Lisa Colón (R) to spur greater efficiency in budgeting and financial monitoring.

“This department, along with our new financial advisor and [incoming] Controller [Scott Wiglesworth (R)], will provide the County with the best opportunity to chart a sustainable path forward, including tackling the large County Correctional Facility project and ensuing financing,” the vice chair said. 

Yoder told The Independence she is still weighing what the final budget could look like and, depending on that result, whether she will vote in favor of it. She said she wants to see the county undertake more intensive budget planning with meetings that include all department heads, hire full-time grant writers to pursue external funding opportunities, and craft fiscal policy over the long term rather than year-to-year.

“Before we would vote, we still have time to make some changes,” she said. “I’m still waiting for some definitive answers to the issues I raised.” 

She voiced major concern with a decision made last month by the U.S. Department of Housing and Urban Development to reduce the Continuum of Care (CoC) program intended to benefit the homeless. She suggested the county allot $1.5 million in new funds for permanent supportive housing. Her worry grew upon news just days ago that the federal government paused any such funding. The federal government has rescinded the potential CoC cut.

The federal policy change is rooted in President Donald Trump’s move to shift the anti-homelessness paradigm from “housing first” to “treatment first.” The latter approach, which Yoder said she prefers because it’s “evidence-based,” attempts to secure a permanent living space for a homeless person before treating drug addiction and other problems that such individuals often face.

Advocates for “housing first,” like the National Alliance to End Homelessness, argue that it provides persistently homeless people with the basic stability they need to then receive effective drug or psychiatric treatment. 

“I’ve always been focused on ‘an ounce of prevention’s worth a pound of cure,’” Yoder said. “And without someone having that stability, then it just really shifts the responsibility and the cost to some of the higher-cost services. Either way, we’re going to wind up paying in some way.” 

Supporters of the shift to “treatment first” like the Texas-based Cicero Institute counter that the lack of conditions one must meet to get housing left too many people in such a mental state that they declined offers of housing and other services. HUD statistics indicate more than more than 60% of those without stable housing and with drug addictions live on the street, up from 40% a decade ago.

D’Agostino said he believes the pause in federal funds will need to be thoroughly studied before the county determines the appropriate response.

“Given the lateness with our budget development, the fact that the [County Housing and Redevelopment Authority] has not weighed in yet on potential impact and that no decisions on funding by the federal government would be made until possibly the end of the first half the year, it would be premature to allocate funds,” he said. “Also, such funds would need to come from our reserves, which can be tapped at any point in the year to deal with such issues.”

Next Tuesday’s public meeting on the budget will be held at 6:00 p.m in Room 102/104 of the Lancaster County Government Center, 150 N. Queen Street, Lancaster.

Editor’s note: This article was updated to reflect the county’s deficit projections and current federal Continuum of Care policy.

Bradley Vasoli is the senior editor of The Independence.