Murrysville likely to need new revenue sources by 2022 to maintain current service levels - TribLIVE

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About a year ago, Murrysville Chief Administrator Jim Morrison said that while he did not see the need for a tax increase in the next five years, “creating a balanced budget without one is posing a bigger challenge each year.”

The municipality has gone 13 years without a hike in property taxes, having last raised its millage in 2006. But a fiscal analysis conducted by Finance Director Diane Heming revealed that new sources of revenue may be necessary when staff begins assembling the 2022 budget.

“We were trending toward needing to identify additional revenue sources in 2021 and ’22,” Morrison said. “The impact the pandemic has had, and our need to transfer out of the capital reserves to support the general fund operation has moved that forward.”

Morrison and Heming looked at a number of economic indicators, assigning a positive, neutral or negative trend to each. Among them:

• Income distribution is trending in a positive direction. From 2010-2019, median income has risen by nearly $10,000, from $87,745 to $97,221 among Murrysville’s 8,119 households.

During that same time span, residents earning more than $200,000 has risen nearly 40%, from 811 in 2010 to 1,133 in 2019, according to municipal figures.

• Debt service is trending positive, with the municipality’s debt staying around 2.5% of the annual budget since 2015.

“I think for a community of our size to carry a debt load of less than 5% is significant,” Morrison said. “It shows we pay as we go here. We use current year revenues against current year expenditures, and if we borrow it’s for major capital improvements.”

Beginning in 2020, however, all of the municipality’s fund balances — general, debt and capital reserve — are projected to shrink slightly in each of the next four years, and the full economic impact of the covid-19 pandemic is unknown.

The pandemic is likely to hit local government’s share of the liquid fuel tax particularly hard.

“Some are projecting as much as a 40% hit,” Morrison said. “We take in about a million dollars a year, so if we lose 40% of that, that’s half our road program.”

• New residential housing is also trending in a negative direction. “We’re averaging 25-30 new housing starts per year,” Morrison said. “That’s way down compared to the ’80s, when we were building 100-150 new houses each year.”

Morrison and council members started a preliminary discussion at their July 1 meeting about ways to promote growth and additional development, including updating Murrysville’s zoning map.

The municipality is also feeling the cumulative impact of residential tax appeals.

“The policy of the community has always been not to contest those, and focus on commercial appeals as the school district does,” Morrison said. “But there isn’t a week that goes by when there isn’t a stack of appeal notices we receive. Over time, it may be a couple hundred dollars here and there, but the number we’re receiving has had a significant impact on the value of a mill in this community.”

If council’s intention is to provide “the same level of services we currently do, we’ll probably need new revenue sources for the 2022 budget,” Morrison said.

Patrick Varine is a Tribune-Review staff writer. You can contact Patrick at 724-850-2862, pvarine@triblive.com or via Twitter .

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