Berks County may have to consider a tax increase as part of its 2027 budget.
Financial officer Laura Jones delivered a review of the upcoming budget Thursday at a commissioners meeting that included a stark warning that persistent inflation and high energy costs are creating severe economic pressure.
“These economic pressures are important as we build the 2027 budget because they continue to influence the cost of nearly every service we provide and every item that we purchase,” she said.
In addition to those external factors, Jones said the county is facing higher costs to recruit and retain personnel as well as rising pension obligations and increasing health insurance costs.
Another significant pressure on the budget, she said, is continued investments the county is making to renovate its facilities, upgrade technology and expand its footprint. That includes the plan to purchase 600 Penn St. in Reading for $7.2 million to temporarily house government offices while improvements are made to the courthouse.
“While these investments are important and necessary, they also create ongoing financial obligations that must be incorporated into our budget planning,” she said.
Jones said these pressures combined with revenues that are failing to keep up with rising operating costs are creating a structural deficit that would cause general fund reserves to fall to a concerningly low level in 2028.
“The challenge before us is balancing these financial realities while continuing to maintain the needs of our residents, invest in our infrastructure and maintain the fiscal stability of our county for years to come,” she said.
Under the current forecast, Jones said to comply with its longstanding policy to keep enough money in reserves to cover three months of operation the county will have to increase its tax revenues by about 3.5% or significantly cut spending on services that are not mandated under state and federal law.
Commissioner Christian Leinbach thanked Jones for bringing attention to the bleak financial outlook to better educate residents about the tough decisions that will have to be made as the county finalizes its spending plan.
“We felt it was necessary to bring this information to the public so that we can be transparent about what the pressures are,” he said.
Leinbach said the county finds itself in a tough spot because raising property taxes is one of the very few ways it can increase the revenue needed to provide services to the community.
Commissioner Michael Rivera reiterated that point by noting that 87 cents of every dollar spent by the county is generated by property taxes.
The proposed 2027 budget will officially be unveiled at the Nov. 19 commissioners meeting.