Reading City Auditor Maria Rodriguez is urging City Council to scale back on the administration’s proposed 9% property tax increase for 2026.
Her recommendation that the burden on property owners be eased by using existing revenues and adjusting internal transfers drew backlash from city administrators.
An elected official, Rodriguez provides a non-binding annual analysis of the mayor’s proposed budget.
She told council Monday that the city could reduce the tax increase to 6% without jeopardizing operations.
The adjustment, she said, could be achieved by using at least $300,000 in interest earnings from the city’s 2024 bond issue for the general fund and by reducing the general fund’s transfer to capital by $350,000.
Rodriguez said city property owners are particularly in need of relief because they were already hit with a Berks County property tax increase for the current year.
“I know the city and the county are totally two separate government entities,” she said, “but the county increased the property tax by 8%, and if the city increases the tax by 9%, it’s going to be 70% of the residents of the city of Reading who are going to be paying (both).”
The administration pushed back immediately.
Finance Director Jamar Kelly told council that some of the auditor’s assumptions were incorrect, especially her belief that interest from the 2024 bond could be directed to the general fund.
Those earnings, he said, must remain within the fund tied to the city’s energy-efficiency facilities project because the American Rescue Plan Act, or ARPA, allocation originally planned for it fell short of the project’s needs.
Further, a reduced tax increase, he and Managing Director Jack Gombach said, would not adequately address the structural deficit, likely making future budgets harder.
“I would not present this recommendation as tax relief,” he said. “I would view this as you are kicking the can down the road.”
Cost drivers will persist, Gombach noted, so lowering an increase for 2026 would only compound the gap later.
The administration, he said, recommends council adopt the larger increase, which could be coupled with revenue and savings measures aimed at shrinking the deficit over the next few years.
Rodriguez defended her position, saying her office validated the numbers for weeks and based the recommendations on available revenue and documented spending trends.
Her other major recommendation involved overtime accounting.
Rodriguez advised the city to create a dedicated budget line for police compensatory time, which is currently folded into the department’s overtime.
According to her review, the city paid out $1.3 million in comp time last year. But because it is not listed separately, it obscures true overtime spending.
Separating it, she said, would give council and the public a clearer picture of personnel costs and prevent under-budgeting for unavoidable payouts.
The administration did not directly oppose that recommendation, but Kelly said the city’s overtime challenges stem largely from staffing shortages and overtime-eligible work that cannot be eliminated.
Council members heard both perspectives but did not indicate whether they were inclined to adopt the auditor’s recommendations.
Council will continue reviewing the budget before adopting a final spending plan later this year.