READING \u2014 City of Reading landowners may see a 6% increase on their property tax bill next year, but the extra revenue may not be enough to keep the city from dipping into its reserve funds to cover 2026 costs.<\/p>\n
Reading Finance Director Jamar Kelly outlined the proposed $284 million budget<\/a> to the City Council on Oct. 6. Officials called the tax increase a difficult decision that they had successfully avoided for four years, before exiting the state\u2019s financial distress program (known as Act 47<\/a>).<\/p>\n Property taxes are one of municipalities\u2019 primary tools to raise revenue to cover essential services, such as police, fire, and public works. Kelly estimated the additional tax revenue to bring in about $2 million.<\/p>\n However, the current budget also projects pulling approximately $12 million from the city\u2019s reserve balance, which essentially acts as a locality\u2019s savings account. The city becomes more likely to reenter financial distress as the amount withdrawn from reserves grows without either replacing it or enacting spending cuts.<\/p>\n Ideally, cities want to keep projected reserve spending at or below $5 million annually, Kelly told Spotlight PA. The 2025 budget projected to use around $9.8 million.<\/p>\n Kelly said the city has managed to avoid pulling funds the past few years by keeping the city\u2019s cash flow liquid, but any projections over $9 million make him \u201cget queasy.\u201d<\/p>\n Each property tax bill is calculated<\/a> by the value of the home itself. If City Council approves in December, the rate will increase to 19.261 mills, or approximately $19.26 per $1,000 of assessed value. A resident whose home is valued at $100,000 would pay around $1,926 in City of Reading property taxes. This is in addition to county, school, earned income, and federal taxes \u2014 but excludes homestead or other waivers.<\/p>\n \u201cNobody ever wants to have their tax bill increased,\u201d Kelly said. \u201cHowever, we have an expectation of government services to be provided. You expect that street light to turn on at night. You expect somebody to answer the phone when you call 911, but none of that work is free.\u201d<\/p>\n The proposed 2026 budget projects spending roughly the same amount the city expects to bring in with the reserve funds included: about $126 million. Kelly said he\u2019s not worried about running a deficit, unless Reading faces large, unforeseen medical or legal claims.<\/p>\n The Reading proposal comes at a precarious time for municipalities across the commonwealth: the Pennsylvania budget is more than three months late<\/a>, delaying local grant distributions; the federal government has shut down over budget discussions; local safety net services cities rely on, like Safe Berks<\/a> and the Coalition to End Homelessness<\/a>, are facing significant grant cuts and delays; and localities have a deadline at the end of 2026 to finish spending any American Rescue Plan dollars.<\/p>\n Early discussions show some disagreement about how to meet the city\u2019s financial needs. Auditor Maria Rodriguez said Monday night that she has sounded the alarm for years about the need to bring in more funds to keep up with spending levels. Cuts or new revenue streams may still be necessary, she said.<\/p>\n \u201cThis administration should be looking at other venues of how to generate revenue and not rely only on\u201d property tax increases, Rodriguez said.<\/p>\n Jack Gombach, the city\u2019s managing director, told Spotlight PA the administration told each department to zero out their budget this year \u2014 meaning the departments could not repeat their estimates from years past, but instead start from scratch and see what pet projects or operational expenses could be cut.<\/p>\n Not every department had all of their projects or desired staff positions funded this year, resulting in cost savings, Gombach said. To cut even more would be to institute layoffs and reduce resident services, he said.<\/p>\n \u201cSo this [a tax increase] really isn’t a surprise,\u201d Gombach said. \u201cWe’ve been talking about having to do this for a while. It\u2019s a recommendation from the state. The moment is now. So we’re at this point of our recovery where we have to right-size our revenues. We’ve done the expenses.\u201d<\/p>\n What is funded in the 2026 budget?<\/p>\n About 70% of the 2026 proposed budget funds city staff salaries, health care, and benefits. Kelly said the city has worked over the past few years to right-size salaries after freezing them under Act 47.<\/p>\n Still, not every department is fully staffed. Kelly said the biggest vacancies were in police and community development.<\/p>\n The police department currently has around 155 people, but the budget accounts for 175 to allow for growth. Separately, the administration is requesting City Council approve funds for three new positions: a budget analyst, a downtown activity coordinator, and a training lieutenant in the fire department.<\/p>\n Reading has steadily raised its salaries in recent years, in part because of contracts with employee unions and to counter difficulty recruiting new hires because of low pay. The administration currently is in negotiations with the police department union and plans negotiations next year with the municipal and fire unions \u2014 which will likely bring some type of salary increases for the lifetime of the contracts.<\/p>\n While the percent of the budget going to salaries rose, the expected longevity pay decreased across multiple departments, showing a slide in experienced staff. Gombach said the drops were a result of retirements.<\/p>\n While You\u2019re Here<\/p>\n Spotlight PA\u2019s nonprofit reporting is a free public service, but it depends on your support. Give now to ensure it can continue.<\/p>\n Two major capital improvement projects also are budgeted: the replacement of City Hall\u2019s 30-year-old HVAC system and the renovation of an existing building on Morgantown Road to become the new police and fire training academy.<\/p>\n Council will hear from various city departments over the coming weeks to learn more about each budget. They can then approve cuts, and their approval of the tax increase is mandatory.<\/p>\n Council President Donna Reed said she is hopeful they can find a compromise with the administration, while still funding city services.<\/p>\n \u201cThe last thing I want to do when my time and my service is done is be someone who has not stepped up to the plate to try to figure out where changes can be made so that indeed, we don’t have a return Act 47 or, worse yet, receivership,\u201d Reed told Spotlight after hearing the budget presentation.<\/p>\n Will Berks County raise property taxes?<\/p>\n Berks County Commissioner Christian Leinbach said at a town hall event Tuesday that the county did not plan to propose raising its property tax rate this year. The county budget will be publicly presented in November, followed by 30 days for public review before adoption.<\/p>\n Leinbach said the county took a new approach this year and directed each department to identify 3% cuts for 2026 and 5% cuts for 2027, but the cuts could not be to personnel. He instead gave an example of a Comcast television subscription that could easily be nixed. They decided the cuts were necessary this year after they heard about state budget delays over the summer.<\/p>\n","protected":false},"excerpt":{"rendered":"READING \u2014 City of Reading landowners may see a 6% increase on their property tax bill next year,…\n","protected":false},"author":2,"featured_media":757,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[128,130,129],"class_list":["post-756","post","type-post","status-publish","format-standard","has-post-thumbnail","category-reading","tag-reading-city","tag-reading-city-headlines","tag-reading-city-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=756"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/757"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}