This is the thirteenth budget in the last 17 years with no real estate or Act 511 tax increase. Chambersburg rarely raises real estate taxes and generally only for Police Department and Fire Department needs. The Borough of Chambersburg did not raise real estate taxes between 2007 and 2013; then, the Council was very conservative with minor increases in 2014, 2016, 2018, 2022, and 2023.
In recent history, in most years Chambersburg has not raised the real estate tax rate. Other entities often raise taxes on our taxpayers, such as Franklin County or the Chambersburg Area School District, and that sometimes leads to confusion. When the Borough raises the real estate tax rate, it is only to fund police and fire services. In 2018 a tax was instituted to begin paying off the 2016 Recreation Bond. In 2022, a tax was instituted to begin paying off the 2022 Police Station Bond.
Recall, Chambersburg is unique in our commitment to public safety and emergency services. In 2020, Town Council repealed the Ambulance Tax. This was in conjunction with the establishment of a new ready-to-serve mandatory Ambulance Fee on all water utility invoices (because water fees are attributed to the property owner or owner’s designee). A Police or Fire subscription fee is specifically prohibited. However, emergency medical services is different. Beginning in 2024, there will be an increase to the monthly Ambulance Fee which appears on utility bills. The surcharge, unlike a real estate tax, is broad-based. Utility customers of the Borough will continue to pay this flat fee.
The Ambulance Fee will rise from a flat $9.50 per month per water service connection to a flat $11.00 per month per water service connection per residential or commercial unit. This fee supports the EMS service, but it is clearly not a tax because tax-exempt property owners pay it on their monthly water bills.
With no other options available to Town Council beyond property tax increases, and with 24% of the town’s assessed property value being exempt from paying the Police and Fire real estate tax, owners of taxable properties must bear the full burden of paying for public safety services. Proportionately, this burden falls most heavily on those least able to afford paying for the services: the elderly and those on fixed incomes who own real estate. Whereas, 100% of water customers pay a fee placed on utility invoices. If there was a more broad-based tax available (i.e., a sales tax), that might be a more appropriate tax to fund an emergency service such as our struggling ambulance service. However, that is not a possibility under State Law.
The 2016 Recreation Bond paid for capital investment in a number of Recreation Department facilities including new playgrounds, tennis courts, a new roof and windows on the Rec Center, and a new state-of-the-art Aquatic Center. To fund the bond, which is a form of debt like a mortgage, Council at the time imposed a special Recreation Bond Tax on all property owners who are not exempt from real estate taxes. The resulting assets built from the bond were added as community-owned assets to the Borough’s balance sheet.
This use of debt to build asset value for the community is a corporate way of funding improvements. Further, dedicating a tax to pay it off is not dissimilar to when a homeowner takes out a mortgage. In 2022, the Borough refinanced this debt to a lower interest rate. As a result, the annual debt payments dropped and a small tax decrease was possible for the Recreation Bond Tax.

In 2022, Town Council approved a new bond (actually two companion bonds) associated with the renovation of the Borough’s 1971/1972 Police Station on S. Second Street. This new debt was used exclusively for that project, for the replacement of the roof on the old part of City Hall (the 1930s addition) and the roof/historic clock tower on the original part of City Hall (the Market House). Further, a new dedicated tax was established by the 2022 budget to pay off that bond. Construction of the renovated and expanded Police Station (as well as the clock tower renovation) is complete and the Police Department returned home in 2023. The ribbon cutting event was on September 20, 2023.

The Police Station Bond Tax will continue until the debt for this project is paid off. The total rate is not anticipated to change for the duration of the payoff period.
Fully restored Market House cupola and clock tower

Newly completed addition to the Police Station and Sally Port driveway

What of the Police Tax in 2024?

In our area, Chambersburg is the only municipality with a full service, round the clock, local police department. It is a professional and successful law enforcement organization. In 2016, Town Council appointed a new Police Chief, Ron Camacho who joined the Borough in mid-2016; a highly qualified law enforcement professional, he has installed a series of upgrades in the organization and their standard operating procedures since joining Chambersburg. In 2021, Council supplemented the Police Department leadership by adding a Police Inspector to the squad, in addition to the Chief and the Lieutenant. In 2023, it remains very expensive to operate a high performing police department, but unlike our neighbors who have chosen to rely on the Pennsylvania State Police, the Chambersburg Police Department plays a much more proactive role in public safety within the corporate boundaries of the Borough.
Chambersburg remains an incredibly safe community with very low crime rates, despite perceptions otherwise. In fact, with their intense crime-prevention and crime-solving tools, a record decrease in crime is the single biggest accomplishment of the Police Department.
Many township residents have no idea that they have no local police in their community. I have nothing but respect for the Pennsylvania State Police, but they are not a local police force and they cannot provide the exact same response or services provided by the Chambersburg Police Department to the Borough. Until 2014, 100% of the real estate taxes collected by the Borough were used exclusively to support the Chambersburg Police Department. In 2014, a small share was added to support the Chambersburg Fire Department. While the Police and Fire tax rate grew in 2018, this remains the sole operational use of real estate taxes. Perhaps this explains why Greene, Guilford, Letterkenny, and Antrim townships have no local real estate tax. The Borough collects almost enough Police Tax to pay for the cost of operating the Police Department. Every dollar of designated revenue from the Police Tax is used wisely by the Police Department.
In 2022, the separate Police Station Bond Tax was added. In January 2023, this budget recommends no change in the Police Tax, which is 25 mil. Overall, since December 2006, the Police Tax rate has risen from 17 mil to 25 mil. When averaged out over the seventeen years, that is a growth rate of a little over 2.4% per year. In 2024, it is the Borough Manager’s recommendation that the Borough keep the Police Tax rate at 25 mil.

In 2023, it is estimated that the Chambersburg Police Department will cost $440,185 more to operate than the revenues collected. This includes shifting police pension subsidies from utility departments to help the Police Department as well as the estimated yield of 25 mil of Police Tax.
The Chambersburg Police Department did an excellent job of controlling costs in their adopted 2024 budget. As a result, operational costs actually dropped by over $400,000 allowing the adopted 2024 budget to be balanced. Much of this is as a result of smart equipment purchases.
As a result of those changes, no tax increase is needed.

However, a storm is clearly brewing in the future. At 25 mil, the Police Tax is almost at the State mandated maximum rate. It is merely a matter of time before inflation brings this rate to the maximum permitted rate of 30 mil. That will happen quicker if new personnel are needed to keep our community safe. This is not a sustainable situation. Many additional expenses are on the horizon.
Furthermore, please understand that the value of 1 mil is different in every County in Pennsylvania and in every municipality. Articulating the cap in the form of a mil makes the Borough dependent upon Franklin County to keep the tax rolls up to date. In Franklin County, unlike Cumberland or Adams, the County has not conducted the required updated of the tax rolls since 1962. As a result, the value of 1 mil has dropped significantly. A county-wide reassessment would reestablish the value of 1 mil and help funding for the Police Department going into the next decade. We hope the County Commissioners address this problem soon before Chambersburg hits the tax ceiling caused by their delay of reassessment.
In general, if the Police Department runs a deficit as it is anticipated to do so in 2023, it is commixed with all the revenue and expenditures in the General Fund. The General Fund miscellaneous revenue must cover it as it does with all the General Fund departments including Fire, EMS, the Recreation Department, Land Use & Community Development, and general highway, which are all mixed together pursuant to the State recommended chart of accounts.
Therefore, in 2023, we are anticipating a deficit for the Police Department of $440,185; although we will see how the year ends up. In 2024, for only the second time since 2020, given controls on spending and a slight increase in tax yield, will the Police Tax generate enough revenue to pay for approximately 100% of the Police Department (when including other police related revenues such as the shift in pension subsidy). As is pointed out in this budget, it will be impossible to avoid future Police Tax rate increases. A deficit is not sustainable as it draws resources from other General Fund operations.
Please keep in mind that we are operating the Police Department with very little margin for error. Unforeseen costs such as a major detective caseload, a major public safety event, additional unforeseen overtime, additional training, or adding more employees in advance of other future retirements, can easily throw the Police Department budget into a more unstable place.

What of the Fire Tax in 2024?

The Borough once had no Fire Tax. In 2014, a so-called neutral arbitrator imposed upon the Borough and the International Association of Fire Fighters Local #1813 a labor pact (the infamous “Kasher Decision”). Town Council was forced to add a Fire Tax. That tax was set at 2.5 mil and has remained unchanged. In exchange for this tax, and implementing the Kasher Decision, there was relative labor peace for the years following this decision. In fact, twice since then labor negotiations have avoided going back to interest arbitration for a resolution to impasses negotiating new collective bargaining agreements.
In 2022, the Borough and the International Association of Fire Fighters Local #1813 reached a negotiated labor deal thereby avoiding arbitration. We were able to avoid the cost of arbitration (lawyers, expert witnesses, and the Borough paying 100% of the arbitration panel expenses) by accepting a compromise. The 2022 deal, executed in the form of a Memorandum of Understanding, established a proposed labor contract to fix the wages and benefits between the Borough and our professional firefighters for the years 2022 through 2025.
Back in 2018, the Borough added a small (½ mil) Ambulance Tax to supplement the existing Fire Tax; the maximum permitted by State Law (½ mil). In 2020, Town Council replaced that Ambulance Tax with the Ambulance Fee, a surcharge on water invoices.
Unfortunately, in 2020 the Borough concluded that the Fire Tax was insufficient to pay for the cost of the Fire Department’s ambulance service. There is no legal way to raise it. The Fire Tax cannot exceed 3 mil and the now-repealed Ambulance Tax cannot exceed ½ mil under State Law. In 2020, Town Council repealed the ½ mil Ambulance Tax in its entirety and adopted the Ambulance Fee surcharge on water invoices in its place.
The Borough is once again at a financial crossroads with respect to funding the Fire Department and its associated basic-lifesaving ambulance service. The cost of these operations, coupled with the inability to collect all ambulance use-fees incurred and a state-imposed cap on the Fire Tax, has left the Borough in a precarious fiscal position. Meanwhile, the cost of Fire Department operations continues to rise.
There is no change in the Fire Tax for 2024 because an increase is not possible. State law places a limit on the Borough at a very low tax rate for the purpose of paying for the Fire Department. Not that we like taxes, but the 1965 State Law makes no sense. The Borough is prohibited from levying more than 2.5 mil (the 2024 equivalent of about $544,260) in Fire Tax, but it must be used for apparatus/truck expenses and not for firefighters. Further, the Borough is prohibited from levying more than ½ mil (the 2024 equivalent of about $107,975) for all the firefighter wages and benefits. In Chambersburg, firefighter wages and benefits cost the Borough well over $4 million per year. Obviously, this artificial limit in place since 1965 does not envision a mostly paid and experienced professional fire department, as we have here in Chambersburg.
There is no logical or practical alternative and staff is at a loss how to pay for the Fire Department in the future. One alternative is to begin to rent the department to our township neighbors, assuming that their supply of volunteer firefighters disappear. This seems to be a logical assumption.
The long-term funding issue of the Fire Department is not identical to the issue of the Police Department. The main difference is that the Fire Department brings in significant revenue. Specifically, the Fire Department is a regional provider of Basic Life Support (BLS) ambulance service inside the Borough and in parts of the surrounding townships. While less than 50% of ambulance invoices are paid (and mostly by insurance), those payments are significant. In addition, the Fire Department acts as the Borough’s Fire Code safety inspection service. Done on a tri-annual basis for most commercial businesses (and annual basis for some types of businesses), this service results in fewer fires or loss of life, and provides some income for the Fire Department.
While the revenue from the ambulance service and the Fire Code safety inspections is not enough to pay for the cost of operating the Fire Department, this and the Fire Tax combined are counted as a very respectable effort to close the gap in costs. The balance of the Fire Department operating expenses is closed by undesignated General Fund revenue above and beyond the Fire Tax. Every dollar of undesignated revenue used to close the gap between these revenues and the Fire Department budget is one less dollar that can be used for parks or recreation, highways or streets, or other functions such as economic development or new initiatives in community development.
The cost of operating the Fire Department will rise significantly in 2024. This is in part due to higher costs associated with the replacement schedule for fire apparatus as we put aside money for future purchases. Vehicles for the Fire Department are rising exponentially in cost. This plus the growing right-off for Medicaid/Medicare patients served by the Fire Department’s ambulance service, are causing strain on department finances.
In 2024, it is estimated that the Fire Department and EMS will cost $1,737,042 more to operate than the revenues collected. This includes shifting fire pension subsidies from utility departments to help the Fire Department as well as the estimated yield of ½ mil of Fire Tax permitted to be used for operations. There is no way permitted to raise the Fire Tax (approx. 7.9 mil more) to cover this deficit.
The Borough uses the Ambulance Fee to help cover the EMS portion of the deficit. If the Ambulance Fee was used to cover the whole deficit, it would be set to $24.30 per month instead of the recommended $11 per month for 2024. The Ambulance Fee is less than the allowance for uncollectable ambulance receipts as a result of Medicaid/Medicare federal rules.

In addition to the Ambulance Fee, if the Fire Department runs a deficit, it is commixed with all the revenue and expenditures in the General Fund. The General Fund miscellaneous revenue must cover it as it does with all the General Fund departments including the Police Department, the Recreation Department, Land Use & Community Development, and general highway, which are all mixed together pursuant to the State recommended chart of accounts.
The world of EMS is in such flux, we do not see any reason to not stay the course and give the process another year to unfold. Many believe the entire EMS system is on the verge of catastrophic failure.

2022 Ambulance Fee Revenue - $974,949 at $7.50/month per water service customer
2023 Ambulance Fee Revenue - $718,958 (7/31/23) at $9.50/month per water service customer

Proposal to raise Ambulance Fee to $11 per month per water service connection in 2024.

How Much Does 1 Mil of Real Estate Tax Yield in 2024?

Total assessed value of taxable real estate, inside the Borough, for 2024 is estimated to be $220,569,873; up from last year. Therefore, the cash value of 1 mil would equal $220,569. However, when factoring in our average collection rate for any given year, we should expect that same mil to yield $205,129. This difference is a result of the average amount of taxes remitted on time, annually, versus the total that is levied.
Therefore, for budget purposes, 1 mil is equal to approximately $220,569 in cash. As explained, if you assume the standard percentage of taxpayers will fail to pay their taxes, 1 mil would equal $205,129 in cash. If you assume some old outstanding tax liens from previous years may pay their debts in 2024, 1 mil might equal $220,569 in cash.
The value of a mil is thereore not precise.

The Average Single-Family Home in the Borough has a 2024 assessed value of $18,492.50. It will see a total increase of about $5 per year, or 42¢ per month, in real estate taxes because of the increased value of assessed property, which also increases the assessed value of the Average Single-Family Home, despite no change in the tax rate. Your payment of taxes for your property, rather than the average home, is based on Franklin County’s determination of your home’s assessed value.
Despite the fact that the average home changes every year, the assessed value of YOUR home likely did not change as the County has not undertaken a reassessment of real estate since 1962. We are the last County in the State to do this required recalculation. The average changes year-to-year due to new construction, improvements to properties, and assessment appeals.
The value of the average single-family home changes year-to-year. We believe the average will change from $18,330 in the current year to $18,492.50 in 2024, impacting the yield in taxes.
Finally, we have heard a growing skepticism that these numbers presented do not represent the actual average real estate tax burden. To that end, let us clarify:

Our statistics are based upon the average (median) single-family home.

Our statistics are accurate for actual single-family homes inside the Borough of Chambersburg. We state that the average single-family home will pay Borough real estate taxes of $569 per year, which means that half of all single-family homeowners will pay more and half of all single-family homeowners will pay less.

Your home’s assessed value, set by Franklin County, and not reconfirmed since 1961-1962, is public information. You can look it up online and check your Borough tax burden yourself.

This is not the measure of what a home with a fair-market value of $100,000 would pay. That statistic is nonsensical because the County does not use actual values to determine your taxes. The profile of a home with a real estate value of $100,000 wouldn’t represent the average, typical, or common home anyway. Further, fair-market values vary wildly based on physical location of the home from one town to the next or one block to the next. We use the real-life average home profile for the real average single-family home inside the Borough.

With this adopted budget, the average single-family home in the Borough will see their annual Borough real estate tax bill rise from $564 per year (before discount) to $569 per year (before discount), with no change in tax rate.

Go to https://gis.franklincountypa.gov/taxparcelviewer/ to check your home, your assessed value and your Borough tax bill.

Folks Say that They Pay More Than That in Borough Taxes, But Do They?

Here is the typical single-family home with the average assessed value of the average home in the Borough:

This house sold in 2015 for $174,900. However, it has an assessed value of $18,500. The house next door is the same age and size, but has an assessed value of $16,830. There is no logical explanation. Regardless, with an assessed value of $18,500 this is the average home in the Borough. The annual Borough tax bill for this home would be $601.25 for 2024 (before discount). This is a real home and that is their actual tax bill.

All Funds Budget
$134,254,757 which represents 0.3% decrease in budget size compared to 2023 ($443,792), due to end of the American Rescue Plan Act grant funding.
General Fund Budget
$19,790,495, a 1.4% increase due to approved wages, health insurance, pension costs for Police Officers and Firefighters keeping pace with inflation.
Available Taxes
The Borough receives no sales tax, liquor taxes, business taxes, or any other local tax; they are not options under State law. Township residents pay no taxes to the Borough other than the Local Services Tax, $1 per week, if they work inside the Borough.
Public Works Campus
The budget includes resources so that over the next 36-months Council can pay to complete the design of a new public works campus off Wayne Avenue, fees for architecture and engineering, as well as buying available neighboring properties that wish to sell.
Southgate Shopping Center
Using a Federal grant, in 2022, the Chambersburg Area Municipal Authority (CAMA) purchased the shopping center. Currently, they are the owners and store rents cover the cost of maintenance. Keystone Health has plans to break ground on a new neighborhood health care facility in 2024. Most of the land will be resold to private third-party developers over time. Town Council and the CAMA Board are applying for grants to make neighborhood improvements, some have already been awarded. Some land will be retained for parks and utilities. Project has no impact on local taxes.
Chambersburg Borough Utility Customers Have The Lowest Composite Utility Rates in Pennsylvania And That Will Not Change in 2024
SOME RATES WILL GO UP:
The average Borough utility customer pays less for utilities than most customers outside the Borough.
In fact, those residential customers with Borough gas and electric will save over $1,000 per year in utility expenses, when compared to average gas and electric customers throughout the State of Pennsylvania.
Borough natural gas, water, wastewater, electric, and sanitation rates are much lower than other municipal and private sector utilities.
The Electric and Natural Gas utilities make an annual Payment in Lieu of Taxes to support the Police and Fire departments.
Chambersburg Electric Rates to increase:
For the first time in a decade, the retail electric rates will rise overall by 11.3%; some customers will see higher increases based upon rate class, heating type, and insulation.
Unique Public Utilities:
Chambersburg is the largest public power system and the only Borough with a natural gas system in Pennsylvania. Borough Budget Has No Impact on Townships:
Township residents pay no taxes to the Borough unless they work inside the Borough limits and then only $1 per week. School taxes and County taxes are not decided by the Borough

Propert Tax Burden 2023-2024?

Only 17¢ of every $1 paid in real estate taxes will go to the Borough of Chambersburg. The balance, 83¢, will go to support the school district, the county, and the library system. In fact, 67¢ of every dollar goes to the Chambersburg Area School District. They send their own tax bill.

Average burden on a single-family type home inside the Borough of Chambersburg based on assessed value as decided by County

Average burden on a single-family type home inside the Borough of Chambersburg based on assessed value.

The budget and tax rates for the Chambersburg Area School District are set by the independently elected School Board and not the Borough. The Borough has no say in these issues.

The budget and tax rates for Franklin County & the Library are set by the independently elected County Commissioners and not the Borough. The Borough has no say in these issues.

Unless you own property inside the Borough, or have a job inside the Borough, you pay the Borough no taxes. Further, if you just have a job in the Borough, you pay only $1 per week to the Borough and nothing else. In fact, almost no township residents contribute any tax money to the Borough. For example, the Sales Tax collected at stores inside the Borough all goes to support others, not the Borough.

The other state mandated taxes are set by law and are not changed year-to-year. They include the Local Services Tax, which is a $1 per week tax on workers inside the Borough; the Earned Income and Wage Tax, which is a set tax on wages earned by those who live inside the Borough; and the Deed Transfer Tax, which is a set tax when property inside the Borough is sold or transferred.

Together, along with fees and fines, these categories make up the only revenues of the Borough. In addition, the Electric Department and the Gas Department make a Payment in Lieu of Gross Receipts Taxes (PILOTs) to the General Fund. If these two departments were private corporations, they would pay taxes to the Commonwealth. As such, they are tax exempt. So instead, they pay their taxes to support your General Fund (police, fire, ambulance, highway, and recreation) activities.

State law prohibits the levy of taxes as a fee on persons (called per capita taxes) so we cannot invoice directly for police and fire services. Instead, the law allows us only to use property as the sole means to determine how much tax to collect. So, if you rent your property, your landlord will pay the real estate tax and it will be reflected in the rent you pay. There is no other system allowed. The Ambulance Club is not a tax or fee; rather, it is more like a service. You provide us a gift and in exchange, we accept assignment from your health insurance company if you need to use the Borough ambulance service.

Although Borough non-exempt real estate owners pay for the police and fire, they do respond to police and fire calls in the townships. State law requires that emergency services respond to all dispatches for health and safety. The Borough’s emergency services will always support our township neighbors regardless of money issues. We also enjoy the support of the various volunteer fire companies from the townships and the Pennsylvania State Police. Mutual aid is a very important principle in public safety.

However, can the Borough afford police officers and fire fighters when the money to pay for them can only come from such a small group of taxpayers? Unfortunately, the statewide system is broken. We can envision nothing but painful tax increases in the future to pay for growing police and fire expenses.

The local townships do not have police departments. They rely on the Pennsylvania State Police. They do not have township employee fire departments. They rely on the generosity of volunteer firefighters. All of the Borough’s local real estate taxes go for these functions. Moreover, while we might wish to not have paid police and fire departments, unfortunately we cannot go back.

Therefore, under the authority of state statutes, the Borough levies the following taxes:

Real Estate Property Tax - Determined by Town Council, and collected by the Borough's elected Tax Collector. Real Estate Property Tax is based on assessment values as established by Franklin County. The current assessed value of real estate in Franklin County is 100% of (1961) Market Value. Town Council annually enacts a Mil Rate to determine the Borough's portion of Real Estate Tax assessed to each parcel within the Borough. One mil is equal to 1/1000 of a dollar, or 0.001% of the assessed value. For example, if your property's assessed value equals $20,000.00, one mil equates to $20.00 in taxes.

Real Estate Property Tax bills are distributed on or about March 1st of each year. Payment is due at a 2% discount by April 30th, at face value by June 30th, or at a 10% penalty after June 30th of each year. Payment is to be remitted to the Borough's elected Tax Collector - Brenda Hill, 401 Lincoln Way East, Chambersburg, PA 17201. (717) 263-6565.

Earned Income - Determined by Town Council, and collected by the Franklin County Area Tax Bureau. The Borough's current Earned Income Tax Rate is one half of one percent, or 0.5%, assessed against all earned income and net profits of the residents of the Borough. Typically this tax is withheld and submitted by the employer. However, if it is not withheld and submitted on a resident's behalf, the resident is required to remit quarterly payments to the Franklin County Area Tax Bureau office, located at 443 Stanley Avenue, Chambersburg, PA 17201. (717) 263-5141 www.fcatb.org

• Local Services Tax (LST) - Determined by Town Council, and collected by the Franklin County Area Tax Bureau. The LST is assessed to all individuals working in the Borough, earning over $12,000.00 annually. The purpose of the LST is to assist with funding for the Borough's emergency services that are available to individuals who spend their work day in the Borough. The LST is withheld and submitted by the employer, at a uniform rate per pay period, over the course of the calendar year. For more information regarding the Earned Income & Net Profits Tax and/or Local Services Tax (LST), please contact the Franklin County Area Tax Bureau directly: 443 Stanley Avenue, Chambersburg, PA 17201, (717) 263-5141, www.fcatb.org
  
  2024 Sample Borough Tax Bill