Bethlehem mayor proposes 2.6% property tax increase, says those funds could bolster public safety

• Bethlehem's proposed budget would include a 2.6% real estate tax hike and the hiring of four new paramedics
• $11 million in ARPA funding would go to fund street paving, public safety and park improvements
• Bethlehem Mayor J. Williams said managing expenses and spearheading debt is crucial

BETHLEHEM, Pa. — At a budget hearing Tuesday, Bethlehem Mayor J. William Reynolds revealed his philosophy when it comes to the city's annual spending plan.
“We understand you have short-term fiscal responsibility, which leads to long-term fiscal opportunity,” Reynolds said.

He said the city’s $113 million budget for 2024 is centered around handling sustainable expenses using sustainable revenues.

Reynolds said lots of financial investment has sparked natural growth in city property taxes. But the city is in need of four new paramedics as a result of an increase in service calls, and a 2.6% real estate tax hike could help provide the funds to make those hires.

If approved, this would raise the millage rate in Northampton County from 19.14 to 19.64 mills. That would mean the owner of a $57,000 home would pay $28.55 more in property taxes, according to Bethlehem Business Administrator Eric Evans.

Evans said a mill in Lehigh County is dependent on a property's market value. Under Bethlehem's proposed budget, the rate would change from 6.05 to 6.21 mills.

The last time the city's real estate taxes saw a hike was 2021, when officials approved a 5% lift.

In addition to the new first responders, that money could cover new police body and dash cameras, as well as radios for the department, officials said.

Citing significant new sustainable revenues of $3.01 million, the mayor said the city’s in a good spot moving forward.

Edward Boscola, city director of water and sewer resources, said last week there could be an 8% bump in sewer fees to minimize borrowing and continue capital improvements at the city's wastewater treatment facility.

The city also boasts an earned income tax rate at 1%, versus other places around the state with up to a 3.75% tax, Reynolds said.

Bethlehem has seen assorted business development revenue growth at $375,000.

The city also has seen half a million dollars in earned income tax growth and interest income of $450,000.

Bethlehem holds a bond rating at AA- Stable, something that the mayor attributed to lots of economic investment from the city and those living and working within its limits.

Sustainable revenues

Some of the city's pension fund is being addressed using a street light program initiative, which included an upgrade of thousands of city lights to LEDs and an acquisition of street lighting from a previous provider.

That was paired with using a bond, respective debt service, outsourced maintenance and lower energy costs to save money for the city.

Reynolds said American Rescue Plan money has offered the city a one-time revenue for making significant community improvements.

Capital improvements covered by ARPA funding are planned to include $3 million in street paving, a $1.3 million fire engine replacement, $600,000 to replace two ambulances and $400,000 for parks.

City officials also look to use $2 million of the money in both 2024 and 2025 to cover lost revenue from the pandemic.

That will exhaust the $35 million in ARPA allocations, Reynolds said.

Sustainable expense increases include more than $1.15 million in salary increases for police, fire and other city employees; almost $1 million in new body and dash cams for police; more than $300,000 for four new paramedics; and $110,000 in worker’s comp and general insurance.

That includes a 3% increase in police salaries, coming out to over $500,000; a 4% increase for fire, amounting to $385,999, or the largest since 2011; and more than $265,000 for other personnel.

“So every single year, we’re thinking to ourselves, how are we going to be able to pull in over a million dollars to be able to pay for these very deserving salary increases?” Reynolds said.

Public safety

The newest police body and dash camera buys would take nearly $600,000 from the new general fund as a tax revenue expenditure, and from a one-time revenue source of almost $400,000 from the state Commission on Crime and Delinquency Grant.

The remaining $202,800 from that commission grant is planned to be used for police recruitment efforts and retention bonuses during the upcoming year.

With $1.2 million invested in the police fleet since 2022, some patrol vehicles still are not in department inventory just yet due to a variety of factors, such as supply chain issues.

The mayor’s presentation listed five patrol vehicles and one motorcycle planned for purchase.

In the new year, there's also a plan to see a $1.3 million investment in frontline fire department spending.

Handling debt

He said the city had acquired upwards of $171 million in debt by 2015, attributing some of that to the loss of economic activity from the decline of Bethlehem Steel and related property investment.

And with the city “aggressively” handling its debt in $10.5 million annual payments, city officials have said Bethlehem's in a good spot to pay that off in the years to come, covering about $71 million between just 2015 to 2024.

“There is not a city out there that you’re going to find a better percentage as far as your revenues versus your debt that you’ve paid off over a 13-year period like that,” Reynolds said.

Officials are aiming for that total debt amount to be about $56 million by 2028, all in all totaling to $115 million paid over 13 years.

The mayor said following 2028, payments should start growing small to some degree since the city will be able to structure its debt.

Additional budget hearings include public works and water/sewer 6 p.m. Nov. 15; general fund revenues and expenses 6 p.m. Nov. 28; as well as fire, police and community and economic development 6 p.m. Nov. 30.

Note: This report previously gave incorrect information on the proposed tax increase. It's since been updated.