ALLENTOWN, Pa. — A no-tax-increase budget for Lehigh County could need to be revisited if the state budget impasse isn't resolved soon, Lehigh County officials were told Monday.
The county commissioners’ Finance Committee was assembled reviewed the county's 2026 budget and evaluate areas of concern.
At the top of the list, of course, was the state budget impasse which has forced the county to rely on its $25 million stabilization fund to pay the bills.
As it stands, the county budget is set at just about $538.5 million.
While the commissioners currently aim to keep the tax rate set at 3.78 mills — meaning a home valued at the median price of $271,400 would pay $1,028.61 annually — the uncertainty of state funding because of the impasse may prove problematic.
County Chief Fiscal Officer Timothy A. Reeves said one possible way to help keep things going would be a county property tax increase.
Reeves said an increase to 3.84 mills would generate about $1.9 million while raising the average resident’s tax $16.28 annually.
Reeves told commissioners that Monday's point was not to “drill into the budgets,” but instead provide a “high overview of changes that have occurred year over year.”
Primarily, that was a few chief areas of concern that Reeves said could be evaluated on a deeper level next Monday — including tax revenue, personnel and benefit expenses, debt, the pension program and more.
May have to act sooner
Reeves pointed first to 2024’s finished net profit of $1.2 million, and 2025’s net loss of $3.7 million.
“Why are we showing that from 2024 actual to 2025 reforecast numbers that there is going to be a $5 million variation?" Reeves said.
"And in reality, it comes down to basically two numbers, the two numbers that I've highlighted in 2025 as you all are aware of.
"As of right now, I've heard some positive comments, but I don't really see any real movement toward a solution.”Lehigh County Chief Fiscal Officer Tim Reeves
“We are in a budget impasse with the state, which not only requires us to potentially look toward borrowing money at some point in the future, it also handcuffs our ability to invest the $25 million-plus that we had set aside in our money as you know, as I've described over, over the last couple years.”
Reeves said commissioners should push the state for reimbursement for any interest they would need to take to pay loans intended to keep the county operating normally.
“I would take it one step further and say they really should compensate us for the loss of revenue that we use our funds to kind of accommodate some of that right out of the gate,” Reeves said.
But the county may have to act even sooner.
According to Reeves, there are concerns that “we’re about $15 million into our $25 million stabilization,” meaning it may be necessary to begin discussions with banks about a loan to keep things running — at least until state funding comes through, if it does.
“I most likely would be looking to take a loan in the neighborhood of $50 million unless there's an indication from somebody that gives me a whole lot more credibility that something's going to happen before that,” Reeves said.
“Because as of right now, I've heard some positive comments, but I don't really see any real movement toward a solution.”
Additional expenses
Reeves also cited the recently approved PrimeCare Medical Inc. contract, which saw a budget increase covered by ARPA funds in 2025, and will increase about $1 million for 2026.
Juvenile probation and maintenance contracts increased $1 million, and an increase of about $800,000 to $900,000 for human services was requested.
Other cost increases included a $3 million bump in personnel costs, entailing a step increase for all non-union employees, and an additional 11 employees added to the roster.
Reeves touched on a potential shift in health care coverage, saying a Reference-Based Pricing setup could yield savings for the county while lifting network restrictions to employees and increasing transparency and cost predictability.
The tradeoff? Ongoing in-depth employee education, higher probabilities for balance billing and unexpected costs, providers not accepting the reimbursement rate, and a potential administrative burden.
Reeves said a more thorough breakdown of the raised points will be presented at the commissioners’ Sept. 15 meeting.
