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Reading auditor makes budget recommendations

Mayor Eddie Moran proposed his 2022 spending plan with no tax increase a couple months ago, and the city auditor Monday night made some recommendations to the budget.

Moran proposed a $94 million budget that did not include a tax increase in October. The 2022 budget is a $2.6 million increase over the 2021 budget. The administration also proposed using about $2.8 million in reserves to cover a deficit.

City Auditor Maria Rodriguez released her budget recommendations Monday night at the committee of the whole meeting. The recommendations are nonbinding, and Rodriguez is required to make the recommendations per the city’s charter.

She suggested budgeting higher revenues in some line items and lower revenues in others.

Since the real estate market has been particularly strong in the city, Rodriguez suggested budgeting an additional $300,000 in real estate transfer tax revenues.

The city received $6.2 million in real estate transfer tax revenues in 2020 and another $7.1 million as of Oct. 31, Rodriguez said.

The city only budgeted $5.2 million in real estate transfer tax revenues in 2022, but Rodriguez believes the city could easily budget another $300,000.

“Due to how much revenue has been recorded for 2021 I think we bump it up,” Rodriguez said. “We have to be conservative because we don’t know how it can jump from year to year.”

City Finance Director Jamar Kelly agreed with Rodriguez.

“The trend on that has been super positive over the years,” Kelly said. “Definitely in full agreement in your recommendation on that.”

Moran’s administration also budgeted a little too low on the earned income tax from the prior year revenues, Rodriguez said.

In 2020, the city collected $6.1 million in earned income tax from the prior year and in 2021 has collected $7.1 million so far.

The administration budgeted for $5.1 million in 2022, but Rodriguez believes that line item can be increased $100,000 in 2022.

Rodriguez also believed the administration could expect high revenues from the city’s business privilege tax.

She believes the city should budget an addition $100,000 in revenue from the business privilege tax after the city collected $1.6 million so far this year and $1.7 million in 2020.

When it comes to occupational tax revenues, Rodriguez believes the administration overbudgeted for 2022 at $200,000.

The city has only collected $5,910 in occupational tax revenues so far in 2021.

Because there has been a decrease in those revenues in 2020 and 2021, she  believes the administration should only budget $50,000 in 2022, a decrease of $150,000 in the proposed budget.

Rodriguez suggested the city adjust its budget for traffic fines in 2022 as well.

The administration budgeted $313,600 in 2022, and Rodriguez believes that is too high.

The city only collected $24,048 in motor vehicle fines in so far this year, so she believes the administration should consider budgeting no more than $50,000 in that line item.

Kelly thought the motor vehicle fines were lower because of the pandemic. He said he would check with Police Chief Richard Tornielli to see if the chief would also recommend reducing the amount.

Rodriguez suggested the city reach out to Berks County Convention Authority to see what kind of events might be coming to the city in 2022.

“I know the city lost out on a lot of revenue in (admission tax) in 2020 due to the pandemic,” she said. “But, in 2021, we have already collected $177,000.”

Kelly was receptive of Rodriguez’s recommendations.

“I like a lot of your recommendations,” he said.  “And we will review them.”

Source: Berkshire mont

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