Newtown Twp. Preliminary Budget Vote Stalled

Newtown Township supervisors stopped short of advancing a proposed 2027 budget last week after a lengthy debate over a 2-mill fire protection tax increase, the township’s cash reserves and how much it should pay employees taking on additional responsibilities.

The Board of Supervisors ultimately declined to advertise the preliminary budget Oct. 28, leaving the spending plan open for additional work before its expected return in November.

At the center of the debate was a proposed two-mill increase for fire protection, which supervisors said would generate about $700,000.

Supervisor Phil Calabro argued the township could instead transfer $700,000 from its General Fund balance, avoiding the tax increase while still providing additional money for fire services.

“We would save the people of the township taxes of which I think that’s part of our job and also maintain a reasonable amount in the general fund,” Calabro said.

The township has established a policy calling for a General Fund reserve equal to 10% of its budget, which supervisors said would be about $1.9 million in 2027.

Using $700,000 from that reserve would reduce it to about $1.2 million, or roughly 6.5% of the budget, according to the discussion.

“This is hard economic times,” Calabro said. “I don’t know how many people have gone to put gas in their car or gone to the grocery store or anything like that, but prices just keep going up.”

He made his position on the proposed tax increase clear.

“If that’s not the decision of the board, I will not vote for the budget because I’m looking to save the residents money, not to cost them more,” Calabro said.

Other supervisors pushed back, arguing the reserve exists to protect the township as expenses increase and traditional revenue sources flatten or potentially disappear.

One looming concern is earned income tax revenue.

Township officials estimated Newtown could lose about $400,000 if Lower Makefield Township implements an earned income tax. EIT generally goes to the municipality where a taxpayer lives if that municipality levies the tax. Newtown currently receives revenue from some people who work in the township but live in communities without an EIT.

Newtown also no longer sees the level of development-related revenue it once did, officials said.

“So now we have less revenue coming in,” board member Elen Snyder said. “EIT, unless we get this hole for $400,000 remains kind of flat, but our expenditures are going up, right? So, at some point, if nothing else changed other than costs go up, at some point we run out of money and if we don’t raise taxes.”

Supervisor Melissa Merk said the township is already moving toward an unsustainable pattern of spending more than it receives.

“My review of the budgets over the last few years shows that we are now in a pattern of spending more money than we take in,” Merk said. “We are chipping away at that general fund balance at a rate that is not sustainable.”

She said some reserve money could be returned to residents indirectly through one-time investments, particularly road improvements, rather than being used to cover recurring fire department expenses.

The township currently budgets about $850,000 for roads, compared with $1.8 million cited for both Northampton and Lower Makefield townships and $1.15 million for Doylestown Township.

“I believe we need more money for our roads program,” Merk said.

Employee compensation also emerged as a major sticking point.

Newtown has been unable to hire a finance director despite multiple attempts. Officials said one township employee has assumed significant financial responsibilities in the meantime, prompting discussion of a roughly $35,000 compensation increase.

Snyder defended paying employees for substantially expanded duties, noting that a finance director would normally command a salary of about $150,000.

“We cannot expect people to continue taking on additional work without the appropriate pay,” Snyder said.

Officials said the township initially received only three applications for its finance director opening and none met expectations. A second advertisement produced no applicants.

Calabro strongly objected to the proposed compensation, arguing a 5% raise and possible year-end stipend would be more appropriate.

“When you’re talking about compensation, there has to be a reality check here,” Calabro said.

He also called for regular employee evaluations before significant raises are awarded.

“We need to sit down with everyone and go over and basically justify why they’re making the money they’re making,” he said. “But we haven’t done that in years.”

Chairman Edward Merriman said the employee’s work went beyond simply helping another department, noting Newtown received a clean 2025 audit while operating without a finance director.

“I think also part of the reward here is because, you know, there is this the idea that at some point we will get somebody back in who can do this job,” Merriman said. “So it is, it’s sort of in some ways transient, right? The work isn’t going to be, you know, necessarily there forever. But while it’s being done I think it should be rewarded.”

Residents joined the debate.

Resident John Mack asked the township to make the proposed budget available and hold a dedicated work session so taxpayers could examine the numbers before adoption.