Coronavirus Causes Newtown Township Budget Crunch

NEWTOWN, PA — The coronavirus crisis is having significant budget impacts in Newtown Township, officials say.

Township Manager Micah Lewis said exact figures demonstrating how much revenue loss the coronavirus crisis has caused the township are not yet available, because it is ongoing.

The township's expected expenditures in the 2020 budget were estimated to be about $13.1 million. Revenues were expected to be more than $14.4 million, leaving an estimated fund balance of $1.3 million. But the pandemic has likely changed that.

"It is anticipated that Newtown will see a drastic decrease in Earned Income Tax revenue (1 percent tax levied on income), which is the primary source of revenue in the budget. Additionally, it is anticipated that Real Estate Transfer Tax, building and life safety permit revenue, and Park & Recreation revenue will be drastically decreased," he said.

The township has already taken some steps to offset the anticipated loss in revenue, he said.

The initial round of expanded road paving bids were rejected, and the township is reallocating the real estate tax millage associated with the loan for the expanded paving program back to the general operating fund.

Plus, the township has eliminated all discretionary spending, eliminated certain capital improvements, and suspended hiring additional staff. "This will remain in place until the extent of the anticipated losses can be realized," Lewis said.

He noted the township has reached out to the state Department of Community and Economic Development to determine if there are any loans, lines of credit, or other resources available to assist municipalities with operational expenses during the crisis.

The problem is not unique to Newtown Township.

"All municipalities are experiencing some sort of difficulty with the loss in revenues from taxes, and there has been very little assistance available so far to municipalities from the state or federal government," he said.

He said Newtown Township staff will continuously be reviewing the budget to determine other areas to offset revenues.

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