Last year we explained how your taxes work from a broad sense. In that article, we explained how you are taxed by three different taxing entities (County, Centennial School District (CSD), and Warminster Township). Now, we will explain how the Warminster Municipal Taxes work to give you a better understanding of how you are taxed and where that money goes once collected.
The municipal portion of your property taxes are set by the Warminster Township Board of Supervisors and collected by the Township Tax Collector. Prior to the current Board of Supervisors’ decision to increase this tax by 35% in 2020, you were paying a total of 17.07 mills. What this means in dollars depends largely on where you live and the year your home was built. For example, the average assessed value of a home in 2020 is roughly $250,000, which means your municipal tax was about $427 in 2019. The 2020 tax increase raises that amount to about $576. But, if you live in a newer home, like the homes on Wiltshire Lane, you pay over $1,300 in municipal taxes. If you want to find out what the assessment is for your property, you can look it up here.
The Municipal portion of your taxes are made up of 6 separate taxes, all with an specific purpose. These six taxes include a tax for the General Fund (14 mills), Parks and Recreation (3.5 mills), Library (1.85 mills) , Fire Fund (1.5 mills) , Ambulance (0.19 mills) and Debt Service (2.02 mills). The breakdown of these taxes before and after the 2020 tax increase is illustrated in the pie charts below. Note that a lower percentage of your tax dollars are being used for General Fund, Fire and Library and a higher percentage is being used for Parks and Rec and Debt Service, with the percentage of debt service being more than double than what it was in 2019. This is due to the 169% increase in the debt service mill rate in 2020.
To better understand what these tax dollars are used for, we will break down each fund and explain the purpose of each.
General Fund – This fund pays for the general operations of the township. This includes expenses for Administration, Police, Public Works, etc. The mill rate for the general fund is capped by the Second-Class Township Code at 14 mills, which is our current rate, but can be increased by up to 5 mills with state court approval. In addition to real estate taxes, the general fund receives revenue in the form of Act 511 taxes (business taxes, Earned Income Tax, etc), grants from the state and/or federal government, licensing fees, fines and permits, as well as payments for shared services from surrounding townships and other miscellaneous revenues. Taxes for the general fund was increased from 11.09 mills to 14 mills, or a 26.2% increase in 2020. For the average property owner in Warminster, this amounts to about $350/year in taxes that is allocated for the General Fund.
Parks and Recreation Fund – The tax dollars collected for the Parks and Recreation Fund are used to pay the operational and maintenance costs for the 13 parks around the township. The law does not place a limit how high the tax can be for Parks and Rec. In addition to real estate taxes dedicated to the Parks and Rec Fund, additional revenues are generated through rental fees, grants and donations. The Second-Class Township code does not place a cap on the mill rate that can be set for the Parks and Recreation Fund. In 2020, the taxes for Parks and Rec were increased from 2 mills to 3.5, or 75%. This increase was due to the park upgrade projects as well as the expected addition of the Shenandoah Woods project into the Community Park. It costs about $85/year in taxes for the average property owner in Warminster to support the Parks in the Township.
Library Fund – The Library Fund tax is used for the operational costs of the Warminster Library. Unlike other township taxes which are authorized by the Second-Class Township Code, the Library tax is authorized by the Library laws of Pennsylvania. There is no limit to the amount of tax that can be collected for the Library Fund. The current rate for the Library Fund is 1.85 mills, or about $85/year for the average property owner in Warminster.
Fire Fund – As per the Second-Class Township Code, the fire fund is used “to purchase and maintain fire apparatus and a suitable place to house fire apparatus, to make appropriations to fire companies located inside and outside the township, to make appropriations for the training of fire company personnel and for fire training schools or centers and to contract with adjacent municipal corporations or volunteer fire companies therein for fire protection.” This tax is capped at 3 mills but can be raised only if the question is submitted to and voted on by the voters of the township. No more than one-half of the total tax, but not to exceed 1 mill, may be used to pay salaries, benefits, or other compensation of firefighters. With the addition of 5 paid firefighters in 2021, the salaries and benefits of those firefighters will be paid for using a federal SAFER grant for the first three years. The bulk of those salaries and benefits will be paid for using revenues from the General Fund after the grant expires. Finally, due to the addition of the cost of Workers’ Compensation to the Fire Fund in 2019, the tax was increased in 2020 from 1.25 mills to 1.5, which costs the average Warminster property owner about $38/year. The Workers Comp costs were absorbed by the General Fund in 2019.
Ambulance Fund – The Ambulance Fund is used to pass through tax monies designated for ambulance services in the township. Until 2017, the ambulance service was provided by the Warminster Volunteer Ambulance Corp. After that group folded, the township entered into an agreement with the Central Bucks Emergency Medical Services to provide 24 hour / 7 days a week EMS services within the Township. As per the Second-Class Township Code, the mill rate for Ambulance services cannot exceed one-half mill. The current rate was raised from 0.13 to 0.19 mill in 2019, which is less than $5/year for the average property owner in Warminster. The increase was needed to offset additional costs that were being subsidized by the General Fund for several years.
Debt Service Fund – This fund finances debt repayments incurred by the township. As per the Second-Class Township Act, there is no limit to the mill rate for the debt service fund. Between 2000 and 2009, the mill rate for debt was zero. Between 2010 and 2019, that rate has fluctuated between 0.5 mills and 1.34 mills. In 2019, the rate was 0.75, but increased 169% to the current rate of 2.02 mills. This increase was needed to finance the up-front costs of the Warminster Community Park projects and the purchase and reclamation of Shenandoah Woods property, with the expectation that much of this debt would be repaid in less than 10 years and the debt service rate would be lowered. But, with the additional debt that the Board of Supervisors decided to take on in 2021, not only can we expect to not see this rate lowered any time soon, but the Interim Township Manager stated in the December 2020 meeting that it will likely need to be increased once the money from the storm water system sales runs out in 2023. The average property owner in Warminster pays about $50/year for debt service, or about 9% of your total Municipal taxes. You can read about the debt and expected taxes here.
Hopefully, you now have a better understanding of how property taxes work in Warminster Township.