Meadville City Council faces likely tax increase

By Mike Crowley

MEADVILLE TRIBUNE

A tax hike that could increase bills by as much as $132 per year could be on its way for owners of real estate in the city.

Meadville City Council’s first discussion of the 2027 budget took place Tuesday, and with it came a proposal from Finance Director April Smith to raise taxes by 2 to 4 mills.

Smith told council members that the average taxpayer pays approximately $33 to $34 per mill. A the same time, each mill represents about $152,000 in revenue for the city. An increase of 4 mills, according to Smith, would generate about $608,000 — just enough to eliminate what has become the typical deficit after more than a decade of using reserve funds to balance city budgets.

“For the past 13 years, the city has been borrowing from ourself to balance the budget, meaning we’ve taken from one fund to balance the general fund,” Smith said. “That fund has now gone away. We have used all of the funds out of our rate stabilization fund. So, at this time, we do still have a revenue problem.”

The city’s rate stabilization fund was established in 1997 with $1.9 million from the sale of the sewer system to Meadville Area Sewer Authority and has served as a rainy day fund since.

The rate stabilization fund and other sources have provided an average of about $500,000 each year since 2020, according to Smith.

“I’m not saying it’s going to be that much this year,” she added, “but I anticipate something.” Reserve funds are still available in the city’s real estate fund, which contains proceeds from past sales of cityowned property, Smith told council, but should be retained for use in the event of unexpected emergencies.

“We have a little bit left in it to cover our expenses,” she said. “If our servers go down, if we have a tornado and we lose a roof off of a building — off See TAX, Page A6

Continued from Page A1 of a city building — if we lose something incredibly large, we have to cover those expenses before insurance kicks in, before all of that. I prefer not to touch that.”

When asked by Mayor Jaime Kinder how much remained in the real estate fund, Smith said she did not recall the exact amount.

The city’s 2026 budgets lists a real estate improve fund containing $1.1 million.

The discussion came two weeks after council approved a new contract with the police union that guarantees five consecutive years of 4.8 percent salary increases, but Kinder and other council members began signaling the likelihood of a tax increase this year even before approving the 2026 budget last December.

“We are doing our best this year,” Kinder said during a study session devoted to the 2026 budget. “We are probably going to have to look at possibly raising taxes next year because of insurance increases and utility increases and things that we can’t hold back, right? Even though we are doing our best by going piece by piece and lowering the things we can control.”

While no council members explicitly assented to an increase of any size during Tuesday’s discussion, none rejected the possibility and the discussion suggested an incrcease was inevitable. One possible mitigating factor, however, was the possibility of increased contributions from major nonprofits located in the city. While nonprofits are exempt from property taxes, many make payments in lieu of taxes that can lessen the burden faced by other property owners.

This year, Allegheny College will give the city $100,000 and Meadville Medical Center (MMC) will pay $75,000. MMC pays an additional $85,000 annually as part of a security agreement with the city. Nonprofits, including MMC and The Arc of Crawford County have also purchased police cruisers for the city in recent years.

Council members were optimistic this week of realizing the long-held dream of obtaining more significant payments from the nonprofits that represent a significant portion of the assessed real estate value in the city. There were repeated references to Smith meetings with nonprofits in an effort to increase the number and size of their payments.

Council member Autumn Vogel reiterated council’s goal of obtaining $500,000 in annual payments in lieu of taxes from nonprofits in the city. The more that can be generated from nonprofits, she pointed out, the less that would be needed from taxpayers in the form of a tax increase.

“Everyone reach out to the Meadville Medical Center, Allegheny College, and encourage them organizations to contribute heavily,” Vogel said. “That’s still a small fraction of what they would pay if they paid property taxes.”

Mike Crowley can be reached at (814) 724-6370 or by email at mcrowley@meadvilletribune.com.