Lycoming County Faces Potential Half-Million Tax Increase

Lycoming County is facing a potential tax increase as part of its proposed budget for 2026, presented by the county commissioners this week. The $123,254,342 budget is balanced and does not draw from the county’s fund balance, which is a positive development. However, residents may see a 0.5 mill tax increase, costing an additional $50 per $100,000 of property value.

Key Budget Highlights and Challenges

This marks the first tax increase for Lycoming County since 2018. Mya Toon, director of financial management, identified significant external factors impacting the budget. The state budget impasse and potential federal government shutdown have delayed vital reimbursements and revenue streams that are crucial for the county’s operations.

• Healthcare costs have risen by approximately $4.63 million.
• Juvenile probation services have increased by an additional $2.68 million.
• The landfill is also facing financial challenges.

Toon emphasized that years of using the fund balance to cover operational gaps have resulted in a precarious financial situation for the county. She stated that budgetary issues have not been adequately addressed over the years, leading to significant cash flow pressures.

Budget Decision-Making Process

The county commissioners made difficult decisions to tighten departmental budgets and limit discretionary spending. When the preliminary 2026 budget was drafted, it revealed a structural deficit of approximately $23 million. After thorough review, the financial management team achieved a balanced budget without utilizing the fund balance for the first time in years. The implemented tax increase is seen as a necessary action to ensure fiscal stability.

Taxes provide about 35% of the county’s revenue, making it the largest source of income. Commissioner Scott Metzger shared gratitude for employees’ understanding during budget formulation, which included requests for program cuts from department heads. Over the last two years, the county has cut $28 million from the budget, emphasizing the pressure to replenish the fund balance.

Concerns About the Fund Balance

Commissioner Marc Sortman stressed the importance of not relying on the fund balance to cover deficits. He highlighted the need to allocate approximately $500,000 annually to restore the fund balance to $20 million. Currently, the fund balance stands at about $10 million.

Sortman also critiqued the past practice of using Tax and Revenue Anticipation Notes (TRANS) to finance expenses until tax revenues are collected. He committed to ensuring that the county does not depend on TRANS in the future.

Landfill Financial Stability

During the budget process, concerns arose regarding the financial stability of the county’s landfill, which holds bonds valued at over $27 million. Sortman expressed confusion about how the landfill, previously viewed as profitable, carries such significant debt. He noted the limitations on its operational longevity and the county’s broader $57 million in bonds spread across various maturity dates.

Looking ahead, Sortman and his colleagues are dedicated to addressing these financial challenges. They are re-evaluating costs associated with county projects and eliminating unnecessary positions as part of their strategy to optimize operations.

The proposed budget will be available for public viewing on the county’s website until a final vote occurs on December 18. The commissioners remain committed to exploring further adjustments to the budget.