Lancaster City Council adopts 2025 budget, raises earned-income tax to 1.1% and reallocates ARPA funds

Lancaster City Council on Dec. 17 approved the city's 2025 operating budget, voted to raise the city's earned-income tax (EIT) from 0.6% to 1.1%, and adopted several ordinances reallocating American Rescue Plan Act (ARPA) funds for city projects and housing programs.

The council's actions included passage of the administration's budget ordinance for 2025, a separate ordinance keeping the 2025 property tax millage unchanged, an ordinance increasing the EIT, and a set of ARPA appropriations that redirect previously awarded but unspent federal funds back into local programs such as a critical home-repair program and park improvements.

The decisions cap a meeting that featured extended public comment and several residents urging council to include tax-exemption or rebate mechanisms for low-income households before adopting Home Rule-era tax changes. Speakers also raised maintenance and safety concerns for bike lanes and city parks.

Council adopted the 2025 budget after public remarks from residents and advocates who asked for exemptions or rebates for low‑income residents and questioned administrative readiness to implement relief programs tied to the new Home Rule authority. Resident Tony Dastra pressed for exemptions and a rebate mechanism tied to municipal services; Arthur Morris and other residents questioned the timing and scale of the EIT increase and offered revenue projections that they said staff should review.

Mayor Saraki said the additional EIT revenue is intended in part to shore up the city's reserve ratio for bond-rating considerations: "our general reserve fund, which is currently, I believe, 14.7 percent, and we're trying to get it closer to 20," she said during the meeting.

Public commenters and several council members asked staff for follow-up analysis on implementation costs, the county tax-collection bureau's willingness to process Home Rule changes, and whether exemptions or rebate programs could be administered without burdening city staff.

Votes at a glance

- Administration Bill 10 (2024) — 2025 budget ordinance appropriating sums for city government operations in 2025. Motion to approve; recorded roll call produced majority approval. Outcome: approved.

- Administration Bill 11 (2024) — ordinance setting the real-estate millage rate at 12.64 mills (no change from 2024). Motion to approve; outcome: approved.

- Administration Bill 12 (2024) — ordinance increasing the earned-income and net-profits tax for city residents from 0.6% to 1.1% (a 0.5 percentage-point increase). Motion to approve; outcome: approved (roll call included at least one recorded dissent). The EIT change takes effect as provided in the ordinance text.

- Administration Resolution 13 (2024) — amendment to a local code section noted in the meeting (described in the record as an increase in store rentals to customers by 12% effective Jan. 6, 2025). Motion to approve; outcome: approved.

- ARPA-related ordinance (formal number discussed during the meeting) — ordinance to reclaim ARPA proceeds previously awarded to non-city grantees if those funds are returned unused and to reallocate them to the city's critical-repair and affordable-housing programs. Motion to approve; outcome: approved (language places returned funds into city programs through end-of-grant windows noted by staff).

- Administration Bill 15 (2024) — $1,000,000 in ARPA funds appropriated to the Joe Jackson Top Lot Park project (also noted as receiving a $250,000 DCED grant). Motion to approve; outcome: approved.

- Administration Bill 16 (2024) — $6,000,000 ARPA appropriations to be carried in the 2024/2025 budget consistent with ARPA guidelines. Motion to approve; outcome: approved.

- Administration Bill 17 (2024) — $2,400,000 ARPA appropriation for 2025 budget items required by federal ARPA timelines. Motion to approve; outcome: approved.

- Administration Bill 18 (2024) — ordinance directing the continued effect of existing city code and directing officials to take steps to effectuate a transition to the Home Rule charter effective Jan. 1, 2025. Motion to approve; outcome: approved.

- Administration Bill 19 (2024) — first reading: $150,000 in ARPA funds returned by a grantee (Lancaster-Lebanon Habitat for Humanity) proposed to be reallocated to the city's critical repair program; set for final consideration at a special council meeting Dec. 23, 2024. Outcome: first reading; no final vote at this meeting.

- Resolution 97 (2024) — amendment to the schedule of fees and charges for solid-waste and recycling services provided by the city contractor; set to take effect Jan. 1, 2025. Motion to approve; outcome: approved.

What council members and residents said

Resident Tony Dastra, who spoke during the public-comment period, urged council to adopt exemptions or a rebate tied to municipal services and described repeated problems keeping bike lanes clear of leaves, debris and parked cars. "I really do not wanna see someone killed," he said about hazards to cyclists at left-turn intersections and urged traffic-control enforcement and signage.

Resident Emily Wilson described repeated, unresolved fix-it tickets to clear leaves from bike lanes. "I submitted an online form yesterday morning, and by 10:30, I was approved to speak here today... I started submitting fix it tickets on October 23rd," she said, describing multiple follow-ups before city crews responded.

Resident Arthur Morris questioned the need and timing of the EIT increase and presented revenue projections at the microphone, saying the proposed 0.5-percentage-point change represents a large increase on current City EIT; he urged more analysis before imposing a change that affects taxpayers, particularly those on fixed incomes.

Mayor Saraki and other council members acknowledged public concern and said staff would continue to work with residents and stakeholder groups to study exemptions, operational costs and collection logistics. The mayor also urged residents to discuss projections with Director Campbell and said staff are working on long-term capital planning and bond-rating considerations.

ARPA reallocations and the critical-repair program

Council discussed several items that reassign unused ARPA dollars to programs where the city can deploy them quickly. Council said Lancaster-Lebanon Habitat for Humanity informed the city it could not proceed with a particular project within ARPA timelines; council and Habitat mutually agreed the grantee would forgo the ARPA award and enter a memorandum of understanding to encumber other city housing dollars by March 30, 2025.

Director Delphs said that after a prior $300,000 allocation, the city had completed 37 critical-repair projects year-to-date and that additional funds would allow work on households still on the waiting list.

Park safety and other comments

Residents also used the meeting to raise park-safety and maintenance issues. Jose Rivera and others urged more lighting, cameras and needle-disposal options in small parks, and noted or reported syringes were being found in play areas. Resident Irene Grievous and others raised concerns about the city's responsiveness to trash and housing-code complaints and asked for direct follow-up from staff.

Why it matters

The council's vote to increase the EIT creates a new, higher revenue stream that city leaders say is needed to stabilize reserves and support capital planning and borrowing capacity for the coming decade. At the same time, residents and some council members pressed for mechanisms to protect low-income households from the tax change and asked for clearer administrative plans on exemptions, rebate programs and tax-collection logistics under the new Home Rule charter.

What's next

Council scheduled a special meeting for Dec. 23 at 6 p.m. to consider the first-reading items (including the proposed $150,000 ARPA reallocation tied to Habitat for Humanity). Staff said they will continue follow-up with residents who requested more information on the critical-repair program, trash collections, and other services discussed at the meeting.