Allentown council opts to use $1.5M in reserves to avoid immediate property tax hike

Allentown City Council voted to take $1,500,000 from the city's closing fund balance to adopt a budget without an immediate property tax increase, a decision supporters said would spare residents a near-term hike but critics warned could weaken the city's long-term fiscal position.

The motion, introduced on the floor as an amendment to the mayor's proposed budget, was made by Chairwoman Moda and seconded by Council member Gerlach before garnering a roll-call majority. The amendment passed after council members voted on the measure during the special meeting.

Mayor Turk, whose administration proposed a package that included a 4% property tax increase and a $140 solid-waste fee rise, defended his plan as necessary to cover rising costs, including negotiated wage increases. "A 4% tax increase would result in approximately, well, a little less than $26 annually for most households in the city of Allentown," the mayor told the council while outlining revenue breakdowns by property type.

The mayor also offered an alternative he said would spread the burden: keep the 4% property tax increase but reduce the trash-fee increase to $115. He described that hybrid as "fiscally responsible," saying repeated use of cash reserves would weaken the city's bond rating and lead to steeper costs when the city next borrows.

Opponents on the dais urged caution about using reserves for ongoing operating costs. Council member Gerlach said taking from the fund balance is effectively "kicking the can down the road," and raised questions about approving tax policy before knowing the full scope of requested personnel additions. Controller Glaser explained the city's fund-balance policy and warned that sustained use of reserves would affect credit metrics used by rating agencies.

Supporters of the reserve draw argued that the alternative would be deeper cuts to services or a larger tax increase later. The administration said the 4% property tax (if adopted) would produce roughly $1.5 million to the general fund, while reducing the trash fee from $140 to $115 would lower expected solid-waste revenue and require a smaller reserve transfer.

The vote leaves council with a budget framework that avoids an immediate tax increase but increases pressure on future budgets to produce sustainable revenue or cuts. The council scheduled the formal budget adoption meeting for December 10.

What happens next: the council will incorporate the amendment into the budget package and continue review at the December 10 adoption meeting. Further amendments and program-level decisions were left on the table for later sessions.