Lower Makefield board hears CFO: $4.5M year‑end shortfall, weighs millage, reclassification and earned‑income tax

Megha Bhandari, Lower Makefield Township chief financial officer, told the board July 15 that the township is on track through the second quarter but faces a structural gap that will leave the general fund approximately $4.5 million short by year end under current assumptions.

"By the year end, expenses are projected to exceed revenues by approximately 4,500,000," Bhandari said, noting timing differences in revenue and expenditures and that planned one‑time transfers were already included in the 2026 budget.

Bhandari reviewed four broad options to address the shortfall: transfer $2.4 million from the sewer fund (temporary relief), seek court approval to raise the millage cap to 19 mills (estimated to generate roughly $2.755 million annually), pursue reclassification to a first‑class township to allow up to 30 mills (which the presentation estimated could generate about $8.74 million annually), or introduce a 1 percent earned income tax (EIT) while lowering property millage — an option the presentation projected would produce the largest, most sustainable revenue stream.

She emphasized the tradeoffs and timeline for each option, including that increasing to 19 mills requires court approval, while reclassification or an EIT would require a referendum and public education. On potential impacts, Bhandari said the illustrative 19‑mill increase would add about $223 per year for the average homeowner; reclassification to 30 mills or EIT scenarios would have larger effects on typical tax bills, and she provided example household calculations during her slides.

Board members questioned details and asked staff to supply comparison tables and alternative scenarios. Supervisors asked staff to run a half‑percent EIT scenario and to show net impacts after school‑district or inter‑municipal sharing effects are applied.

The board directed township staff to draft a letter to the township's state senator and representative and to the full Bucks County delegation urging legislative attention to municipal millage caps and reassessment policy and asked staff to return with supplemental slides and options ahead of a budget workshop scheduled for September.

The CFO cautioned that transfers from enterprise or restricted funds would only delay the problem and that long‑term structural solutions will be needed to maintain a positive fund balance beyond 2027.

What happens next: staff will produce comparative scenarios, share the missing slides and tables referenced during the presentation, draft the legislative outreach letter for board review, and prepare materials for a September budget workshop.