The Jim Thorpe Borough Council, at a regularly scheduled meeting Thursday night, adopted its 2011 budget.

The budget was originally expected to see a 1 mill property tax increase, but Borough Manager Wes Johnson challenged himself over the last month to whittle expenses down to a more palatable level for taxpayers.

The result is a very tight budget that requires only half a mill increase and produces a $71 surplus in place of a possible $128,000 shortfall, in part due to the expected revenues of the newly adopted amusement, occupational, and local services taxes.

The 0.5 mill increase amounts to a roughly $40 property tax increase per person, at a $50,000 home assessment, about the average in the borough.

While any tax increase may seem unpalatable when taxpayers budgets are already strained, but Johnson felt that the tax measures enacted by the council last night and at a special meeting two weeks ago were crucial to keep the borough on a sound fiscal footing both this and upcoming years.

"The problem is only going to get worse in the years to come because our expenses in general, with the employee agreements and the costs of all our items going up," Johnson explained. "We're just delaying the pain if we don't enact some increase now."

The council's 4 to 3 vote for the adoption of the general fund reflected the opposition to the property tax increase. Voting against the motion were council members Joanne Klitsch, Gregory Strubinger and Justin Yaich.

"If we said to you, 'we don't want any property tax increases,' what would be the avenue to make the borough run next year," Yaich asked Johnson directly.

Johnson responded that there would be less public service projects and he estimated that 80-85 percent is personnel costs and not discretionary spending.

He also noted that the general fund is the only portion of the budget effected by property taxes, an accounting fact that allowed the other portions of the budget to pass with unanimous consent.

The council adopted the 0.5 mill increase putting property taxes at 6.9 mills, an occupational tax of 0.0055 percent, a per capita tax of $5, a local services tax of $25, of which $5 will be shared with the school district, an earned income tax of one percent, half of which will be shared with the school district, and a realty transfer tax of one percent.

The general funds budget shows total receipts of $1,583,710 and total expenses of $1,583,639, accounting for the $71 surplus.

The Asa Packer budget plans for total receipts to equal total expenses of $11,889.

There will be no increase in water rates from that of last year, $35.19 per month. The sewer budget expenses and receipts balance at $1,033,108.

There will be a 10 percent increase in water rates and the first 1,000 gallons used per month will cost $21.69. The water budget is balanced at $1,151,209.

Councilman Strubinger noted that debt in the water department, due to improvements, accounts for $7 million, and the borough is obligated to pay $500,000 each year.

Yaich added that if state required rate raises don't occur, the state could recall its loans. Theses loans carry a half percent interest rate, and having to borrow at a much higher rate to repay the recalled loans would cause a much higher water rate increase next year.

The average family uses 4,000 gallons each month, and can expect their rate to go up about $1.89.

Garbage rates will not increase and the sanitation budget is balanced at $769,851.

The liquid fuels budget is balanced at $116,445.

The Memorial Hall budget is balanced at $194,238.