Palmerton residents could see a 1-mill increase in their municipal tax rates next year.

Borough Manager Donna McGarry reviewed the 2022 spending plan with borough council last week.

If council were to raise taxes by 1 mill, it would increase the millage rate from 12.77 to 13.77 mills.

McGarry explained that the borough realized a significant increase in police overtime costs, which she anticipates to continue again next year.

She said she met with the borough’s fire chief to establish a long-range plan for replacement of fire vehicles, as the capital projects fund will be the area the borough sets aside money for these future purposes, as well as some other capital purchases (such as trucks for the Streets Department) it may face in the future.

“I’d like to establish a capital projects fund where we start putting money (aside) every year,” McGarry said.

McGarry said the borough also saw a nearly $50,000 increase in its pension obligation for next year, and have worked those costs into the 2022 budget without a tax increase over the 0.5 that will be part of the transfer to the capital program.

She said a half-mill would go into the debt fund to finance the firetruck loan, while a half-mill would go into the general fund with the intention of starting annual transfers into a capital projects fund for future equipment purchases.

However, McGarry said there will be no increase in the sewer, water or trash rates.

McGarry estimated that a 1-mill increase would result in about a $2 per month increase for the smaller homes in the borough, and about a $7 per month increase for the larger/newer homes in the borough.

“Nobody likes to increase taxes,” she said. “But if you look at it that way, it’s a little bit more palatable.”

Councilwoman Holly Hausman-Sell lauded McGarry for the manner in which she pieced together next year’s spending plan.

“You were very thorough with everything,” Hausman-Sell said. “Thank you for your hard work in preparing the budget.”

Councilman Kris Hoffner also praised McGarry for her forward thinking with regard to the capital reserve, as well as planning for the future.

“I commend you for that,” Hoffner said.

Council plans to look at the 2022 budget when it meets on Dec. 2.

Final adoption of next year’s budget is slated for Dec. 16.

In December, council unanimously adopted this year’s budget with a 1-mill increase in the municipal tax rate.

That raised the millage rate from 11.77 to 12.77 mills, which meant the average homeowner saw an increase of about $4 to $6 per month.

There was no increase in water, sewer or trash rates.