Lowman S. Henry Chairman / CEO Robert W. Keibler Vice Chairman Jane R. Gordon Secretary/Treasurer Albert Paschall Managing Director / COO Board Members Dr. Jake Haulk LeGree S. Daniels U.S. Postal Governor Joseph Geiger PA Assoc. of Non Profit Organizations Hilary Holste PPG Industries Charles L. Huston, III Huston Foundation Doris O'Donnell Allegheny Foundation James Paynard James Trammell Sun Company, Inc. __________ Focus Group Moderator Charles L. Kennedy Penn State University __________ Carol L. Henry Editor

FOR RELEASE SUNDAY - October 8, 2001 FOR MORE INFORMATION CONTACT: ALBERT PASCHALL MANAGING DIRECTOR THE LINCOLN INSTITUTE OF PUBLIC OPINION RESEARCH, INC., SOUTHEASTERN OFFICE 610-265-0757 lincolnpa@aol.com Pennsylvania's Boroughs: Aging Infrastructure and Low Commercial Tax Base Dominant Problems in the State's Small towns Trend Toward local Tax Reform Remains Strong      {Harrisburg - 08 October 2001} The Lincoln Institute of Public Opinion Research, in cooperation with The Pennsylvania Association of Boroughs and the Commonwealth Foundation has completed phase two of it’s Valley Forge Project, a survey of Pennsylvania’s small town officials.  Last year the Institute conducted a survey of township officials with the state’s county commissioners scheduled for phase three next year.      “The concept,” according to The Lincoln Institute’s managing director Albert Paschall, “is to survey governments on the grass roots level and attempt to draw trends and contrasts as they react to larger government institutions and various mandated regulations and economic trends.”      There are 966 boroughs incorporated in the state.  Historically a preponderance of them grew out of access to rivers during the Colonial era and later railways with the rise of American industry.  Many feature the incorporated designs of density housing near work sites and transportation with well-defined commercial districts often along waterways.  In some cases, like Conshohocken in Montgomery County and Coatesville in Chester County, these towns are experiencing an extraordinary re-development trend, in part as a response to anti-development sentiment in surrounding townships.  But for the most part the state’s small towns face a number of dilemmas that are reflected in the survey’s outcomes.      According to the 1999 Pennsylvania manual the present type of borough government is the weak mayor form which governed all incorporated municipalities in the 19th century.  Most of Pennsylvania’s present cities were boroughs first and became cities as their populations increased.  Boroughs have a strong and dominant council, a weak executive and other elected officers with power independent of the council.  In more than two hundred boroughs in Pennsylvania the chief administrative officer is a manager appointed by the council.      Of the survey respondents 94% represented towns with a population of less than 10,000 people and 45% had budgets

under $500,000.  1/5 of the borough’s spent between $500,000 and $1 million in fiscal 2001 with 23% reporting budgets of $1 - $3 million.  While in last year’s survey of township officials only 1% of the respondents had budgets over $5 million, 6% of the state’s boroughs have operating budgets over the $5 million mark.
     The political mix in the boroughs is somewhat more even than in the township structure.  While townships were running 2 to 1 Republican majorities, in the state’s small towns Republicans only led Democrats by a 46% to 42% margin with a 4% independent registration among borough officials.  However like their township colleagues there doesn’t seem to be any borough officials getting wealthy from their public service, 53% earned under $10,000 a year for their efforts and overall 38% earned under $5,000 a year.
     There are transparent corollaries in the boroughs’ responses to the biggest problems facing them.  Low commercial tax base and aging infrastructure scored evenly at 36% as the top problems for these local governments.
     The interaction of the two numbers evenly spread is reflective of the cycle of frustration that these older towns face as traditional manufacturing industries that once dominated them leave while inadequate tax codes fail to raise enough funds to capitalize technological infrastructure and facility improvement to attract new industries.  Unemployment at 7%; affordable housing at 3% and crime at 2% ranked next on the priority list of concerns expressed by the boroughs.
     Generally the majority are comfortable with their tax base with 52% calling their revenue structure steady, 7% claim it is growing while 35% of Pennsylvania’s small towns facing declining tax bases.  55% of the boroughs placed bringing new business and creating jobs their highest priority.  29% are hoping for a re-birth of manufacturing in their towns, 30% are hoping to attract the new technology and service companies, 25% would like to see more retailing in town and 13% are out to capture tourist dollars to boost their tax base. 
     While 61% of the respondents do not have active historical societies 66% of them have moved forward with tomorrow’s technology and have Internet access for the borough.  58% of the boroughs that responded use the World Wide Web to conduct business.  28% of the borough officials that responded were not sure what priority historical preservation played in the scheme of managing the town, while 40% said that historical preservation is not a priority and 30% were hoping to parlay historic preservation into a high priority.  Only about 1/4^th of the respondents placed new residential housing as a priority and 64% did not place a high priority on new housing.  Just about the same number, 63%, say that new affordable housing is not a high priority. 
     With a 1/3^rd of the boroughs facing declining tax bases they are aggressive in seeking outside support.  Fully 79% of the small towns received grants in the last fiscal year.  31% received outside funding for recreation that may be a reflection of the Ridge Administration priority funding for parks.
     22% of the boroughs put grant money into infrastructure, 13% bolstered law enforcement funding and 10% funded better roads and highway improvements.  Downtown beautification and historical preservation were split at 6% in grant funding and likely to be reflective of some of the Clinton era funding that was available to small towns and cities.
     The state’s widely touted Keystone Opportunity Zones for boroughs and cities aren’t making much headway in the boroughs that responded to the Lincoln Institute survey.  84% of the towns that responded still don’t have a special zone with tax breaks for new business development and of the 11% that did have one or more the jury is largely still out.  48% had no opinion of the concept with 16% evenly split on the question of whether these designations were very successful or unsuccessful.  59% of the boroughs directly fund recreation programs and the officials that responded are generally happy with the level of funding.  38% say their funding of recreation is about right and another 28% say it is proportionate to other borough budget items. 
     26% though say that recreation funding is too low compared to other budget items and 8% feel that recreation is disproportionately high in the their towns.  While 16% aren’t sure if Harrisburg is fair to the boroughs, 45% feel that the state capital treats them fairly while 39% don’t believe that Harrisburg treats Pennsylvania’s small towns equitably.
     The boroughs are responding to state and federal pressure for more inter-municipal cooperation than the counterparts in the state’s townships.  72% of boroughs responding have inter-municipal agreements and 14-point lead over townships surveyed last year.  While 37% of townships did not have any inter-municipal agreements only 24% of the states’ small towns did not have one or more inter-municipal agreements or authorities.  While 73% of Pennsylvania’s borough officials’ favor inter-municipal agreements or authorities and only 7% oppose them, 17% of Pennsylvania’s township officials opposed reducing their sovereignty.  Clearly agreements on inter-municipal police protection are high on the boroughs’ list.  43% responded that police protection was a priority in working with other municipalities.  Wastewater treatment was number two for both boroughs and townships but with contrasting penetration.  21% of boroughs place a high priority on inter-municipal sewer authorities while 31% of the townships put wastewater treatment as number two on the cooperation scale.  And while there has been extraordinary emphasis on inter-municipal zoning and planning in townships, primarily in the southeastern and south central areas of the state, boroughs and townships were virtually tied at 22% and 21% respectively on the need for inter-municipal planning and zoning in their communities.
     One trend and one priority becomes very clear in all of Pennsylvania’s smaller institutions of government - the demand for local tax reform.  57% of Pennsylvania’s borough officials want options to lower property taxes.  A concept favored by 64% of the state’s township officials.  63% of the boroughs and 64% of the townships want the ability to impose or raise earned income taxes with the same virtual trend in sales and mercantile taxes. 
     While business privilege taxes enjoy a 6-point lead in popularity at 14% over the townships demands.  And like their colleagues in townships strongly oppose at 58% county government taking over local land use planning and zoning.  Given the opportunity to have only priority funded in their boroughs, roads and wastewater treatment would be on top of the list.  Affordable housing and police protection would get equal funding with parks, recreation and emergency fire and rescue services sharing the rest of the funding. 
     While 56% of the borough officials have increased spending during their terms in office only 37% increased residential tax bills and only 22% saw the need to increase business tax bills during their terms of public service.
     The Lincoln Institute of Public Opinion Research’s 2001 Pennsylvania Borough Officials survey was mailed to 2,000 borough officials from a list supplied by the Pennsylvania Association of Boroughs.  It was mailed on September 4, 2001 and by the response deadline of September 25, 2001, 280 responses had been received.  The 2001 Pennsylvania Borough Officials survey was made possible with the support of the Verizon Foundation.