Annually, Dover Township passes a balanced budget. The Budget consists of several major funds and several minor funds. The Major Funds are General Fund; Liquid Fuels Fund; Sewer Fund; and Water Fund. The Minor Funds are Recreation Fund; Fire Tax Fund; Recreation In Lieu of Fund; and several Bond Funds which are used to fund specific projects until all bond proceeds are fully expended. These borrowed funds are then paid back through expenditure line items based on the purpose for which they were funded through the corresponding Major Fund.
Every year our January newsletter features an article about what projects and equipment the Township is funding as expenditures through these Major and Minor sources of money. However, rarely do we talk about the revenues that fund these projects. What are they and where do they come from?
The 2025 General Fund Budget is projected to be $9,257,577. The revenues received by the General Fund come from taxes, building permits, licenses, rents, fines and forfeitures, interest income, and grant programs. They are used to fund the following departments: Police, Highway, Stormwater, Parks and Facilities, Recreation Programming and Events, Planning and Code Enforcement Functions and Administration. The largest source of revenue for the Township General Fund is taxes. These taxes include the Earned Income Tax, Real Estate Tax, Realty Transfer Tax, Mercantile/Business Privilege Tax and Local Services Tax.
33% of General Fund Operations are funded by the Earned Income Tax (EIT). This is the tax that every resident of Dover Township pays through a payroll deduction. The Township will be receiving about $3.1 million from this tax source in 2025. The payroll deduction that is on your check is 1.4 percent. The Township only receives half of a percent (.5) with the remaining .9 percent going to the Dover Area School District. It is interesting to note that EIT, not Real Estate, is presently the largest tax revenue source for the General Fund.
The next largest tax revenue source at 18% is the Real Estate Tax. In 2025 this is projected to be $1.9 million, although 1.7 million will be utilized for General Fund purposes. In 2025, property owners will see their Real Estate Tax increase by .3 mils to 1.6 mils. This increase will result in a $30 increase on a $100,000 assessed property. The property tax is split between the General Fund and the Fire Tax Fund. The additional tax funding will be used to continue forward with our 5 Year Capital Improvements Plan and to save for Fire Apparatus replacements. Dover Township, under the Second-Class Code, is permitted to raise taxes up to 14 mills for general tax purposes.
The Fire Tax Fund will receive $200,000 of the real estate tax collected. This is used to support our local volunteer fire company with equipment maintenance, fuel, insurance, supplies, minor equipment, fire prevention resources, and other administrative items. This is the first increase to the millage amount allotted to the Fire Tax Fund in over 20 years. In addition to these funds, the Dover Township Volunteer Fire Department is housed in the Dover Township Community Building where funding of utilities and maintenance of the facility are the Township’s responsibility. We also own several pieces of fire apparatus.
The Township also receives Real Estate Transfer Taxes. These funds come from the sale of properties within Dover Township. The Township will receive about $602,000 in 2025. Because of our steady growth over the last few years, these revenues are driven mostly by the sale of new homes rather than by existing home sales.
Dover Township also collects a Mercantile/Business Privilege Tax. This is a unique tax that can no longer be instituted by local municipalities. The Township can also not increase the rate of this tax. The income from this tax comes from businesses. As new businesses locate in the Township or current businesses grow so does the income from this tax. The Township anticipates receiving about $505,000 in 2025.
The final tax that the Township collects is the Local Services Tax. This tax is paid by everyone that works within the boundaries of Dover Township. We will collect about $138,000 in 2025. As new employers locate here, we can anticipate growth in this tax.
These five taxing options make up approximately 65% of the General Fund’s revenues with the remainder coming from permits, licenses, rents, fines and forfeitures, interest income and grant programs as noted above. As our community continues to plan for service and capital improvement needs into the future, it is important to note that many of these revenues will likely be subject to growth in revenue whether through new development, redevelopment or increases to the rates at which revenue is collected.
The Township’s other Major Funds are not subject to as many revenue possibilities. The primary source of Liquid Fuels funds come through the state of Pennsylvania to our community from the proceeds of the gas tax to be used to fund snowplowing, highway equipment, road and stormwater work. Similarly, the Sewer and Water Fund receive the bulk of their revenues from user fees paid quarterly to be used to provide service and improve infrastructure. Our Sewer Fund receives funding from Dover, Conewago, Manchester and West Manchester Township residents, as our Wastewater Treatment Plant is considered a regional facility. Our Water customers will see a 9% increase in 2025 to continue forward with capital improvements that include addressing new EPA standards for PFAS removal at each of our wells.
The Township’s Minor Funds are considered so because they do not usually have millions of dollars available to them. The Recreation Fund receives approximately $60,000 from the General Fund to use towards programming and events but obtains the rest of its revenues from participants or sponsors in our programs and events. The Recreation in Lieu of Fund yields its revenue from each new home sold in the Township which are paid by the developer to be used toward new parks and/or improvements at the existing parks.
In summary, it is our hope that this information will help our taxpayers and customers to understand how we fund our operations and capital improvements. Providing the community with quality services and replacing aging infrastructure for the betterment of the health, safety and welfare of everyone who lives here is our ultimate purpose and a commitment that the Township Supervisors and Staff will continue to work diligently at in the most cost-effective manner possible.