BETHLEHEM, Pa. — A proposed $112.49 million city budget for 2025 would keep real estate taxes where they are, buy eight new police cars and more than double the fire department’s new-recruit training budget.
But more broadly, Bethlehem’s financial outlook will continue looking up as long as the city keeps its promises to its employees regarding benefits, “aggressively” makes payments on debt and passes responsible budgets, Mayor J. William Reynolds said.
“Bethlehem’s story is as much about how private investment is wanting to come into the city as it is people within City Hall doing their job," Reynolds told an audience gathered for his budget address Monday in Moravian University’s Foy Concert Hall.
"One can’t happen without the other.”
“Bethlehem’s story is as much about how private investment is wanting to come into the city as it is people within City Hall doing their job — one can’t happen without the other."Bethlehem Mayor J. William Reynolds
Holding the line under the proposed budget, real estate tax would remain at 19.64 mills in the Northampton County area of Bethlehem and 6.21 mills in the Lehigh County portion.
That means the owner of a home with a $200,000 tax assessment would pay $3,928 in property tax in the Northampton County section and $1,248 in the Lehigh County area.
The city's real estate tax rate rose 2.6% under last year's budget — the first real estate tax hike since 2021, when it went up 5%.
Budget highlights
Other highlights from the balanced budget and financial outlook include:
- The city’s three pension funds are more than 90% funded, with respective employee obligations up $1.9 million based on market movements from previous years
- $8 million budgeted for the city’s medical benefits general fund. According to the mayor's presentation, “The city will always keep our salary, pension and healthcare obligations”
- More than $35 million in real estate taxes and $11.9 million in earned income tax is projected — both up from $34.29 million and $10.75 million from the previous year
- Assorted business development revenue growth of $600,000
- General fund revenues mostly come from real estate taxes (31.2%), grants and gifts (24.6%), Act 511 taxes (16.8%)
- General fund expenditures are carried mostly by the police, city Community and Economic Development and fire departments
- Annual debt service to hit zero come 2035
- AA- Stable bond rating, with Reynolds saying that tops other Top 10-population cities statewide
Tax money in action
This time last year, Reynolds proposed the budget to include a 2.6% property tax hike to cover the cost of hiring four new paramedics. City Council later adopted an associated budget feature that increase.
And as the administration expected, that extra money has gone to good use so far, Reynolds said.
For 2024, the EMS department is on track to exclusively respond to over 400 more calls than the year prior.
That trend means fewer cases of the city having to lean on mutual aid from outside agencies.
Facing down debt
What once was more than $170 million in debt facing the city after the closing of Bethlehem Steel and a decline in related investment will be down to $88 million after next year’s debt service is paid, Reynolds said.
“We don’t move problems, we solve problems."Bethlehem Mayor J. William Reynolds
In terms of debt reduction, that's more than $82 million paid from 2015-25 and nearly $115 million come 2028.
Reynolds' team will have worked to address almost $44 million of that total by the end of 2025. He first took office in 2022.
“We don’t move problems, we solve problems,” Reynolds said.
