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York City Mayor Michael Helfrich on Tuesday called for state-level reform to combat mounting health care and pension costs that have crippled the city's budget for years.

Helfrich's plea came during the city's first 2020 budget hearing on Tuesday, Nov. 12, after introducing a proposed $110.9 million budget. The city expected to take $6 million from its strained reserves to prevent tax increases.

Last year's budget was roughly $108 million.

"This system is broken," Helfrich said. "It has been broken for a long time. ... We need pension reform, health care reform and property tax reform now."

More: York City schedules budget hearings for next week

Since 2006, when the last assessment of the city's properties occurred, taxable property value has decreased by 3% while general fund expenses skyrocketed by nearly 60%.

The city's taxable property value was $997 million in 2006; it now sits at roughly $994 million.

General fund expenses, including pension and health care costs, have jumped from $31.4 million to $49.8 million during that same time period. The city's unfunded pension liabilities are roughly $73.8 million.

Perhaps the only good news to come from Tuesday's budget hearing was that the city's anticipated expenditures in its 2019 budget fell by $2 million, saving the city from having to dip into its reserves to cover what could have been a $2 million shortfall.

However, the city now expects to pull three times that amount out of its reserves to avoid a tax increase in 2020.

"This cannot be done again next year, as we face a $3 million increase in pension obligations and continue to see these increased health and insurance costs," Helfrich said.

The upcoming year's expenditure increases partially stem from changes recommended by state Auditor General Eugene DePasquale in October. 

DePasquale's audit revealed that under the previous administration, the city increased its earned income tax  — which was supposed to go toward covering the pensions but went into the city’s general fund instead.

The city now has to cough up an extra $1.8 million annually to make up for the misdirection of funds indefinitely.

Additional budget hearings were scheduled for 6 p.m. Wednesday and Thursday in the York City Council chambers.

— Logan Hullinger can be reached at lhullinger@yorkdispatch.com or via Twitter at @LoganHullYD.

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