A Philadelphia-based financial management firm analyzing Williamsport finances says while it projects at least a $3 million up to $4.6 million 2026 budget deficit it is not predicting the years ahead.

Instead, Public Financial Management is reviewing the city fiscal books and interviewing staff and using tools in its kit done for other cities to see where the “structural imbalances are located.”

The deficit in 2026 could be $3 million or closer to $4.6 million if nothing were to be done, or no action taken, according to the firm.

As part of a strategic financial management plan through the state Department of Community and Economic Development (DCED), 90 % of the $124,000 analysis is covered by the DCED, PFM will help the city administration and council to find ways to “shrink the projected budget shortfall down to a manageable number.”

PFM presented an initial report in July, then entered into discussions with department heads and is expecting to return in mid-September with recommendations.

The report included a baseline projection starting with this year’s budget and looking ahead through 2030.

Lieke Janssen, of PFM, revealed charts showing projected revenue and expenditures.

It started with a $4.6 million budget deficit in red that grew to $6.4 million in 2030.

The biggest chunk of revenue is from real estate taxes, she said.

The analysis projected real estate revenue will remain relatively flat.

The taxes are the majority of what drives the budget in the city.

Real estate taxes are levied on the assessed value of land and buildings and the gross assessed values have been going down over time.

The only time the revenue for the city goes up is when it increases the tax millage rates, Janssen said.

Based on that assumption, “if we don’t change the tax millage rate the revenue will not go up.”

In fact, it would go down because it’s an assumption on the gross assessed values, which are declining.

The city no longer has the American Rescue Plan Act influx to bump up the growth, which it did in the last five years, Janssen said.

The chart discussed the earned income tax and business privilege tax revenue.

There have been strong efforts from the tax office to collect these from delinquent accounts in the past five years, she noted.

Earned income tax is another form of revenue. It is driven by household income and net profits of residents.

The estimate on earned income tax showed a 3% a growth.

It is estimated to be about the same rate as household income.