Lower Merion property owners face a third straight real estate tax increase after Township Manager Ernie McNeely told commissioners that preliminary 2027 budget figures show rising costs the township cannot absorb.

McNeely laid out the pressure points in a Sept. 4 memorandum to the Board of Commissioners ahead of the Sept. 9 budget workshop. The township raised its tax rate 6.5 percent for 2025 and 8 percent for 2026, ending more than a decade of holding the rate flat, Patch reported.

McNeely wrote in the memo that "there will again be pressure for a tax rate increase."

Three cost drivers dominate the outlook. Health insurance premiums jumped 19.9 percent for 2026 after a spike in claims. Even with that increase, the township's 2026 healthcare spending is running about 12 percent above projections, signaling another double-digit premium hike in 2027.

Severe winter and summer storms pushed emergency response costs $1.2 million over budget. The police department is also requesting a new Axon drone-as-first-responder program at $75,000 a year for five years, or $375,000 total.

The township's five-year financial forecast, presented to the Finance Committee on July 29, projects a $6.2 million General Fund deficit for 2027 without a tax increase. That would cut the fund balance to $15 million, or 17.3 percent of expenditures. Without any rate increase through 2030, the fund balance is projected to go negative by 2029.

A business tax spike helped narrow the 2026 deficit. Business and mercantile tax revenue came in at $21.45 million, $3.35 million above the $18.1 million budget. McNeely cautioned in his memo that the spike cannot be counted on to repeat.

The township is also negotiating contracts with its two unions, adding uncertainty to 2027 personnel costs. Pension costs alone are expected to rise at least $300,000 over 2026 levels. The new Ardmore Avenue Community Center, expected to open in 2027, will add operating expenses including utilities, janitorial services and recreation staff.

No specific tax rate has been proposed. The figures to be presented Sept. 9 are department-level requests, not a complete budget.

McNeely's formal proposed budget is scheduled for distribution on Nov. 6. Public hearings are set for Nov. 18 and Dec. 2, with adoption scheduled for Dec. 16.

Residents can attend the Sept. 9 workshop at 6 p.m. in the second-floor board room at 75 E. Lancaster Ave. in Ardmore, or join via Zoom by emailing [email protected] before noon.