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| Glenn Walbert |
A recently-formed Allentown Neighborhood Improvement Zone Authority (ANIZDA) can use those funds, along with the EIT from other Allentown workers, regardless of residence, to pay the projected $10.9 million annual debt service for a $158 million downtown hockey arena.
Finnigan told Supervisors that Browne has assured him it's unlikely that any EIT will be needed. "If that's what they hope, then the legislation should have been enacted without that in there," said Finnigan, adding that he is astonished that a lending institution would hand out $35 million "on a hope" that a "hole in the ground" would be profitable.
During his meeting with Senator Browne, Finnigan was also told there would be projects within the NIZ for the Allentown Brew Works and Cosmopolitan Restaurant.
The Fegley family, which owns and operates the Brew Works, contributed $2,100 to Allentown Mayor Ed Pawlowski's campaign last year.
Bill Grube, co-owner of the Cosmopolitan and board member of ANIZDA, donated another $3,500. On his December 13, 2011 application for appointment to ANIZDA, Grube denied he would have any conflict of interest. Before his appointment on February 1, Grube told Allentown City Council, "I have no dog in this hunt other than to rebuild the City."
Finnigan finally told Supervisors that Senator Browne asked municipal managers to support and endorse the Allentown project.
Hanover's Supervisors instead condemned it.
John Diacogiannis, who chairs the board, stated he has no problem with helping support the revitalization of another community, but does have a problem with "benefiting individual entrepreneurs." Referring to the EIT tax grab as a "scheme," he took exception to the way Allentown "ran roughshod" over outlying communities. "I just think it was plain wrong," he complained.
"If the state wanted to commit their money to it, fine. But why'd they have to commit ours?" asked Supervisor Glenn Walbert, who wants to know how the annual $10.9 million in debt service will be realized. Noting that the annual EIT from outlying communities and Allentown would total around $1 million, Walbert stated that the 3% state income tax would only be about $3 million. "Where does the other 6 million come from?" he asked, noting that revenue from sales tax would be insufficient.
Finnigan replied that Allentown DCED Director Sara Hailstone told him the money would come from add-ons to hockey tickets and cover charges.
Worried that bonds will be sold before anyone has time to react, Walbert suggested that the tax collection committees might consider a NIZ challenge, but Finnigan answered that there are no resources. "Something has to be done soon in fairness to future bondholders," stated Walbert. "We owe it to ourselves to have Mr. Broughal look into it."
Agreeing with Walbert, Supervisor Steve Salvesen argued the EIT tax grab violates the state constitution. "I don't see how they can appropriate another municipality's money for a purpose outside that municipality," he reasoned. If they can do that, they can do real estate tax or anything else with impunity."
"Do we fight this?" Salvesen asked.
Walbert then made a motion, seconded by Salvesen, authorizing Solicitor Jim Broughal to research the Township's options, including litigation, and to hire outside counsel, if necessary. It passed unanimously.
Supervisors will meet again on Tuesday, March 13, 7 PM, at the Municipal Building located at 3630 Jacksonville Road.
25 comments:
Remember folks that the the State giveth and taketh away. The local towns are creatures of the state. Ask any lawyer. If the state wanted to disovlve them tomorrow they could. Hoping this township doesn't spend a lot of money looking into something they would have little chance winning. This seems to somehow fall into the you can't fight city hall slogan with the you being the town and the city being the state.
Hanover Township, Northampton County. Home of the entitled and self-impressed.
Allentown, Lehigh County. Home to covetous bilge who ran their city into the ground and want others to clean up their toxic dump.
Can we borrow these Commissioners from Hanover Township to replace Allentown City Council? These intelligent and competent indivduals are asking questions that the bobbing heads never even considered when they rubber stamped every single aspect of the Arena project.
I agree with anonymous 7:00 AM. Like I said on Donovan's blog, anyone with a calculator can plainly see that the NIZ scheme is destined to fail. There is no possible way to service this debt! Take a good long look around Harrisburg today, and you will see what happens when a city really and truly goes broke. NOT PRETTY.
So tired about hearing about the EIT grab..What about the fact that Easton was able to grab a half a million a year of table games casino money that should have gone to the county..Our legislative darlings from the area allowed this thievery to happen right before their very eyes..What did the County do about this?? Nothing! Maybe they should take some notes from the Hanover Township gang..
Go for it Hanover, you will not have to go it alone there will be plenty others of us out here they will join the parade. I agree with Jay if they will not need the money as Browne stated why did they write it into the legislation. This whole thing smells!!!! BAD!!!!!
When lawsuits are piling up you are doing it wrong.
Retired ASD teacher.
I congratulate the leaders of Hanover Township for their courage in challenging what appears to be a confiscation of its citizens' investment in their OWN neighborhood. I trust my township (Lower Saucon) and others join in the suit.
Apparently, Senator Browne and others have pledged the property of others as collateral for loans that can only be described as speculative. The investors receive a guarantee of repayment, the taxpayers, an unwritten promise made by politicians.
I've stated before, if Allentown's leaders want to risk the tax payments of Allentown's citizens, that's their call. The city should prosper, or fail, at the judgment of its own elected officials.
The current legislation opens up far-reaching possibilities for abuse by Allentown and other municipalities who hope to enrich their communities on the backs of unwilling guarantors.
Keep our monies out of your risk-taking, particularly non-essential projects like arena building and construction projects by campaign contributors.
Bernie,
Could you explain why we even have an EIT in the State of PA? Correct me if I'm wrong, but wasn't the EIT set up to take $$ from the urban areas and redistribute these monies to the rural, now suburban areas? Wasn't this a form of redistributing the wealth?
If this is the case, why is it so bad 37 years later to move some of these tax dollars back into the cities, now that a large amount of wealth has been redistributed?
Also, seems to me that it would be much more efficient to get rid of the EIT and increase the state income tax by the same amount (for a net increase of $0) and distribute those $$s from the State level. By doing this we would have a lower cost of collecting the taxes (no Berkheimer collecting fees) and a more efficient way of distributing the $$ to where they need to be.
Every municipality in the Lehigh Valley should consider joing in Hanover's court challenge. If you don't, Browne will divert your monet somewhere else again!
Go Hanover!
Every thing gets emotional about taxes.
Just looking a some numbers may be usesful in the discussion.
Total EIT in the two county area is about $175 million. The amount of EIT in the NIZ seems to be about a half a % of the total. No tax is within a half % of being accurate and appropriately allocated.
The real estate reassessment is a bigger issue. The missallocations over the last 21 years are in the tens of millions. No one seems to care that Allentown paid a lot ($20million+) of county taxes that should have been paid by the townships.Are the townships going to chip in to fix that error?
Any income tax - federal, state or local - belongs to a person's residence. There is a separate tax to pay for the municipal services impact of a person who works in another municipality.
There is a separate suit being considered over the Phila Super Credit. I'll have more about that soon.
The municipalities whose residents approved increased EIT to fund open space should be the first in line to file lawsuits. I'd never accept a verbal promoise from a politician like Pat Browne that the NIZ will not need the money and it will be returned! Ha! Ed Pawlowski allow money to be returned? Senator Browne insulting the intelligence of true public "servents" (Township Commissioners).
Anon 8:50 AM.
Personally, I think Gaming was a regional investment. Look at the $10M's in our tax dollars that was invested in that property. Funding diverted from other brownfields and transportation projects. Why shouldn't we all share the benefits? It is a huge sum of money.
Boscola and Browne should re-write the gaming legislation so that 60% of all proceed stay local just like Corbetts Marcellus Impact fee. It would out perform the NIZ and every community could benefit.
I would like to know how much of Lehigh County share went back to West Bethlehem and Allentown.
Look how the arena project has mushroomed already. If there is a crumb in the cookie jar, they will find it. The will spend every penny they can.
No commentary from Future Downtown Arena Attendee?
Shocking!
I nominate Comrade Anon 6:18 for Greatest Blog Comment Ever.
Quit your bitching, stop your moaning and lose the bellyaching once and for all.
Pick up that phone and order Phantoms tickets NOW.
Shaibu!
VIKTOR TIKHONOV
In the end, it's the lawyers who profit from the stupid lawmakers...
I'm not certain I understand your edit. I appreciate your letting the post stand, however. While harsh in tone, it speaks precisely to the herd of elephants in the room.
Everybody is suddenly concerned about their tax money. Rightfully so. To your credit, however, your earlier dispatches re: the NIZ were spot on about the displacement of primarily ethnic minority businesses. Why isn't this being discussed out loud now? This is ethnic cleansing for the benefit of wealthy white business people and white fans of a very white sport. It's easy to spout the David Duke's of the world. The more sinister and subtle racists, like Pawlowski and the Brownes, are more difficult to detect.
I removed three pejorative terms, although I sometimes use them myself to make the same point you make. I understand where you are coming from, but know from past experience that many of my readers are offended by those terms. I might have been wrong to edit you.
Can anyone point out to me exactly what provision of the PA constitution the NIZ violates. The EIT is created by statute and it can be modified by statute. At least the lawyers win.
"Whitest of all white sports"
Say, Anon 9:25 ... I hate the $ 160.0 million dollar PALACE OF SPORT just as much as the next guy, if not more.
I never really cared what percentage of white players make up the National Basketball Association ... until I read your thought-provoking comments.
Now, I am very curious to know what sort of label you would attach to the sport of basketball.
Congratulations?
Enjoy your posts, ironpigpen. The NBA (big fan, btw) is a very black sport. I think close to 70% black. It's ticket prices (until the bad PR and plummeting prices of the post-lockout) made it unaffordable to most of those of median US black household income. It's attending fans are largely white. To my knowledge, nobody is ethnically cleansing a neigborhood to promote an NBA franchise, however.
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