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Friday, January 27, 2012

Most LV Legislators Blindsided By Allentown Tax Grab

"Senator Pat Browne won't be getting any Christmas cards from us this year."

That's what one local state rep. told me concerning the NIZ legislation drafted in 2009 by Senator Pat Browne, which was tucked deep inside a Fiscal Code Update. Most of them had little or no idea it was even in there, and certainly were unaware of changes in how EIT is collected.

Browne is reportedly meeting with LV state representatives next week.

But one State Rep. who did know, at least about the NIZ, is Julie Harhart. She actually voted against this legislation in 2009, which is contrary to what I told you earlier this week.

"The vote on House Bill 1614 (Act 50 of 2009) which you are referring to was a procedural vote," ahe explains. "The vote that counts was the final passage vote on House Bill 1614 and on that vote I voted no." (Emphasis added).

According to Harhart, the NIZ was slipped into the bill, when it came back from the Senate to the House for concurrence.  "That is when the language was inserted," she explains.

The sole LV Republican who supported this Fiscal Code update was Karen Beyer. All LV Democrats supported it, not because they even knew about the NIZ, but because they supported the budget of a Democratic Governor.

In the Senate, Lisa Boscola was opposed, while Browne supported legislation he had a hand in crafting.

When this legislation came up again, in a 2011 Fiscal Code update it was now the budget of a Republican governor. So LV Democrats naturally voted No, while LV Republicans naturally voted Yes.

In the Senate, Boscola was a Yes in what was a unanimous vote.

Why would Harhart oppose the NIZ in 2009 and support it in 2011? Although I have not spoken to her directly about this, State Rep. Marcia Hahn explains that three important changes were made to the NIZ.

First. If there are excess monies in the NIZ fund, the governing body of the zone must distribute this taxpayer money remaining money back to the State and then to the local municipalities.

Second. To insure that taxpayers receive the best possible interest rates, the Commonwealth pledge language was clarified.

Third: The bill limits the term of the bond financing to 30 years, even if they are refinanced.

While these changes certainly improve the NIZ from what it was in 2009, it still diverts EIT money. It still takes money due to other municipalities. This was done with absolutely no input from the townships, cities and boroughs directly affected. Worse, there is no analysis of the financial impact this ill have on surrounding municipalities.

"Is it $500? Is it $50,000? I don't know," explained Hanover Township Manager Jay Finnigan on Tuesday night.

36 comments:

Anonymous said...

"Why would Harhart oppose the NIZ in 2009 and support it in 2011? Although I have not spoken to her directly about this, State Rep. Marcia Hahn explains that three important changes were made to the NIZ."

BECAUSE THEY DON'T READ WHAT THEY ARE VOTING ON!!! They do what they are told to or vote party lines.

Anonymous said...

Really think you should put Harhart's no in bold. You made her look bad.

Issac Touro said...

sheep and liars all

Bernie O'Hare said...

6:43, OK.

Anonymous said...

Spare the outrage. This is our legislature and we love them. We return 98% of incumbent, career seat fillers like Freeman and Brown every time we get the chance. They are the country's worst state legislature and one of the country's largest per capita. Half of them could be sent looking for honest work and NOBODY would notice.

In the mean time, this avid sports fan will avoid Madison Square Welfare Garden like the economic plague it is.

Anonymous said...

Hmmm....Maybe it's time to take Browne out of the game.

Seamus

John.Jay said...

I'm going to make the same argument I made last night--that the individual tax burden because of this thing works out to be $1.50. It's simply not enough money to be outraged about.

But, I also want to make a second point. Which is that the money that is remitted from where one works to where on lives is not "fundamentally" the property of the residential municipalities. Their claim to that money was creates by positive law in the 1965 Local Tax Enabling Act. That money could just have easily remained with the work municipalities. If the General Assembly sees fit to change the way the money flows now, they have that choice because it is just a political choice.

Arguments can be made on both sides for why each respective municipality should keep the EIT money. This was no "theft" as some commenters have suggested and the residential municipalities have no firm right to that money in any event. It was only through the grace of the legislature that they have benefited over the last 47 years at the expense of the cities.

c said...

Sometimes it is difficult to read everything that is in a bill or a provision. There ought to be a way to make it so that anything introduced must remain focused on its intended purpose in order to minimize side effects. Our elected officials are not all attorneys and the legaleze in some of this stuff is mind boggling.

Anonymous said...

. . . and replace him with someone who will do the same thing, only to the Seamus crowd's benefit.

They are all feckless fucktards.

And, there is no stopping them. Too many who are eligle to vote
don't, too many others willing to overlook this kind of thing as long as their own union or business interest or handout is delivered.

Until we put one of them on the rack in the public square, both sides will continue to do as they please.

I'd rather, simultaneously, eat broken glass, negotiate with a used car salesman and get my prostate exam than be in the same room with any of these so called public servants.

-Clem

Anonymous said...

Jon.Jay, you're wrong. This was sleezy back room politics at its worst.

Where is your $1.50 argument when townships are losing thousands of dollars in EIT? Please don't tell me you're going the $1.50 / Lehigh Valley resident argument because you know damn well that's an inane argument.

And if Browne is right on this only being a delay in receipt, then he should have taken his testicles out of his wife's pocket and gone public with how this all works. The fact that he hid it from everyone, including fellow legislators, shows me this is a naked theft of EIT with no end in sight.

John.Jay said...

I posted the following last night (using Bernie's own numbers) and he agreed with calculation:

When the total EIT tax being withheld for the NIZ ( about $ 1 , 080 , 000 ( by Bernie ' s own calculation )) is divided among all Lehigh Valley residents not including Allentownians ( about 720 , 000 ), the individual tax burden comes to about $ 1 . 50.

See the comment thread.

http://www.blogger.com/comment.g?blogID=9299655&postID=4628914404843086625

We settled on the fact that although the individual contribution is remarkably low, its unfortunate that the townships will need some more time to crunch the numbers for their individual liability. But, that's just an accounting issue. I'm personally willing to give the downtown a chance for $1.50. Seems like the least I can do to help out.

Anonymous said...

Actually we're not settled - the number I've seen is $4.5 million in EIT withheld, and you're trying to make an argument that's not valid - the impact is not per person, it's per township. We'll know that information soon enough.

And you continue to avoid the sleazy lying and obfuscation - so why would anyone trust Browne, Pawlowski, Reilly, or anyone else connected with these lies.

So nice try diverting the discussion, won't work.

John.Jay said...

I know it is " per township " but , there are people in townships , so , you can divide the tax liability of the township by the number of people in the township to get an approximate per person liability .

The TOTAL tax remit from the NIZ will be around 4 . 5 million , you are correct . But , 3 . 5 million of this is just diverted state tax that has nothing to do with the local EIT . Leaving only about a million of withheld local EIT .

See http :// lehighvalleyramblings . blogspot . com / 2012 / 01 / allentowns - tax - grab - will - yield - at - least . html

I have actually read the acts and reviewed the legislative history and I agree that things are less than transparent . Then again , I ' m a realist and know that is how legislation actually happens and must happen in the real world if you expect to get anything done .

That being said , these guys are now being held to a higher standard . Like yesterday with the Reilly lease eviction thing . He probably would have gotten away with it , but , but because this is now a public issue , people are watching more closely and keeping feet close to the fire . That type of oversight is welcome .

Anonymous said...

What's mine is mine.

What's yours is mine.

I am Progreeisve Liberal Elite. I am smarter than you. I know better.

I also can't wait for the puck to finally drop at Chairman Pawlowski's magnificent PALACE of SPORT.

Shaibu!

VIKTOR TIKHONOV

Anonymous said...

There is entirely too much money at stake here to let a bunch of jerkoffs like Molovinsky, O'Hare and a few others stand in the way of ME making a windfall profit.

BUSINESSMAN WELL-CONNECTED TO CHAIRMAN PAWLOWKSI and the RUBBER STAMP COUNCIL of DEMOCRAT PARTY APPARATCHIKS

Anonymous said...

"...this thing works out to be $1.50. It's simply not enough money to be outraged about."

If I had $1.50 for every time someone willing to spend others' money used the "only-a-dollar-fifty" line, I wouldn't have to worry about amounts as small as $1.50.

I'll send my bill to the magnanimous John.Jay. He'll probably pay it. It's only $1.50. He thinks he owes poorly run cities something. I'm certain I don't.

Bernie O'Hare said...

For John Jay,

You reference the Tax Enabling Act of 1965 and then says that the EIT could have "just as easily remained with the work municipalities." No not really, I think if there would have been no distribution between municipalities of EIT collected, the Act wouldn't have passed.

Think about how much of a "windfall" that would have been, in 1965, for Bethlehem - 25,000 employees at Bethlehem Steel alone - or Allentown - thousands of employees at Mack Trucks and other major employment centers. You question the fundamental right of municipalities to lay claim to the EIT collected in the work municipality and then remitted to the home municipality of the employee.

That "fundamental" right is established in the enabling legislation. You seem to intimate that this is a "gift" from the legislature that can be taken away if they choose. Duhhhh! That little bit of logic is the case with any legislation.

If the legislature wants to allow Allentown, Bethlehem, and Easton to be like Philadelphia and charge commuters a tax and allow them to keep it, then the legislature can do that - it wouldn't pass, unless it was hidden inside a complicated omnibus bill with lots of moving parts and no one was told about it. Not sure what you are trying to say, that we should be happy that not more was taken away from other municipal governments and given to Allentown.

As for your low per capita arguments, see how well that worked out for Regional Public Health spending. You could take all kinds of expenditures and break them out on a per capita basis - particularly regionally - and use that as a reasonableness measure.

You're just not being honest when you do that. You are "rationalizing" not being "rational." You are "justifying" not being "just."

John.Jay said...

Yeah, i think in 1965 it would have been a windfall for the cities and that it should have been given to them. Instead we got a tax situation meant to separate where you work from where you live (for the benefit of suburban real estate developers) with all sort of accompanying inefficiencies. It was the wrong choice then for a monied special interest and it remains the wrong choice today.

John.Jay said...

And, also, there is no irrationality to showing people how their tax bill breaks down. People say all the time "why am I paying all these taxes, what does it go to." Well, maybe it would be good if we showed them how their total tax bill related to programs that they like and use. That's all I am doing.

Anonymous said...

I have two questions for you Bernie, looking for some clarification.

1.If I am understanding you correctly, the 1965 ACT was a way to take a tax collected from employees in the cities and redistribute them to the places people live, so some stays in the cities but as townships have developed more of these collected taxes have moved from the cities to the townships, boros, etc. You are making the argument that it was/is wrong to change how this money is distributed, but what about the original legislation? Wasn't it wrong to have the EIT tax in the first place?

2. It is my understanding that the EIT is collected by the employers municipality and then distributed quarterly to the employees municipality. If this is the case, shouldn't it be simple for the townships to get a quick approximation of the lost revenues? Seems to me that it is quite alarmist for Jay Finnigan to use the $500, $50k or $100k (as reported in the MC) number when, if I am correct, he should be able to quickly come up with a reasonable number.

Thanks,
Publius

Anonymous said...

Why were reasonable estimates not made public BEFORE the law was enacted?

ADVISOR TO STYLE POINTS COMMITTEE

Anonymous said...

Why does ironpigpen continuously post anonymously with ridiculous names like VIKTOR TIKHONOV? Anonymity means just that.

Anonymous said...

So who will sit on the ACIDA Board?

Will Arena impact fees be shared with adjacent municipalities? Afterall, Allentown felt entitiled to Bethlehem gaming revenue.

Anonymous said...

It is laughable that all of these wealthy townships, who are able to pay managers like Finnigan over $90K a year are moaning and groaning about losing some EIT revenue for a relatively short period of time for the betterment of the entire region. The arena will, like CC Park be a huge success bringing in millions for not just Allentown but the entire Lehigh Valley. It is another HUGE factor in improving the quality of life in our region which attracts businesses to industrial parks in Hanover, Bethlehem, Lower Macungie and other wealthy twps. Those surrounding areas are only too happy that they don't have the poverty and crime of the third largest city in Pa. The arena will create hundreds of jobs, enabling many of the city's poorest residents be able to work rather than live on welfare. This arena financing deal is good for the area and if the highly-paid township managers and other municipal officials didn't even see it coming, they weren't doing their jobs.

Anonymous said...

The only answer for the suburbanites is to refuse to shop or dine in Allentown. Simple as that!

Anonymous said...

"The only answer for the suburbanites is to refuse to shop or dine in Allentown. Simple as that!"

You mean just like they refuse to do now? Courageous plan, sir.

ALFONSO TODD said...

Bernie,

Ms. Patrice Sidoione of The "ALL THAT SALON", formerly in Allentown, PA but forced out "for the good of the arena", predicted this chaos months ago. It started with the closing of the thriving businesses between 6th and 7th Streets and now it has reached beyond the borders and is in the pockets of the surrounding municipalities...


Yes, it's about to get hectic, but I have one question? Why did it take other surrounding locations to be affected for the situation to become a widespread travesty or cause an uproar? THINK ABOUT IT!

Alfonso Todd

www.alfonsotodd.com

Dave said...

The municipals that are being taxed by Atown are not remiss here. We have our own business to take care of on an every day basis. You don't expect us to watch every story/rumor that comes from that city..do you? Get real. This was hidden from all of us for one of two reasons..they either screwed up or they did not want us to know. Either way they are inept and or crooked. I represent the taxpayers of Bangor and I'm supposed to keep an eye on what is going down in Atown and HBurg too?

Anonymous said...

Maybe what we need is some of the succesful and talented managers in the Legigh Valley to move to the core cities and turn them around. Is Pat Browne a RINO?

Dave said...

Our boro manager is worth his weight in gold. He's saved us thousands of bucks by doing the job of finding the savings and the grants and doing things efficiently and always looking for more of the same. Why do you think we finished with a surplus and no tax hikes for the duration of his tenure so far. Amazing what can be done. Atown should be asking us how to do it and not trying to rob us.

Anonymous said...

Dave said...


"...and the grants..."

And there you have it.

Another pol who is OK taking the money of others when it balances his books, but screams when it is done to him.

You all deserve each other.

-Clem

Dave said...

Grants are our own taxpayers state money coming back to them for worthwhile projects. Why wouldn't we seek to have those funds returned to the boro? Want some cheese to go with that whine?

Dave said...

Grants are publically advertised by the state and totally transparent in nature in comparison to Atown's EIT theft provision that was hidden in stae fiscal legislation that is forty pages long. Not advertised..AT ALL!

Anonymous said...

Worthwhile? Because Dave or some other pol says it is?

I'm sure Ed thinks his boondoggle is "worthwhile".

As for transparency, are you saying that you know where every dollar came from, from which municipality, from which citizen, in what amount, it was extracted? That the laws for every dollar of "grant" revenue have had a thorough public vetting, are stand-alone and were not embedded in another bill? Or is it that none of that matters if it schtuped the people in some other part of the state and ultimately worked out for you?

Grants, schmantz. Grants from a state that has no money. Grants from a Federal government that has to beg the Chinese for a loan every 3 months.

But, hey, if it is,...worthwhile...

-Clem

Anonymous said...

Well Dave, Finnigan's job is to save thousands and the board of supervisors has a little bit to do with that. Your township residents should be overjoyed that your taxes are so low. Instead you cry about the diversion of some EIT bucks that will benefit the whole region. It was passed by the General Assembly for a reason. If Finnigan and all of the township supervisor and manager organizations that your twp. pays dues to be a member in fell asleep at the wheel that's tough crap. Those associations are in Harrisburg every day and are supposed to keep track of ANY legislation that would have an impact on townships. It is hard to believe that they didn't see this coming and did not alert their members about the negative impact on their revenues. The cow is out of the barn and the local municipalities are chasing it around the pasture.

Anonymous said...

"Why does ironpigpen continuously post anonymously with ridiculous names like Viktor Tikhonov ... "

One day, Anon 3:55, you will see the method behind what you perceive to be madness.

Do you even know who Viktor Tikhonov is, what he is symbolic of and how he relates to Chairman Pawlowski's $ 160.0 million dollar Palace of Sport?

YOUR PATIENT TEACHER