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Nazareth, Pa., United States

Friday, January 27, 2012

Simmons: Allentown's Tax Grab Here to Stay

State Rep. Justin Simmons has contacted me to explain the NIZ, how it was enacted and what can be done about it. According to him, it's too late to repeal it. Here's what he has to say.

This was one of the many reasons why I decided to challenge my predecessor in the 2010 Republican primary. Since this is complicated, I'm going to send you bullet points of what each vote meant. There are several things to keep in mind here. First, the NIZ for Allentown was created in 2009 which included the borrowing of EIT funds from other municipalities. Second, because this was passed in 2009, we couldn't repeal it. The basic reason why the NIZ language was in the fiscal code of 2011 was that Allentown was and is still in the process of building the arena. Third, we have to pass a fiscal code in order to enact a budget. It's huge and it outlines every precise detail and tax zone in the Commonwealth.

I would ask former Representative Beyer why she thought this was good for the other municipalities she used to represent besides Allentown.

     • The Neighborhood Improvement Zone (NIZ) was first established in the 2009 Fiscal Code

       • o HB 1614 – the vehicle that was used to enact the 2009 Fiscal Code

            The legislation which eventually became Act 50 was originally voted in the House on September 17, 2009 was sent over to the Senate for consideration. When the legislation was sent to the Senate, the NIZ language was not present in the bill. The final passage vote to sent the bill to the Senate was: 192 – 4.

            The legislation was amended in the Senate. The amendment inserted by the Senate included the NIZ language.

            When the bill returned to the House for a concurrence vote on Senate amendments, the bill passed on an almost party line vote. The only two Republican “yes” votes were Rep. Beyer and Rep. Denny O’Brien.

       • SB 907 – the vehicle that was used to enact the 2011 Fiscal Code

            While this legislation made some changes to the NIZ program, it did not significantly change the language that was implemented in 2009

            Because the project was already under way in 2011 it would have been very difficult to change the language

           The changes we did make were to ensure that

           • (1) the governing body of the zone (in this case the City of Allentown) was not able to “sit on” taxpayer funds – a clause was added to the language stating that if there were excess monies in the NIZ fund, they will be distributed first to the State and then to the local municipalities if any monies remain

           • (2) to safeguard the interest rates of the bonds that are issued. The Commonwealth is on the hook for these bonds and in order to ensure the taxpayers received the best possible interest rates, we needed to clarify the Commonwealth pledge language.

           • (3) we limited the term of the bond financing to 30 years. It is our understanding that 30 years is the length of the bonds being issued. We wanted to ensure that whenever the bonds were refinanced, that they were not extended beyond the initial 30 years period.

     • It is important to note that without the changes in 2011, the taxpayers would be potentially be liable for increased expenditures based on interest rates and the length of the bonds being issued.

     • The language was not new in the 2011 Fiscal Code, it was already enacted.

I hope this helps to clear things up.

Sincerely,

Justin Simmons

34 comments:

Mr Brownstone said...

god bless Allentown and the arena, hopefully voter disdain is revealed in full force come election day, too many cronies and not enough caring in politics lately, its a down right shame America is the way it is

Mr Brownstone said...

...and Pat Browne needs to go, VOTE OUT BROWNE NOW!!!

Dave said...

Browne is a lame duck! He has already said he's stepping down when his term expires. It's always somebody else's fault..isn't it? Still no call from Boscola and I called on Tuesday when this story hit the fan here. Vote the liars and thieves out of office when you have the chance to do so. Greed is good..right? A pox on all their houses.

Anonymous said...

Better yet, tax sharing is here to stay. Amazing how a document adopting a state budget can be amended to include this stuff.

Anonymous said...

I wonder if Justin is still living in his moms basement?

Anonymous said...

THis may be much to do about nothing

Some of these properties were already in Keystone Opportunity Zones. That legislation provides for zero earned income tax payments for people working in the zones. So tax payments would not have gone to Allentown or home municipalities anyway. When Olympus moved into Upper Saucon it moved into a KOZ It received the benefits and no one was screaming then. Everyone locally agreed that these areas were so blighted that it took a special tax credit to get them going again.

Anonymous said...

Bernie--Geeting brings up some good points on his blog about why Simmons is wrong on this one. I would suggest everyone checks it out.

Anonymous said...

you know...I wonder how I should think about the taxes I pay, and how they are used around the commonwealth. Not always pleased about them. And I certainly love how people abandoned Allentown over the years. Such love. Such commitment.

Such selfishness.

Anonymous said...

a little sel-serving and opportunistic here by the Kid. THIS is one of the reasons he went after Beyer? BS. At the time he ran, no one even knew about this.

I call shenanigans.

Anonymous said...

"When Olympus moved into Upper Saucon it moved into a KOZ It received the benefits and no one was screaming then"


bravo

Bernie O'Hare said...

Um, I was against that, too. But at least nobody was stealing EIT owed to small boroughs and other cities.

Anonymous said...

How do you figure? Boroughs and small cities lost taxes in that situation when people relocated to those communities. Same for Allentown. The land is being emptied. When new businesses move in, as they moved in to KOZs, taxes will not be earned as is the situation in Upper Saucon.

Bernie O'Hare said...

How do I figure? Bc as lousy and as ridiculous as KOZ laws are, and they are, they did not allow the theft of EIT from one municipality to fund the "transformation" of another. And I call it theft bc that is what it is. You can see from Simmons remarks, as well as those of Harhart, how this was slipped into the bill, with many legislators being none the wiser.

Are you getting overtime pay from Reilly to pretend to like this mess on a weekend?

Also, you have not answered the question I posed when you were posting as downtown arena attendee. Are you Jeff Vaughan and Colleen Whitby? There is no doubt that the City and Reilly probably retained Vaughan to be PR consultants for the project. I hear Vaughan has been named marketing consultant for the Phantoms. He already represents his brother-in-law, JB Reilly.

So who are you?

Anonymous said...

Actually, I am not any of those. In fact, I am not for or against the arena. I just am bothered by the fact that we have been using this EIT break to fund other development sites around the state and people are upset at this example. If you are opposed to the KOZ example as well then I suppose you should be commended for your consistency. The arena proposal differs from the KOZ in term. It is attached to a thirty year bond. KOZs were limited to several years and some may run longer than ten. It is therefore not entirely comparable to the arena proposition, but it is not entirely new in concept.

I only checked this site because I updated a statement I just posted this morning on the Lehigh County reassessment drawing attention to the main reason that we should be skeptical of this process at this time. The required tax reductions following a reassessment may cause problems for many Lehigh communities including Allentown. Cunning ham wants to wait. he does not have to. He can establish a base year different from the current market year.

I am a former office holder. I like to point out facts. I don't ever attack people.

Bernie O'Hare said...

Fair enough. We do have someone who is coming on here, "Future Arena Attendee" or something like that, who is obviously being [aid the shill for Reilly. I am very sensitive to what I call astroturf blogging, so I am leery right now.

You are correct. You attacked no one.

Dave said...

This story is really attracting a bevy of COWARDS! When you turn on the lights they scurry for cover like cockroaches. If Gracedale was last years story of the year..this may be this years continuing headline. Bangor has called all the major companies/entities in the NIZ to find out if we have tax payers working there. I would encourage all local municipals to do the same to gauge the impact this will have on your local budgets.

Anonymous said...

No one including Senator Browne had the guts to let municipalities know what he was doing.

Anonymous said...

I am not working overtime on the weekend for Reilly and I am not either of the PR people you accused me of being. I am just an all around good person who loves Allentown and wants what is best for the city.

Jeff Whitby

Bernie O'Hare said...

Thanks for clearing that up, Jeff (Vaughn Colleen) Whitby.

Dave said...

Emrick thinks he dodged two bullets now...Redistricting thrown out and his blaming Browne instead of reading Act26 to see what the heck he was agreeing to! Still no call from Boscola..throw the bums out.

Anonymous said...

5:53 -

This is not much ado about nothing.

The NIZ is much larger than the narrow KOZ and includes some of the City's largest employers, like PPL (in the "new" building), and the Morning Call.

The City - and surrounding communities - could lose a large portion of revenue. Not that we'd ever know how much, however, since the Mayor and his crony council won't release any relevant figures.

Anonymous said...

Bernie,
Outside of the Pawlowski Administration, their associated cohorts, and the stenographic media, who actually supports this arena project? Has anyone (without a conflict of interest) actually put their good name behind this?
The only support I see is anonymous or part of the project.


Scott Armstrong

Anonymous said...

http://southwhitehall.patch.com/blog_posts/suburbs-owe-a-debt-to-allentown

Bernie O'Hare said...

The article linked to above is penned by Andrew Bench, who has a very interesting background, as revealed by his profile on Patch. I'm honored, even if he disagrees.

Anonymous said...

Goes to prove why Boscola is an incompetent and worthless State Senator . She doesn`t work hard enough and probably never knew this hooker existed in the law. Besides this she voted for the swaption which now plagues the county of Northampton. What a phoney and disappointment she is.

Anonymous said...

Boscola, Brenna, Warren: all likely too bombed on the job to feel like reading anything. This is how you get the worst state legislature in the US. Browne: crooked. Freeman: deceased. And so on and so on ....

Anonymous said...

How did Boscola vote for the NORCO swaption? How?

Bernie O'Hare said...

She did not. The point being made by the commenter, I think, is that swaptions were illegal in Pa. until a bunch of lobbyists got together and persuaded the Senate to legalize them. Boscola voted for that.

Anonymous said...

"The number one way to do this is to make people live and work in the same place."

The above is from the Patch piece. That one sentence with the word "make" sums it all up nicely. The author of the piece does not believe in true Freedom. People have the right to live where they want to without government making it difficult. Would the author of the piece have all live in his utopic Dublin, Ireland or Phila. NYC models?

John.Jay said...

@ anon 9:58. I am the author of the Patch piece and I think that you bring up a VERY good point about freedom, free will, and the structure of governmental incentives. I will write a new Patch piece about this next week.

For the time being, instead of using the word "must" I probably should have used the word "have" so the sentence you quote would read: "The number one way to do this is to have people live and work in the same place."

John.Jay said...

I mean this sincerely, thank you for the editorial advice.

Anonymous said...

Must, have.

It's all the same when we're tallking about Central Authority and Central Planning.

But, then again, the Progressives know this ...

Anonymous said...

Odd that Simmons would attack others, when he voted for the same Bill Act 26.

Anonymous said...

Yeah, this sounds alot like Nixon when he tryed to blame others in the Watergate scandal.