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| Pawlowski's hole |
It's still under wraps and is unavailable for public review online.
Currently state law allows developers inside the 130-acre NIZ, like office building and hotel developer J.B. Reilly, to pay for improvements with state taxes. It also allows developers to divert all EIT revenue, even for workers who live outside the City. This tax grab has spawned litigation by nineteen municipalities and school districts, as well as the Pennsylvania State Association of Township Supervisors.
Allentown has finally released figures - first promised to Townships in February - revealing how surrounding communities will be impacted by this diversion. Allentown Mayor Edwin Pawlowski attempts to soften the blow by minimizing it. But Hanover Township Manager Jay Finnigan, after a meeting with Supervisors last night's meeting, stated that a $23,000 loss is significant in his Township.
"If it's $23,000, that means no salt on the road," he explained.
Pawlowski has guaranteed townships that their EIT revenue will be returned, but he also promised to produce the figures back in February. His failure to do so, as well as his general lack of transparency over the entire NIZ fiasco, has diminished his credibility among Lehigh Valley communities.
Simply put, they just don't trust him.
And for good reason. While feigning conciliation, Pawlowski operative Sara Hailstone has been peppering several townships with multiple Right-to-Know requests that border on nuisance, asking for minutes and email addresses that are already online.
Against this background, state legislators are working on a Fiscal Code Update that simply removes the EIT tax grab from the NIZ enabling legislation. Senator Pat Browne, the Majority Whip who introduced the NIZ back in 2009, has reportedly agreed to go along with this change at the urging of Lehigh Valley state house members.
I will attempt to get confirmation from Senator Browne.
While this resolution does not fully address the concerns about special legislation for a closed class, or answer developer concerns about an uneven playing field, it goes a long way.
Re: rtk requests... Some lawyer has been doing the same in Allentown. Nobody is a saint in this matter.
ReplyDeleteThe powlousy administration obfuscation policies are now legend.
ReplyDeleteI'll never believe the lies spouting from Mr. mayor or any of of his cronies.
I am starting to like puds pit.
The special legislation issue will be handled by amending to current language to make it constitutional,ie broadening the census limits somewhat. Will be handled through the budget process too. Then it's over. Loser is the taxpayer and state treasury. When Air Products moves a unit into the NIZ for a new building and PP&L exploits the NIZ benefits (for 30 years) we'll see who gets the short end of the stick. While we're at it, let's bring some other cigarette wholesalers into the NIZ too. Sorry CHIP.
ReplyDeleteAgree with 7:46 about corporate welfare aspect.
ReplyDeleteAlso, in that Allentown has demonstrated what a small amount of money is at stake, it seems logical to get rid of the provision. Why would Allentown have so mismanaged communication on an issue involving what they claim are pennies? They created a great deal of ill will from the people they hope to lure to their arena. Lord knows, it won't survive on attendance from within the city limits. This hockey fan from the boonies will never attend a game there. They've insulted me while attempting to steal my wallet. Not good marketing. It's a city without limits to its thuggish audacity.
If you're a hockey fan you'll be there, if not in three years in ten, youll get around to it here in the valley
DeleteThe NIZ can't survive without the EIT. That was the pivot to the whole thing.
ReplyDeleteThe whole scheme was to collect far more EIT after the arena was built from all the employment moving in to the NIZ from the new office buildings, arena, etc.
They will constantly be scraping together money from various sources to pay off millions of dollars in bonds.
No EIT and the arena becomes really unaffordable at its current price tag.
Although I have heard this story from two dissimilar sources, it has nt been confirmed. So just to be clear, Ican't say for sure yet that the EIT or any change s being made to the NIZ. I have asked Senator Browne to confirm or deny. I have since heard that the Governor wants everyone on the same page on this change.
ReplyDeleteMore leaks than in the Obama White House!
ReplyDeleteSome are wishfull thinking and hoping the EIT elimination will kill the NIZ. But, if they were willing to negotiate it away, what makes it a show stopper? No real info on numbers to make judgements.
Will be glad when this is resolved.
I don't think it's anybody's wishful thinking, just looking under the hood at the NIZ engine.
ReplyDeleteI think the removal of the EIT ends the NIZ as currently proposed. How would the City authority generate enough revenue to pay for hundreds of millions in bonds without that significant EIT revenue?
the state income tax is 3.5% which goes to the NIZ. the EIT is 1.35%. so the change will reduce that portion of the income stream from about 5% to 3.5%. Reilly and company still has the cigarette tax to use, independent from the number of employees the NIZ eventually draws.
ReplyDeleteMr. Molovinsky:
ReplyDeleteThe state personal income tax rate is 3.07%. The state corporate tax rate is much higher (9.99%). I'm assuming that this would be in the mix as well.
Add in the taxes that most people aren't aware of (like the cigarette tax you mention) and there's still plenty of state tax dollars to draw from.
I think a valid question is how is the (potential) loss in state tax revenue (from current businesses and PA businesses moving into the NIZ) going to be offset in the (general) PA budget?
The Governor has proposed cuts to Education and Human Service programs, and is citing declining revenues as part of the cause. How much (if any) of those cuts are necessary because of the NIZ?
The NIZ monies may or may not be significant to the overall PA budget, but it would be nice to know that someone at the state level is running those calculations. It would also be nice to see those figures presented to the public. All this should be discussed via open debate and not just tucked into the back of a budget bill. Doing all that would be a welcome change from the way the project has been handled so far.
If it's worth doing, it's worth doing right - and it should be able to stand a bit of public scrutiny.
What of the cigarette, malt liquor and gas taxes? Cigarette tax raised in the name of Childrens Health Insurance, Medical Malpractice Insurance, children smoking prevention, health care costs, etc.
ReplyDeleteThe cigarette wholesaler when it was purchased provided the State $7.2 million as reported by M.C. Add to that now common owned retail locations plus possible growth and simply multiply by 30 years and you have hundreds of millions to be diverted from State's budget. This says nothing of inflation or tax increases to cover the very hole the law created.
How about the gas tax collected by the fuel distributor also owned by the same group?
With all the discussions about budget cuts and the like by teachers, government workers, cities and towns, colleges and school districts, why is this "tax grab" being ignored on a State or National level?
Where is the concern by Smokefree Lehigh Valley, Tobacco Free NEPA, or PACT about having state funding cut due to reduced revenues? It was news a few weeks ago when cigarette tax and settlement funds were going to be tapped for the general fund thereby reducing dollars to groups like these and the farmer's preservation fund.
The recent poll results the Morning Call showed that that 95 Percent surveyed support the municipalities lawsuit as to the N.I.Z. taking of the EI.T. from them. THE legislators know that their support of the Tax Grab will lead to their defeat this election and now need to change their vote and the only way this can be done is to amend the current law. This then gets to the Senate,where it could lay to after election and with no actin, sin ce the end of a legislative session has t be reintriduced. but the house members can say that they support the 95 Percent that favor the lawsuit.
ReplyDeleteThe legislators will HIDE behind the fact that the NIZ amendments relating to its constitutionality and elimination of the EIT will be tucked into a 900 page budget package. Are any of our legislators tough enough to hold the budget hostage because the to be amended NIZ will still be a horror story?? A 30 year horror story with no limits to the screwing the taxpayers will take. All this and possibly not one new job created in the NIZ district.
ReplyDeleteBernie, your sources are correct. Am hearing the same thing from more than a few.
ReplyDeleteHey, even a broken clock is right twice a day.
ReplyDeleteWhat the hell, if they cut the EIT out of the legislation, then the municipalities just get the settlement offer that the city has already extended to them, minus the 1% development-sharing revenue. That's really stupid. They should take the settlement and run.
ReplyDeleteJust Say No To The NIZ
ReplyDelete@ 5:20. If nothing else, I think this whole mess has shown us the outlying municipalities are governed by a bunch of yokels who don't know their heads from their tails. Let them to continue to flounder on their "principles."
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteIf the state plays with this at that level they will be in acceptance of the uncontitional way this law was passed and there for be open to the suits already filed. It would be in Corbets best intrest to set this one aside to be decided on the federal level.
ReplyDeleteThe trying to mess with this mess will be acknowledgement that he knowingly participated in the underhanded structure of this law?
@ 8:56. No, if the law is amended and the EIT is removed, then the outlying municipalities will lack standing and the lawsuit will be over.
ReplyDeleteBernie, did you notice that in Allentown's notice to intervene they also filed POs. Paragraph 23 puts forward an interesting legal theory--so interesting that the whole case may get thrown on procedural grounds. As you like to say, the lack of reporting on this is deafening.
ReplyDeleteAt the end of the day, Pawlowski's Pucksters have to sell tickets.
ReplyDeleteThe smugness of the NIZ Cheerleaders probably will not help achieve that end.
Particularly with front page headlines about budget cuts, shortfalls, woes --- pretty much everything under the sun except $ 220.0 million bucks to fill Chairman Pawlowski's hole.
PRINCIPLES STILL MATTER, AMONG OTHER THINGS
Publius, lease share the argument raised. I notice by the way, taht the matter will be argued in September
ReplyDeleteDo you concede, then, that Townships have standing now?
ReplyDeletePara. 23 "In addition, the other taxing authorities (municipalities and school districts) that will be subject to having their EIT retained by the Commonwealth for the purpose of supporting the NIZ financing must also be joined as indispensible parties under the Declaratory Judgment Act. This case does not fit within any of the exceptions to the general rule announced in City of Philadelphia v. Commonwealth, 838 A.2d 566 (2003)."
ReplyDeleteFor a Commonwealth Court that is anxious to get out of this case without ruling on the merits, it might be just what the doctor ordered.
I have never suggested that the municipalities don't currently have standing. However, if the law is amended as you suggest in this article, they may lose it.
That argument does not end, but prolongs the matter. All the Townships would have to do is amend and add the parties. So I don't see this as a quick out for the courts. But I agree that judges will take an out if they see one.
ReplyDeleteThe way I read it though, they would have to join virtually every municipality in the country because they are all liable to lose money from the EIT. Even if you take a more restricted view, it would still meaning joining municipalities like Salisbury who specifically voted to not join the suit. It could be an viable issue.
ReplyDeleteIt is ABSOLUTELY SHAMEFUL that Bethlehem Township would enter into costly litigation and hold up economic development over what would amount to ONE DOLLAR per year per taxpayer. Disgusted with the rubes running our town and following the beck and call of this blog.
ReplyDeleteBOH - Nice that you let that comment at 8:20 stand. You are pretty selective when editing which personal attack is appropriate.
ReplyDeleteDude, There are times when I have to sleep, and when that happens, I am unable to delete anonymous personal attacks like the one I just did and the one you complain about. Stick to the topic please.
ReplyDelete