Donaher Wants Control Over Hotel Tax Grants

Diane Donaher at CIPP presentation

Sparks flew yesterday during the first of at least four budget hearings for Northampton County Executive John Brown's proposed 2016 Budget. DCED (Dep't of Community and Economic Development) Director Diane Donaher incredibly tried to give herself control over nearly $500,000 in hotel taxes, rather than let the people's representatives decide how that money should be spent. It was a surprising display of hubris from someone who was unable to explain whether she's produced a single job and who, just two years ago, was a voice over artist. In the process of trying to take control of this funding, she has hurt many organizations, including downtown Bethlehem merchants, Celtic Fest and the Walnutport Canal Association. This is because they were unable to submit applications for funding this year.

Pursuant to state law, Northampton County collects a 4% hotel room rental tax from every hotel. It is required to use that revenue for tourism and community development. Over the years, between thirty or forty different groups seek funding by filing applications with the County DCED. They are rated and then forwarded to Council for approval or denial as a part of the budget process.

DCED bureaucrats have always attempted to judge the merits of an application on the basis of objective criteria, which they think is free from politics or favoritism. But Northampton County Council has always had final say and has done some strange things. One year, former Council members Ron Angle and Charles Dertinger both clamored to increase the funding for the Blue Valley Farm Show to about twice what had been sought, if there was even an application. Ann McHale always found a way to make sure the State Theater received more money than it requested.

As flawed as the grants process is, it is transparent and the elected officials who award these grants are accountable in news accounts and at the polls.

This year, Donaher decided, with no authority from the governing body, to suspend the practice of seeking hotel tax grants from local organizations. Thus, Historic Bethlehem is unable to seek a grant of hotel tax revenue year for colonially-costumed docents to lead tours and assist visitors. No money is set aside for the maintenance and care of the historic Kreidersville Covered Bridge, the only covered bridge left in Northampton County. Whether it is the Steelworkers' Archive or the Bath Farmers' Market, Donaher turned off the hotel tax spigot.

Instead of these usual grants, the proposed Budget shows that $496,500 in hotel tax revenue is set aside for "future block grants."

Donaher explained that she was considering giving all or a large portion of it to the Northampton County Historical Society, and let it decide how the money should be spent. "We're looking at changing the process," she said.

Council exploded.

Democrat Lamont McClure said he is "very well aware" of who sits on the Historical Society's Board. He was referring to prominent car dealer L. Anderson Daub, a major contributor to Republican candidates. "This is an outrage," he remarked. Peg Ferraro attempted to steer conversation away from the topic, but McClure and Ken Kraft both insisted that Donaher explain herself.

Donaher denied that she was motivated by a desire to funnel money to Daub's favorite charity. I agree. I believe she is motivated by a colossal ego that is utterly dismissive and almost contemptuous of Council Clearly, she and her bureaucrats think they are better equipped to decide how to spend the people's money than the people's own elected representatives.

She also dismissed questions asking her how many jobs her department has created since she became Director two years ago. She indicated that she relies on LVEDC  (Lehigh Valley Economic Development Corporation) to bring in jobs with 50 or more people. She and her staff work on creating jobs for smaller businesses in places like Nazareth and Hellertown. She was unable to state exactly or even approximately how many new businesses or jobs she's been able to snag.

How Donaher is going to be able to present these grant requests without having first sought applications is a mystery. She left the meeting without speaking to anyone.

Council was far less confrontational over subsidies to the Lehigh Valley Planning Commission (LVPC) and mass transit provider LANTA.

LVPC is slotted to receive an increase from $425,000 in 2015 to $525,000 next year. Executive Director Becky Bradley had sought $575,000, and John Brown said he would have supported a grant in that amount because she "stretches everything we give her." He predicted any money spent on LVPC "will pay dividends back to the county overall." But when Brown called Lehigh County Executive Tom Muller, he learned Lehigh is only giving $525,000. Because the county grants must match, Brown reduced his grant to match Lehigh County.

LANTA also is slated for an increase in funding from $434,400 to $493,700. As explained by Executive Director Owen O'Neill, without that increase, state funding could be jeopardized.

Council learned that no money is being set aside for farmland preservation and other open space programs next year. This is because money set aside in previous years is sufficient to cover all expenses this year. Open Space Chair Scott Parsons actually agreed with Brown that enough money is there. It should be noted that the Chrin TIF has generated $204,000 for farmland preservation.When he was on Council, Ron Angle negotiated a deal with developer Charles Chrin to set aside a small part of the gross sales price of each lot as sold to fund farmland preservation. It is beginning to pay off.

Hayden Phillips also established that $9.3 million will be used from cash reserves to balance next year's budget.

Department heads were missing from yesterday's meeting, despite informal requests that they be made available. Brown promised to make them available for the next three budget hearings.