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Tuesday, August 02, 2016

Bethlehem Tp Follows NorCo, Hanover Tp, To Condemn NIZ Hotel Tax Grab

Bruce Haines
Hotel Bethlehem Managing Partner Bruce Haines, a regular at City Council meetings, was with the visiting team on August 1 at Bethlehem Township's Board of Commissioners. Before a lively crowd of about 35 people, he was there to discuss a topic most only notice during their annual vacations - hotel taxes. He left a happy man because the Board voted to adopt a resolution condemning recent changes in the hotel tax collected inside Allentown's Neighborhood Improvement Zone (NIZ) that have a negative impact on hotels everywhere else.

Bethlehem Township's vote follows a similar resolution by Northampton County Council on July 21 as well as Hanover Township's Board of Supervisors on July 26. According to Hanover Township Manager Jay Finnigan, other Lehigh Valley municipalities are scheduled to vote on this matter in coming weeks.

Hanover and Bethlehem Townships are the two local municipalities that first filed legal challenges to the NIZ law, based on its diversion of earned income taxes. Sixteen townships and boroughs, along with a school district, eventually joined them. State legislators ultimately amended the NIZ law to remove the controversial language that authorized an EIT tax grab.

Now it's a diversion of local hotel taxes collected inside the NIZ.

Northampton and Lehigh County will collect about $4.5 million this year from a 4% hotel room rental tax imposed on the Lehigh Valley's 57 hotels. A healthy chunk of this money funds Discover Lehigh Valley, the area's tourism agency, and Lehigh Valley Economic Development Corporation (LVEDC), whose focus is on getting and keeping jobs. Lehigh County uses some of its hotel taxes to pay for the Iron Pigs. Northampton County hosts an annual round of hotel tax grants for everything, from the Blue Valley Farm Show to the State Theatre.

There will be less money to go around this year, thanks to a last-minute change to Allentown's controversial Neighborhood Improvement Zone (NIZ). Buried in the Fiscal Code by Senator Pat Browne as part of the state budget, it's yet another handout to developers in what is already the most heavily subsidized tax zone in the state. Hotel taxes collected inside the NIZ will be diverted to build new or upgrade existing hotels.  This means less money for the tourism bureau and the job creation that LVEDC CEO Don Cunningham has engineered.

"Hotels don't need subsidies to be built," Haines told Commissioners."If the demand is there, and the developer puts 20% down, he can get financing from the normal markets without ever having to be subsidized by the state, the City, or the County or anybody else."

He said the diversion of hotel taxes inside the NIZ is "unfair competition" to developers who did it the "old fashioned way" and used their own money. he observed that hotels outside of the NIZ will now fund a tourism and economic development engines, but hotels inside the NIZ making no contribution will reap the benefit.

"I know highway robbery when I see it, and this certainly qualifies," observed resident Craig Storrs, Jr.

By a 4-1 vote, Commissioners approved the resolution condemning the diversion of hotel taxes, and Haines stated he would ask Bethlehem City Council to express it approval, too.

The sole No vote, Michael Hudak, denied that he was opposed because of his membership in a trade union. "You know me," he said after the meeting "I vote what I think is right." He added that the only real change would have to come from the state legislature.

Updated 11 am:  Hellertown Borough also adopted a resolution at their ugust 1, 2016 meeting, condemning the hotel tax grab.


Anonymous said...
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Bernie O'Hare said...

When Bruce Haines decides to run for office, you can anonymously smear him. Until then, I expect you to identify yourself. Since you are slamming his business and trying to ruin his reputation, I would encourage him to sue you.

Anonymous said...

The sting of the NIZ, [Pawlowski, Browne, Reilly, Topper, Butz, Traub and company], is once again yielding its ugly, greedy hands on tax money; at the expense of other local businessmen! Nothing new from this crew: Dam the taxpayers!

Anonymous said...

I rarely agree with Haines as he has NIMBY tatted on his forehead. However he is correct on this matter. My personal thoughts are that the yahoos listed in 7:04 should all be in jail. Don't forget to vote Trump.

Patriot2 said...

1:23-The customers of the Hotel Bethlehem don't appear to agree with you as they have rated the hotel #1 out of 57 hotels in Lehigh Valley each & every month for the last 4 years!!

How is Haines a spoiled brat when he took a boarded up hotel from bankruptcy to #1 Hotel with zero subsidy from taxpayers? He merely wants a level playing field which the NIZ & CRIZ distort to produce unfair taxpayer subsidized competition undercutting his hard work. That is not being a NIMBY!!

Anonymous said...

Senator Pat Browne has got to go, he no longer represents all the people of his district. Apparently the Legislature fails to reivew the final bill before they vote.

Anonymous said...

Browne, and many others, are just following the lead of the bigger CROOKS who operate in Washington. If you vote for anyone currently sitting in elected office, you are ASKING for trouble.

Patriot2 said...

Browne represents the worst of chrony capitalism shilling for JB Reilly among others. Next thing you know Reilly will buy Holiday Inn to get his Rennaissance hotel tax money. Dump Browne in next election opportunity.

Anonymous said...

Mr. Hudak should protect the businesses in his community. Typical union hack!

Bernie O'Hare said...

I'm no Hudak defender, as he would tell you. I have probably been more critical of him and his views than anyone. Sometimes, he gets his facts mixed up, but I have always found him to be honest. If he tells me his vote had nothing to do with his union membership, I believe him.

Anonymous said...

You know all the hubbub is really about nothing here.
Northampton County will see no change in the hotel text they collect and distribute to the county entities.
These resolutions mean nothing, as NORCO municipalities are not effected by this.
Stershick and the Gand never really promoted Northampton County anyway, even with all the money they get from us.

But let's feign shock and awe that Pat Brown did something wrong and we need to get even, resolution anybody?

Anonymous said...

I bet you said the same thing when the municipalities sued over EIT going to the NIZ. Senator Browne lost that battle as he will this.