Township, Borough Officials Angry at Allentown's Tax Grab

Hanover's Jay Finnigan

Under a law passed in 2009 and amended in 2011, a 130-acre downtown Neighborhood Improvement Zone was established in Allentown, to defray construction costs for a hockey arena and other improvements. But what was largely unknown, until a recent Morning Call report, was that even earned income taxes owed to other municipalities like Bethlehem and Hanover Township, can now be diverted to help support projects in the Queen City. Many local township and borough officials had no idea this would happen, and are disturbed that this could lead to revenue shortfalls in heir own budgets.

At a Hanover Township Supervisors' meeting on January 23, Manager Jay Finnigan told the Board this tax grab "could have a serious effect on the surrounding municipalities. It looks like some of our current tax dollars are going to fund financing and maybe building of the arena in center city Allentown."

Finnigan stated that in 2009, when this legislation was first proposed, "We expressed our opposition." He adds Township officials did so again last year, when the law was amended. "What right do any of these intermediaries have to take our money and divert it to some other purpose?" asks Chairman John N. Diacogiannis. Finnigan also questions why no financial analysis was done before this legislation was enacted to see how it would impact surrounding communities.

Joined by Lower Macungie Manager Bruce Fosselman and South Whitehall Manager Jon Hammer, Finnigan has notified municipal managers throughout the Lehigh Valley that they have scheduled a meeting with State Senator Pat Browne, the author of this legislation, so they can register their concerns. Finnigan adds, "It is imperative that all Political Subdivisions have their elected and appointed officials contact the members of the Lehigh Valley Legislative delegation and demand that the legislature modify this portion of the enacting legislation."

This tax diversion would include employees who work at PPL Plaza, the new Butz Building, Holiday Inn, Sacred Heart Hospital, the new Arena and the new J.B. Reilly City One Building.

Whitehall Mayor Ed Hozza reports that 90 Whitehall residents are employed at Sacred Heart, but township and borough officials have no idea of the exact numbers affected. Hozza has laid out some options suggested by other Township managers: (1) withhold EIT due to Allentown; (2) demand that every municipality have membership on the arena board; (3) take coffee and dump it in the Lehigh, not tea; (4) boycott the arena; and (5) demand a luxury box at the arena for every resident whose tax dollars have been diverted.

Bangor Borough Council member David Houser has branded the tax grab nothing short of "taxation without representation."

Updated 10:20 AM: East Penn School Board Prez Chuck Ballard, in response to learning of the EIT theft, has suggested a new name for the Phantoms - the "Allentown Pirates."