Township lawsuit threatens to put arena project on ice
Municipalities upset with use of earned income tax to fund project
Could Allentown's proposed hockey arena be put in the penalty box before players even take the ice?
It's a real possibility as Hanover Township in Northampton County plans to sue the city over how earned income tax is being used to fund the project.
Managers of other municipalities across the Lehigh Valley said they are now trying to figure out if they will join the pending lawsuit, which could put the project on hold.
"It's part of our revenue every year," said Cindy Miller, Lehigh Township supervisor.
For smaller municipalities with shoestring budgets, the earned income tax is revenue that can be the difference between buying a new police car, laying off staff or having to raise taxes.
"We already cut to the bare bones 11 to 12% , cut across the board last year," said Scott Sylvainus, Upper Nazareth Township supervisor. "We lose more, and something else has to go."
So how could a flashy new hockey arena in downtown Allentown be a financial body-checking blow to some like Miller?
"Because we receive earned income tax, EIT money, comes back into the municipality for those who work," the township supervisor said.
But through the newly created Neighborhood Improvement Zone, or NIZ, the earned income taxes for anyone working within a 130 acre district in downtown Allentown would go to pay for the $150 million hockey arena instead of going back to municipalities.
"Small and large school districts and municipalities don't know what is the financial effect," said Dave Woglom, the executive director of the Lehigh, and Northamptons Tax Collection Committee.
Mayor Ed Pawlowski, D-Allentown, has said surrounding areas will benefit from the project in the long run and should be keen on helping to pay for it.
Those like Sylvainus in Upper Nazareth Township, who met with other local leaders at the Hanover Township Community Center on Thursday, said, in terms of how long the money will be held, how much will be taken out and if anything comes back, isn't clear.
"Are we getting 100% back, 10% back? Seems to be all over the place depending on who you talk to," Sylvainus said.
Pawlowski said he met with the Lehigh and Northampton Tax Collection Committee, the body looking into the questions.
"We met with the attorney and answered all the their questions yesterday [Wednesday]," Pawlowski said.
"As of yet, don't have a response from the city, nor do we have a financial breakdown of what individual effect would be on each individual subdivision," said Wolgam.
After being pressed further, Pawlowski wouldn't say when a hard copy of the data the municipalities are looking for will be available.
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