LOWER MACUNGIE TWP., Pa. - For the first time in 12 years, Lower Macungie property owners will be paying a township real estate tax.
On Thursday night, township commissioners voted 3-2 for a 2014 budget that includes the .33-mill property tax.
Commissioners Douglas Brown, Ron Eichenberg and James Lancsek voted for the tax, while Ryan Conrad and Roger C. Reis voted against it.
"We're not asking for thousands of dollars from residents, we're not asking for hundreds of dollars from residents," said township manager Bruce Fosselman. "In most cases, it will be anywhere from $33 to $99 a year."
The average value of homes in Lower Macungie is $280,000, according to Fosselman, who said owners of such properties will pay a $92 township real estate tax next year.
Those supporting the tax stressed that large retail, commercial and industrial properties also have been paying no real estate tax to the township.
"Commercial and industrial users have had a free lunch for 12 years, paying zero," said Lancsek. "A lot of people don't know that."
Fosselman and Eichenberg said those large property owners include Wal-Mart, Mack Trucks, Buckeye Pipeline, developer David Jaindl, the Cedar Shopping Center where Bon-Ton and Giant are located, as well other large industrial, commercial and retail property owners.
"Is it fair that they are paying zero tax?" asked Eichenberg, president of the five commissioners.
He said more such large properties are coming, including the Hamilton Crossings shopping center and "multiple one-million-plus-square-feet warehouses" in Jaindl's recently-approved Spring Creek subdivision.
"I've been a proponent of this budget, and the accompanying one-third mill tax, since day one," said Eichenberg. "It is our civic responsibility to support the services our municipality provides. The taxes we are paying are an investment back into our community. They are an investment into our quality of life."
Fosselman said that tax will generate about $1 million, which will be used strictly for capital projects. He named just a few of the many capital needs for 2014, including replacing a 1989 Mack dump truck, which has over 117,000 miles. "The frame rails have started to rust away, the body is shot and the hydraulic system needs to be replaced."
Stressing the increased need for township services, Fosselman said in 2002, when the township eliminated the property tax, Lower Macungie had 19,200 residents.
"The latest projection is that we'll have 31,500 people as of Jan. 1. We've had unprecedented growth over the last 12 years," he added.
Fosselman, who lives in the township, stressed the goal is to maintain the quality of life Lower Macungie residents "expect and deserve."
The township manager said for several years Lower Macungie has been drawing down its cash reserves, money needed for major emergencies, to help pay for capital improvements. He said the township will enter 2014 with $4.2 million in reserves, less than half as much as it had five years ago. "We can't keep using reserves because we'll have no reserves left."
While Eichenberg and Lancsek expressed their support for the tax at previous meetings, Brown seemed more tentative in his early support.
Before expressing his own position, Brown asked commissioners-elect Brian Higgins and Ron Beitler to share their opinions on the property tax.
Higgins spoke first.
"For far too long, as citizens of this township, we have enjoyed the many blessings of living here without paying for any of them," said Higgins. "We've had a free ride."
He continued: "If I were on this board of commissioners right now, I would vote to approve this budget. To be perfectly honest with you, I would vote to approve this budget at a higher tax rate, because we've already cut out so many capital projects that I've seen cut year after year after year."
Reis got the best laugh of the night when he said he appreciated Higgins' honesty for saying he didn't think the tax was high enough, and then told Higgins: "I wish you had put that in your campaign literature."
Next month, Higgins and Beitler will replace Eichenberg and Reis, who were not re-elected in November.
Beitler was less direct in his response to Brown. "I do agree with the manager on the fundamental underlying problem," he said. "We can't keep operating the same way we have been." He also said he agreed with "elements" of what Higgins. "We have a problem on the table that we need to deal with tonight."
Beitler also agreed it's unfair that commercial and industrial property owners now "don't pay a dime."
Just before the vote, Brown said: "We've got a study that says every year for the next five years we're going to need a million dollars to fix the other things that are going to go wrong. We have to do what's necessary."
Tax increase misconceptions
Before the vote, Fosselman gave a detailed presentation explaining why the tax is needed and addressing misconceptions about it.
"We are not implementing a property tax," he argued. "We have a property tax in place since the 1940s. What we're doing is establishing a new tax rate. For the last 12 years our tax rate has been zero. We're proposing a .33 mill rate for the 2014 budget."
Fosselman said the tax will be used only for capital projects, stressing it will not be used to create a township police department or as any kind of incentive for the Hamilton Crossings project.
In response to a resident's question, commissioners also said it is not true that Lower Macungie needs a real estate tax in order to participate in a tax increment financing plan for Hamilton Crossings.
Fosselman said "it's just not true" that the new tax automatically is going to increase every year.
He even claimed that .33-mill rate could be lowered in 2015, "if some of the commercial and industrial projects that are forecast come to fruition."
Eichenberg agreed, saying: "Our tax rate will most likely come down."
Fosselman said the township's capital improvements plan shows $1 million to $1.25 million will be needed every year for the next five years, "so we already know a third of a mill is probably all we're going to need."
The no votes
But Reis was skeptical.
"The old saying is that nothing is as permanent as a temporary tax," said Reis. "We live in a time when the solution to most of our problems is to raise taxes. My biggest concern is that once you start this, there's no stopping it.
"We haven't done enough to cut the costs and try to economize."
Reis won some applause from the audience when he said he was voting against the tax. "The vast majority of people that are emailing me and calling me are telling me they do not want this tax hike."
Conrad, who also voted no, philosophically opposes property taxes, which he calls regressive.
He said not having any property tax is great, because it attracts people and commercial development to Lower Macungie.
Conrad unsuccessfully proposed Lower Macungie should use $400,000 of the township's cash reserves to pay for only some of the capital improvements that the administration proposes funding with a property tax. He said that will require cutting out $650,000 worth of expenses in the capital budget.
He made a motion to do that, but did not get a second from any of his four colleagues.
Referring to Conrad's recent efforts to rally public support to stop the property tax, Eichenberg said he respects everyone's right to debate the budget but that debate should have been initiated in September, rather than two weeks prior to approval of the budget.
Conrad responded: "To insinuate that at some point it's too late to have a discussion or engage residents is an insult to a commissioner's obligation. There is no right or wrong time to start a debate or discussion.
"I have been making my voice heard since early September when we started this discussion and have been pursuing alternatives since then."
"Did you read the budget?"
Thursday night's meeting was the sixth public meeting where the 2014 budget and property tax were discussed. The first was on Sept. 19.
"I'm glad to see so many people here this evening showing their civic responsibility," said Eichenberg. "However, I wish you would have been here in September."
Eichenberg may have discouraged some people from speaking because he asked everyone who stood to address the commissioners if they had read the budget.
One resident said people can't always make meetings because they have to work. Fosselman said the 2014 budget is online and asked if it's fair for residents to criticize township officials for the tax plan if they have not looked at the budget.
Lancsek said 95 percent of the people living in the township "don't even know where their tax dollars are going. They don't know the difference between the county, the school district and the township, and who's getting what."
Resident and former township commissioner Joseph Pugliese argued the overdevelopment of Lower Macungie is what caused East Penn School District to expand and significantly raise its property tax. "Property taxes, irrespective of where they're coming from, have gotten to be a very large burden on residents."
Kratzer Farm subdivided
In another hotly debated issue, commissioners voted 3-2 to subdivide a small part of the 30-acre Kratzer Farm property that Lower Macungie owns at 1966 Willow Lane.
Just over one acre of the property, containing a ranch-style house near Little Lehigh Creek, will be split off and sold. The township hopes to get $255,000 for it. The rest of the property, which includes a stone barn and a pond, will remain township-owned open space. The township also will retain ownership of the driveway to the house.
On that issue, Eichenberg, Lancsek and Reis voted yes, while Conrad and Brown voted no.
Brown said the township's new comprehensive recreation, park and open space plan recommends the subdivision not be approved. "For that reason, I will be voting against this plan."
Township planning director Sara Pandl said that comprehensive plan, which is still in draft form, recommends a master site plan be done on development of the Kratzer Farm property before any action is taken to subdivide it.
Added Brown: "You need a plan for Kratzer Farm, how you're going to develop it, before you subdivide it."
Speaking on behalf of the five members of the township's parks and recreation board, resident Julie McDonnell also objected to subdividing the property: "We don't believe putting a private residence practically in the middle of a big piece of public property makes sense."
Pandl said members of the township planning commission recommended to commissioners that they also would prefer the property not be subdivided, but asked for conditions if commissioners decided to approve the subdivision. One was that the 1.1-acre lot not be further subdivided. Another was that the house will not be used for any commercial purposes.
* Township engineer William Erdman reported that in the spring, the state Department of Transportation will complete repaving the Brookside Road Bridge over Little Lehigh Creek just north of the Princeton Road intersection.
"For those who drive that road and feel it is a rough surface, it is not complete," explained the engineer. "They did not have the time to finish that bridge before the onset of cold weather. It will get a surface coat in the spring."
Temporary traffic lights were operating at opposite ends of that bridge while it was being repaired from July until November.
* Township Solicitor Richard Somach told commissioners that for more than 40 years, Lower Macungie has planned to extend Sauerkraut Lane west of Route 100.
Sauerkraut finally will be extended from Route 100 to Spring Creek Road as part of Jaindl's 608-acre Spring Creek subdivision.
Somach said about four properties along Quarry Road west of Route 100 may have land that is needed for "right-of-way purposes." But he added one property may end up getting additional land, which no longer will be needed for roadway.
Somach said several of the owners already are aware that some of their property will be needed for the road's right-of-way. "Some will be very minimal; some slightly more than minimal," he said.
In the next several weeks the township solicitor and engineer will investigate specific parcels needed for right-of-way, determine "just compensation" for those parcels and then approach owners to get deeds, rather than going through legal condemnation proceedings.
* The township plans to erect signs to stop large trucks traveling south on Gehman Road from going beyond Scenic View Drive up to Mountain Road. Erdman said those signs will target trucks that are more than 40 feet long. The commissioners directed the township solicitor to draft an ordinance to authorize those signs.
* Commissioners voted to advertise ordinances to put a three-way stop sign at Riverbend Road and Orchid Place and to reduce the weight limit on the Wild Cherry Lane Bridge to 21 tons, which is being required by PennDOT.
Allentown, PA 18102