The East Penn Board of School Directors learned at Monday night’s school board meeting that East Penn stands to lose close to $160,000 this year in earned income tax money to Allentown’s controversial Neighborhood Improvement Zone.
Lynn Glancy, East Penn’s operations director, reported to the board that the administration finally is able to put concrete numbers to the NIZ impact, thanks to a report released earlier this month by Berkheimer Associates, Allentown’s tax collector. That report says the city’s special downtown tax zone -- created to fund a $220 million hockey arena and other improvement projects -- will collect about $1.8 million from outside municipalities, according to The Morning Call.
In East Penn, the quarterly breakdown by municipality is as follows:
- Alburtis Borough: $590.21
- Emmaus Borough: $5835.40
- Lower Macungie Township: $28,396.31
- Macungie Borough: $816.70
- Upper Milford Township: $3422.60
Beginning this year, earned income taxes collected from within a 130-acre area in center city Allentown and along the waterfront are being diverted to pay debt service on bonds that will pay for improvements in the area. The tax revenue normally would be forwarded to the home municipalities of those who work in the district.
Several municipalities and a school district have joined a lawsuit against Allentown’s arena project. The lawsuit was initiated by Hanover Township, Northampton County.
School Director Alan Earnshaw said that even with the long-awaited numbers on the EIT being diverted from East Penn, the jury is still out on exactly what impact the NIZ will have on the district over the long haul.
"Down the road, we may be getting nothing back," Earnshaw said. "That's why we need to be fairly conservative in terms of how we treat these funds for our budget. I've got a whole page full of question marks and until we have answers we can’t count on anything at this point."
School Director Julian Stolz asked whether it is time for East Penn to throw its hat into the ring and join the NIZ lawsuit, wondering if the litigation would have a bigger impact if more municipalities and school districts were involved.
"$160,000 is a lot of money," Stolz says. "It is basically Dr. Seidenberger's whole salary. I'm questioning if we should join lawsuit, since when you're talking numbers to the tune of 160,000 a year, it might be a prudent decision."
East Penn Superintendent of Schools Thomas L. Seidenberger said that at this point he is willing to sit on the sidelines and watch what happens with the NIZ lawsuit.
"If they are willing to take the lead, I am willing to let them to spend the money," Seidenberger said.
School Board President Charles Ballard added that East Penn could decide to file an amicus brief at a later date, stressing that such a decision would be a matter for executive discussion.