Sunday, November 13, 2016

Allentown Residents Wage Tax Increasing By 30+%

Details of the proposed 2017 Allentown city budget are posted online
http://www.allentownpa.gov/Government/City-Budget

The mayor's letter says, "Supplemental revenues are needed to balance the 2017 Proposed Budget and maintain proper fund balances into the future. To address this issue, the earned income tax collected by the city will be increased from 1.15 percent to 1.50 percent, which will provide $6.2 million in additional revenue annually. The increase will cost a $50,000 wage earner $175 annually.."

The way he puts it doesn't sound too bad, but if you do the math this is almost a 31% increase. This brings into question where are the increased revenues from all these people that were to have moved into Allentown's new NIZ funded apartments? The thing we're left to assume they must hold jobs outside the newly created ones within the NIZ.

While I do appreciate not increasing property taxes it still remains as to why the working taxpayers have to bear the increases required to make up shortages in the general fund. We were left with the impression properties within the NIZ should able to generate enough increased revenues for the general fund. Apparently not.


Something else to consider going forward regarding sewage upgrades.
While it's still too early to predict, because Allentown is appealing a EPA ruling, Allentown taxpayers could be facing many million of dollars the city will need to spend for these upgrades. Most likely they will come in the form of increased Capital Cost on future county water bills in some sort of combination with increased taxes to generate the revenue Allentown would need to borrow.

In my opinion neither the water deal nor the NIZ in the long run will be a godsend when it comes to future taxes in Allentown. Maybe I'm all wrong. If anybody can steer me in another direction telling me why I'd love to hear from you.

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