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Politics & Government

Palmer Officials Worry About Allentown tax Plan

Palmer officials file a Right to Know request with Allentown to find out the tax impact on the township of the city's new arena project.

officials are not pleased about residents' earned income taxes going toward construction of .

While the township hasn't filed suit like , Board of Supervisors Chairman David Colver said Palmer Township has filed a Right to Know request with Allentown for an explanation about what the impact might be. He said the township not received any information it requested as of yet.

"You never say never," Colver said regarding a lawsuit. "We want to bring the board up to speed."

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Last week, Lower Saucon Township and Bethlehem Township joined Hanover Township in filing a lawsuit challenging a special state law allowing Allentown to retain earned income taxes of employees who work within the city's Neighborhood Improvement Zone.

The zone will help Allentown build a hockey arena and redevelop other parts of its downtown and waterfront with an estimated $550,000 in earned income taxes coming from surrounding municipalities and school districts.

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"Supposedly studies have been done about how many new jobs this project will create," Colver said. "But how do we know how many people working there will be from Palmer Township?"

Under ordinary circumstances, earned income taxes paid in the municipality where someone works are forwarded to their home municipality where they are typically shared between the local government and school district.

Palmer Township Manager Christopher Christman attended a mid-March workshop as Allentown officials explained the tax concept to officials from neighboring communities.

Like the communities that have filed suit, Palmer officials want to know how much money they stand to lose.

Colver said that if the tax impact is substantial, then Palmer might ponder a lawsuit as well.

"We could really be hit," he said. "We have concerns. This was done without any input. We didn't know anything about it. If they had said they were doing this for a year or two to build the arena, then that's one thing. But they may be talking 30 years."

The Neighborhood Improvement Zone Development Authority will pay the debt service on bonds to finance a $158 million hockey arena and other development inside of that zone over the next 30 years.

Allentown officials have stated that the development program will generate enough revenue to pay the annual debt service over the next 30 years and still have a surplus, which would then be returned to the taxing entities in the proportion by which it was contributed.

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