Palmer Township Joins Suit Against Allentown Hockey Arena

The voted Tuesday night to join two other municipalities in a lawsuit against earned income taxes going to Allentown's .

"We have to get involved," Supervisor Bob Lammi said. "I think this has to be challenged in the courts."

Palmer officials have expressed frustration with the city of Allentown and the state Department of Revenue after inquiring how much of a tax impact Palmer Township might face. Both of those requests failed to provide the information.

After supervisors were provided with legal counsel from solicitor Charles Bruno, Township Manager Christopher Christman recommended to supervisors that they join the suit provided they don't go over spending $10,000 in legal fees.

Bethlehem Township and Hanover Township have filed a lawsuit challenging a special state law allowing Allentown to retain earned income taxes of people who work within the city's Neighborhood Improvement Zone. Last week, decided not to join the lawsuit.

The lawsuit challenges the constitutionality of the creation of the zone. Lammi said he hopes that joining the suit will prevent any other municipality from taking the same route as Allentown.

He also said the fact that Allentown could collect for 30 years was also worrisome.

"Not knowing how much, we may need to get the money from somewhere," Lammi said. "That would mean to raise taxes. We can't live without that revenue."

Supervisors Chairman David Colver said the decision wasn't made to prevent Allentown from building its hockey arena.

"We have seen what the Iron Pigs stadium has done for the Lehigh Valley," Colver said. "I think Palmer is a big player in that development of the Lehigh Valley. At this point, we have no choice but to get involved."

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.

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

"It's not right for them to take our tax money," Supervisor K. Michael Mitchell said. "We've got to fight it."

Supervisor Robert Smith agreed.

"There was no representation from us regarding this decision," Smith said. "We have a responsibility to represent the residents of Palmer Township."