Borough Manager Discusses Impact of EIT Collection on Emmaus

The new Emmaus Borough Manager publicly celebrated his 30th day on the job at last night’s Emmaus Borough Council meeting with a report on Earned Income Tax collection that demonstrated both a black cloud and a silver lining.

Shane Pepe, who officially began his career as Emmaus Borough Manager on Jan. 23, pointed out that there’s been a lot of controversy lately regarding EIT collection, particularly regarding the Allentown Neighborhood Improvement Zone (NIZ) where the hockey stadium is being constructed.

Many people are “very adamant about fighting something that is probably too late to fight, since the bill has already been passed,” Pepe said, of the NIZ. “People are upset about the bill, saying that it was snuck through without consulting any of the municipalities that it affects.”

Pepe said the loss of EIT to the borough due to the NIZ “may be significant, although we don’t have the exact amount yet.”

Based on the best current estimates, which link 96 businesses in the NIZ, including PPL, to the borough, the borough may be out about $30,000 a year in EIT for the next 30 years, Pepe said. “We probably have a chunk of our residents working in the zone,” he said.

The silver lining with respect to EIT relates to a lawsuit in the works pitting the city of Philadelphia against surrounding municipalities. Philadelphia charges 3.5 percent EIT, while most municipalities, like Emmaus, charge one percent, Pepe explained.

The residents who work in Philadelphia are using this as a "tax credit" so that they don’t have to pay EIT to their hometowns, he said. Ultimately, this could bring about $500,000 in EIT back to the Lehigh Valley, Pepe added.

“There is a chunk of that revenue that could come back our way if they are successful in that litigation,” he said. “That is something to keep our eyes and ears on.

“I think the battle rages on with this whole issue,” Pepe said.