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East Penn to Lose $160,000 to Hockey Arena Project

East Penn Board of School Directors finally learn how much they will lose in tax revenue to Allentown's controversial Neighborhood Improvement Zone.

The 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 .

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.

Robert Sentner June 13, 2012 at 11:35 AM
They got these numbers by 2012 first 1/4 EIT numbers. There is a gigantic hole in the ground, there is no business, this is just a drop in the bucket lets see what the number is once the hotels. arena, Health network, and whatever other business's Riley can poach from other municipalities. Then we will see what the real impact is going to be on the school districts and municipalities. Good old honest Pat and Ed will be laughing at all of us all the way to the bank.
Lower Mac Resident June 13, 2012 at 12:47 PM
If this hockey arena is such a good idea and all these large companies are willing to help put this into action then the city of Allentown needs to find private citizens and companies to fund this, it can't be hard right? This is a great idea right? so stop stealing from the outer communities to fund something that you feel is a good idea. And I'm positive, if someone other than Stolz would have recommended that East Penn join this lawsuit then the school board would have voted yes, but God forbid the school board think that Stolz has a good idea...that would go against their beliefs, this board is a bunch of wimpy clowns
truth seeker June 13, 2012 at 02:22 PM
The posible effect of the NIZ on the budget is yet another reason to keep a healthy reserve. Of course that might upset anybody or any groups who are already campaigning for the next school board election cycle. Beware of those who pander in the short term
Ron Beitler June 13, 2012 at 05:48 PM
his is same I posted on Parkland but with Emmaus numbers.. Quick math: This equals only about 0.13% of the entire operating budget for 2011-2012 0.13 % lost. Thats little over 1/10th of 1% Everything needs to be put into perspective. The Emmaus school district budget is approx 120 MILLION dollars. Now in a time when every single dollar counts I understand the frustration. And I take MAJOR issue with the way this whole NIZ deal came to be. But, the fact is we have a giant hole in the ground in downtown allentown. You can bet surrounding communities will feel the economic impact if this hole stays vs. the plan proposed. The compromise is fair. I have issue with this specifically the way it was snuck into legislation, but the fact is.. we're past the point of no return now. You have to weigh the cost of fighting, the fact that it's .13% of the total budget with economic impact on the entire region. You must weight the negatives of a huge hole in the ground in our important regional core and economic impact of this giant hole with 1/10th of 1% of your entire budget. I feel the same way about LMT's lost EIT. The time to fight this was when it was being snuck through.
Lower Mac Resident June 13, 2012 at 06:20 PM
http://getoutofdebt.org/43854/youre-getting-poorer-why-debt-least-your-concerns
Steve Godusky June 14, 2012 at 12:35 AM
Just another case of our stuck up board members having there way (the ones with no guts and can't say no) of letting our money go out the window. It's easy to spend other peoples money.
Ron Beitler June 14, 2012 at 01:04 AM
The school board directors much like every district and every municipality had no idea this was coming. They had no way of knowing. That's my whole issue with this whole situation.
Bob Reid June 14, 2012 at 03:28 AM
The Mayor of Allentown has grabbed taxpayers money and no one knew this was coming? And now the lawyers are getting rich. This whole thing stinks and it all falls on the Mayor!
Ron Beitler June 14, 2012 at 03:42 AM
And state senator pat Browne
taxed-enough June 16, 2012 at 01:43 AM
Julian Stolz, thank you for saying exactly what I was thinking when I read this headline! East Penn is very fortunate to have you sitting on the board, and keeping it real.
JT June 21, 2012 at 04:33 AM
I'm confused, how does the Lower Macungie Earned Income Tax affect the school district? I get a seperate School tax Bill. Does the township give some of their EIT to the school district?
Ron Beitler June 21, 2012 at 12:08 PM
Separate, but both have a % taken away by the NIZ

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