Ongoing dialogue about the tax issue.
Last week, I posted about Home Rule Charter. It’s the lynchpin of Commissioner Conrads proposal to replace property tax with an increased earned income tax. The problem is almost no one understands what Home Rule Charter is. Including myself until I started researching it. I’m still learning. As I outlined last week it’s a complicated undertaking. There are positives and negatives. One negative being it is not easy to initiate. It takes both time and alot of money. I thought it was important to get people thinking about Home Rule.
Today, I wanted to spend some time talking about arguments I’ve heard in favor of property tax. It’s important to present both sides of the argument. To understand the argument, we need context. 4 years ago, the township refused to fight a quarry proposal and instead engaged in a Memorandum of Understanding that resulted in 700 acres of farmland (Over 1 square mile) rezoned to mostly industrial.
Industrial and Orlic = Distribution warehouses. In this case, large distribution warehouses. This is our new reality.
The pro property tax argument centers around our growing inventory of commercial and industrial development. Since we’ve gone down this road with no turning back some argue warehousing is a key to our fiscal equation. Much like Upper Macungie. This, in my opinion becomes the most compelling counter argument for a property tax.
To put it simply, the EIT plan let’s warehousing and large commercial shopping centers off the hook.
Remember, there is no single use in the entire township that generates more liabilities than distribution warehouses. Under Ryan Conrad’s proposed plan warehousing contributes very little to Lower Macungie’s tax base aside from LST and one time windfall.
You can further assume that a large number working at these large distribution warehouses are folks from outside the township. (evidenced by LANTA’s push to expand lines to them) Because of this we capture little EIT from employees locally.
I have a hard time trying to reconcile warehousing paying so little in local taxes with my belief that development should pay it’s own way over the long term. Residents should not carry the bag for industrial and commercial development.
Here are some numbers to think about. Under .33 mil property tax proposal.
A 200,000 residential home: = 66.00 in property tax
8,000,000 Shopping Center (Trexlertown mall) = 2,640.00
*24,000,0000 Industrial Warehouse: = 8250.00 in property tax.
*74,000,000 projected value of Hamilton Crossings: = 24,420.00 (/2 with TIF = 12,210.00)
*Assessed values based on County website
**Based on TIF narrative
Here is my question to residents:
Now that Commissioners have doubled down on warehousing, isn’t it sort of crazy not to cash in?