Author Archives: admin

About admin

Born and raised in Lower Macungie Township in the village of East Texas. B.A. in Political Science from Slippery Rock University. Co-owner of Bar None Weddings & Entertainment. I love and care about my hometown and frequently blog about local issues that I think are important.

Mission creep in preservation efforts.

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Over at ramblings Bernie is writing a series on issues that arise when otherwise well intentioned open space preservation programs experience mission creep. Good stuff. Brings up lots of very good points.

“Northampton County’s Open Space program is designed for farmland preservation, environmentally sensitive land and municipal parks. Like kissing babies, it’s politically popular. In many instances, it is also the right thing to do. But there have been questionable decisions like the preservation of cliff lands and swamps that could never be developed…”

There are many reasons to preserve open space. The one I focus on and that you would think all should agree on regardless of political persuasion is keeping taxes low. Want to keep taxes low? Preserve farmland.

When a local program strays from a focus on the preservation of developable properties – preferably actively farmed since it’s a form of industrial infrastructure – there is potential for mis-use of public funds. The number one criteria should be preservation of developable land where otherwise low value land uses like warehouses could be built. In other words land uses that do not provide a net financial gain for localities and generate very few jobs/acre and low revenue/acre vs. the new taxpayer funded long-term municipal liabilities created.

Preservation of natural resources is also a worthy goal. But I’m convinced the priority for local municipalities should be developable properties and farmland since you can justify use of tax dollars with lifecycle cost analysis of farmland vs. the alternative. There are other programs and ways to preserve the natural resources.

 

Assessments for calculating property taxes.

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After a meeting where the township blindly took on another long term financial obligation to maintain a storm water basin with zero accounting of the real dollar costs…It’s clear the township needs to bring in a professional consultant who does lifecycle value per acre evaluation if we cannot do it consistently in house. We have to make officials responsible for choices they make by demonstrating clearly long term impact. My friend and former Commissioner Deana Zosky was the first and only person who talked about this kind of stuff in Lower Mac. Economic growth should build on a foundation of understanding the tax implications of differing choices. We do not have that foundation today and it was on full display last Thursday.

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As I write often here, we rarely don’t at all consider land uses in terms of the value/revenue vs. the financial liabilities the taxpayer assumes. The calculus often gets muddled since the school district would love for us to chase certain types of low value greenfield development since it’s “windfall” for them. To that end EPSD is about to sell a chunk of land for low value strip development off Lower Mac Rd. (in part we are to blame since our urban zone allows poor built form) End of the day though, can you blame the district? It’s a logical reaction to a broken system with systemic problems including but not limited to pensions, inconsistent state funding etc. Most of all however it’s the fact the municipality has to pay for municipal services. Not the district. These include roads, stormwater, public safety etc. The township takes on the obligation to provide all this. So with every low return greenfield development the district gets the unencumbered windfall but the township gets the long term financial liabilities. It very much is a rob Peter (township) to pay Paul (EPSD) scenario. Even bigger picture, the windfalls really amount to nothing more than band aids as long as we keep our heads buried in the sand and do not address underlying issues. (enter dog chasing tail visual) But back to topic. . .

Looking exclusively at municipal side. Municipal residential taxpayers are the ones who really get throttled in our system. It’s amplified when we do not account for lifecycle costs. The way we calculate assessed values is one more of many fundamental issues. Assessed value determines what your property tax burden is. In the system we have today there is a fundamental in-balance in terms of how much responsibility is shouldered vs. impacts created. 

Think about this for a second:

An average single family home in a subdivision in Lower Mac:
(used an average assessed house on wheatland dr. as example)
Square feet: 2,128
Assessment calculated at: $256,700
This means the homeowner pays about 120 dollars in assessed value per SF

Example of an existing warehouse in the township:
Square feet: 1,000,000
Assessment calculated at: $24,100,000
This equals 24 dollars in assessment per SF

So basically, a residential homeowner is paying 6X the tax liability per square ft vs. a warehouse. This is insane. A residential single family home maybe generates 4-6 car trips a day. Sits on maybe an acre of land. Compare to warehouses that generate massive public liabilities, create mind boggling amounts of traffic, huge amounts of storm water discharge, require super-sized – and massively expensive road improvements – and most disturbing each million plus warehouse churns up 60 acres of land. In Lower Mac’s case prime farmland. All while generating extremely low jobs and revenue per acre vs. other more community friendly neighborhood commercial uses.

The problem is an assessment calculation system that heavily weights market value as a determining factor. Market value has little to nothing to do with impact. Why should a homeowner be punished for adding a deck? Does that somehow increase the amount of traffic your home generates? The amount of stormwater? The kids you have in the district?

When you dig into this it’s maddening. It is a totally broken and backwards system where the highest liability land uses pay the least amount in taxes apples to apples in relation to the impacts they create. Road wear and tear. Stormwater run-off. Public responsibility to maintain infrastructure. Muni services. Again, this is top of mind since we just blindly took on a new storm water basin with ZERO information about long term costs. A stormwater basin that would have never existed in the first place had the township been able to maintain it’s growth boundaries of the 80’s. Now that we have it I’m interested in how we pay for it. That’s what this conversation is all about. What land uses shoulder the burden.

As I always ask: Whose subsidizing who?

It’s not just about fundamental in-balance. Again, in the current system if you take a dilapidated building and fix it up. Or start a business and consider converting to commercial. What happens? You get punished for it tax wise. But the greenfield developer who gobbles up huge amounts of land, requires new public infrastructure, creates very low jobs/acre and revenue/acre vs. other other massive liabilities. They get rewarded.

RELATED: Gaming the system makes it worse – Big Box stores ringing up property tax discounts.

There are very real underlying financial issues where the deck is stacked in favor of greenfield development and other stealth subsidies that drive sprawl. The way we calculate assessments is one aspect. We need to calculate assessment based on land + Impact. Not buildings or building improvements or building quality.

 

Lower Macungie Agenda Preview – 6/18

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FYI –  In these previews I may indicate thoughts on an issue, but it in no way means my mind is set. During a critical hearing for the Jaindl issue, a Commissioner spoke before public comment outlining he was voting to move forward the project regardless of what people said during public comment. That was wrong. Public debate was circumvented when the Commissioner indicated his mind was made up.

My hope is by blogging I open the door for conversations before issues are settled. One of my biggest issues with the Jaindl debacle was folks didn’t truly understand what was happening until it was “too late”. This is one mechanism to avoid that. I hope people find it useful. 

Hearings:
Trexler Business Center
The issue is we have a grandfathered application under an old shopping center ordinance. Since the original application the plan has changed but the applicants argue not enough to require a new submittal under the current shopping center ordinance. (which is much better)

The second iteration of the sketch is improved from a traffic standpoint, but I worry that we have less leverage to improve the internal design of the overall plan under the old inferior ordinance.

The goal is to have all new shopping centers in the township at the same level of quality or preferably even better than Hamilton Crossings. The problem here and what we have to consider tonight is whether or not we are legally obligated to consider the plan under the old ordinance. And also if Mr. Jaindl is willing to commit to working together to improve the current plan. It’s my opinion there is alot of room for improvement.

Here is the sketch:

The question is whether this plan is fundamentally different from the original submission.

The question is whether this plan is fundamentally different from the original submission.

Here is an abridged list of items I’d like to see addressed summed up in 4 categories:

  • Improved context sensitivity with Hamilton Blvd as outlined in the corridor vision study.
  • Much improved pedestrian Interconnectivity with the project. Walkability is more than just the physical sidewalks.
  • Amenities package on the same level as Hamilton Crossings
  • Assurances that the traffic improvements will remain as in the sketch

 

Jaindl & Liberty Building Permits.
This one is a complicated one to sum up. I will try to do so succinctly. Basically the issue is as a requirement of the Spring Creek Properties settlement agreement all traffic improvements on Spring Creek Rd. are to be in place BEFORE certain permits that trigger additional traffic are issued. Originally Mr. Jaindl requested flexibility on that issue. Over the last couple days there has been a flurry of updated memo’s. I would have been hard pressed to support the original memo since it represented a fundamental departure from the original settlement agreement designed to protect the community by ensuring the roadways can handle traffic BEFORE development takes place. Staff also expressed serious reservations. Making sure improvements are built before truck traffic comes from warehouses is a lesson we learned the hard way over the last few years at Schoeneck & Rt. 100.

This will be an interesting discussion tonight. It boils down to if our professional staff – legal, planning and engineer are comfortable with the latest iteration of the proposal. The fundamental question being – Does this protect the township from unfinished improvements? They were not comfortable with the original proposal. It remains to be seen if staff is with the latest proposal. This issue has been fluid all week. As commissioners however our duty is crystal clear. That is to make sure the intent of the settlement agreement remains intact and rock solid. I will rely heavily on our internal legal, planning and engineering experts to make that determination.

Plan approval for Liberty at Millcreek.
This is approval for two very large warehouses off Millcreek Rd. on what is now Air Products property just off the bypass. Most of this project is un Upper Macungie and unfortunately (inexplicably..) they have this area zoned for Industrial. I’d have no problems with Industrial the same scope as Air Products but this isn’t the best location for a warehouse since our area is over-saturated.

Unfortunately, since this is largely in Upper Macungie it is out of our control. I am very nervous about these two warehouses but we are left with very little leverage. Fortunately, I do place a good amount of faith in Liberty properties. Though I disagree with the land use in this location, I am happy it is Liberty developing the property. They have been great to work with. It’s important they get this right as it will be an industrial warehouse in the middle of our boulevard.

Engineering
Schoeneck Rd. long term maintenance of stormwater controls.
To sum up we are being asked by a developer to take long term maintenance responsibility for stormwater controls. I have concerns with this as it represents a long term financial responsibility for taxpayers. This is a fundamental problem in the township. Over time we are accrusing more and more long term responsibilities to maintain systems that will increase in cost over time. We should be very careful taking on even more we don’t absolutely have to. 

Authorization to advertise 7871 Mtn Rd. in Agriculture security zone.
A step to preserving 50+ acres of farmland off mountain Rd! Purchase of these development rights will be done entirely with county money. Inclusion in the townships ASZ is a step in the process. This land will forever be permanently preserved. The first 50 acres of I hope a couple hundred over the next 10 years.

Brake retarder study on Rt. 100
This is a resident request that I support 100%. This is one of a number of items we have to get a handle on as truck traffic is going to essentially double in the township. The study will hopefully result in a prohibition of brake retarders on Rt. 100.

If your not familiar it is this sound: (:23 seconds) Jake brakes is using the engine to brake a truck. It’s a safety feature for stopping on long hills. It saves the mechanical brakes. Problem is sometimes truckers abuse them and utilize them on flat roads near residential communities.

Big Box becoming more of a terrible deal.

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From the Institute for local self reliance: About ILSR
For Cities, Big-Box Stores Are Becoming Even More of a Terrible Deal.

#DoTheMath – Couple of takeaways from this:

1. We have a potential dark store issue in Lower Macungie. Since.

“It’s an established part of the big-box retail model that the boxes themselves be custom-built, cheaply constructed, and disposable. If retailers decide that they need a bigger space, it’s cheaper for them to leave the old one behind and build a new one.“

This is happening in Lower Mac right now with Weis. They are currently in the process of abandoning their current store to build a new one – across the street. This opens the possibility for Weis to argue the “dark store” method for calculating tax assessment.

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2. Even without assessment reductions box retail isn’t a fiscal winner for local communities. The reduction strategies happening in some states just make it worse.

When eight communities in central Ohio looked at the fiscal impacts of big-box retail, they found that the stores actually demanded more public services than they generated in revenue, and created a drain on municipal budgets to the tune of a net annual loss of $0.44 per square foot, or about $80,000 for a typical Walmart supercenter. 

Mark my words, our increasingly boxy/strippy Hamilton Corridor will be the driver for local police and a massive unavoidable tax increase: 

“Higher demand for police departments is one example. In Port Richey, Fla., nearly half of the town’s crime emanates from the area Walmart. “The taxes that come from Walmart are not even enough to cover two police officers’ salaries,” Police Chief Robert Lovering told Vice.”

It’s happening in Lower Mac today.

3. With Hamilton Crossings we are beginning from an even bigger hole. Throughout the HC discussion it was parroted that the windfall was worth the tax gimmick. The narrative was: “There is nothing now, when something is built we can tax it”. Problem is what we approved costs us much more then what’s there now – fallow open space. And the new tax revenue won’t cover the long term liabilities. Our problem is the fatally flawed short term way we look at municipal finances.

“Cities and towns continue to buy into myths sold to them by the mega-retailers themselves, that big-box stores spark economic development. In service of this myth, local and state governments across the country have granted at least $2.6 billion in subsidies to just six large retailers, including $160 million to Walmart and $138 million to Lowe’s, according toanother study from Good Jobs First.  That’s without factoring in the cost of services, which as Marquette, Mich., saw, can pile up”

We got to start thinking beyond the windfall and look at lifecycle sustainability. That is: Lifecycle costs (liabilities) vs. revenue (tax base). I am not arguing for a valuable corridor to be vacant. This isn’t about NIMBY. My argument is a financial one. We need to build better. Smarter. Patterns that create positive value. But since at least with Hamilton Crossings that ship has sailed….

4. Living in reality. What’s done is done.  Can’t change the fact 3 members of the current BOC opted to hand out a 20 year tax subsidy. So, moving forward our strategy has to focus on repair and triage. We accomplish that with balance. First by preserving farmland and open space concentrating on places where expensive infrastructure would have to be built and maintained by taxpayers to support greenfield growth.

Second, we encourage better/smarter growth in patterns that creates higher value in locations where infrastructure exists. We get there by fixing our terribly archaic and restrictive zoning code. By instituting aspects of a form based code we allow and even incentivize more “Main Street” oriented walkable neighborhood mixed use devleopment on Hamilton Boulevard.

The land development alternative – What does that mean? Lower Mac is working on a vision.  Here is an outline: Lower Mac’s Hamilton Corridor vision study. If we adopt and follow this plan we will induce more high value growth on Hamilton Boulevard. This is essential to balance the low value. More positive growth will help balance the net negative financial development.

“Locally owned retailers provide value to a community in many ways, but one of them is to the municipal accounting books. In a study that found that big-box retail generates a net deficit for taxpayers in a Massachusetts town, the researchers also discovered that specialty retail, like Main Street businesses, are the ones with a positive impact on public coffers, generating more revenue than they require to service.”

One thing to watch is avoiding falling into the pitfalls of “smart growth light” like we have in the past. #WordsHaveMeanings.

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The taxing alternative – Shift the burden off residents and onto warehouses and box stores.

Watch Lower Meetings Live on RCN starting tomorrow.

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Another step in the right direction transparency wise. There is now one less excuse not to follow your local government here in Lower Mac.

Lower Macungie commissioners taking meetings to live TV

We’re going live! Proud to be the first Valley municipality to take this step. Tomorrows meeting (6/18) will be the first broadcast live in real time on RCN cable at 7pm on channel 66. Here is a link to the agenda. Best of all costs us nothing thanks to RCN.

Can’t watch tomorrow? No worries, meetings are repeated on a regular schedule on the public service government channel. And as always, you can watch the meetings on your own schedule always at the township website and youtube. Link to the LMT youtube channel.

Other muni’s do it live on webcast (Easton SD and Northampton County Council) but we’re the first to do it on TV! Each year more and more webcast. (What are we waiting for EPSD!!)

We hope to get the broadcast on Service Electric Company soon also. Let’s get it done Service Electric!

Lower Mac to talk official map as preservation tool

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In the coming weeks the township will be considering an official map. This is something I support since the official map tool greatly increases the likelihood that key conservation resources are protected.

Designation of a Official Map allows a municipality the ability to delay development of a property for up to a year so the municipality can inquire about acquisition of the property for preservation or other public uses outlined by a comprehensive plan.

Designation of a Official Map allows a municipality the ability to delay development of a property for up to a year so the municipality can inquire about acquisition of the property for preservation or other public uses outlined by a comprehensive plan.

An “official map” is an ordinance and map designed to carry out a community vision set forth in comprehensive plans. As a preservation tool the teeth of the official map lie in the powers granted by the state which give a community essentially what amounts to as a “pause” button. This can be used when poorly planned development contrary to the comprehensive plan is proposed on land designated on the map. The map outlines planned future public lands and facilities including transportation, parks, trails, and preserved open space. By utilizing the “pause” button functionality of the map the township gives itself the ability to delay a poorly planned development proposal for up to one year. This gives us valuable time to investigate acquisition or preservation. Another way to put it is the map represents a “first dibs” option on an identified piece of land for public use. 

Currently, 65 municipalities in 15 counties utilize official maps. Locally, Upper Milford and Upper Saucon have adopted map ordinances. I believe it is one of the critical 3 tools that Lower Macungie needs to pursue an aggressive preservation program. The 3 tools are:

  • Comprehensive planning – To outline priorities. We have these.
  • Official map – To protect outlined priorities from bad development proposals by giving the township time to negotiate when faced with a poor development proposal.
  • Funding mechanism – To acquire or purchase development rights. Purchasing development rights or outright acquisition is the only fair way to preserve farmland and open space.

According to the MPC, and a little common sense designating a property on the official map does not constitute a taking. This is a concern sometimes expressed by developers and landowners. The official map doesn’t take property it just gives us the opportunity to negotiate purchase or preservation of a property before poorly planned development occurs. It is up to individual municipalities how best to accomplish goals. In most cases it happens through fair market compensation. Exceedingly rare is it for a municipality to ever use condemnation. When it does come up it’s usually to secure new roadway right of way. It’s not something I would ever support.

Nuts & Bolts:
1. Reserving land for future public use on an official map does not affect the property’s ownership. Landowners still own and control their land.

2. The “pause button” is only invoked if a poor development proposal is made on a property on the official map and the proposal is counter to comprehensive planning.

3. After notification of intent is sent by the township the powers granted by the state allow them one year to act. During the one year time span, the municipality may opt to put together a plan to acquire or preserve the land.

4. In the vast majority of cases acquisition or preservation is accomplished by paying fair market value. This is the only fair and permanent way to preserve.

5. The municipality also maintains the option to not acquire or preserve the property and allow for the property owner to move forward with proposed development plans. However, the official map can be an effective negotiation tool that the township can use to encourage a better more friendly proposal. It can help to ensure development – when it occurs – is compatible with and supportive of community goals.

Local example Upper Milford: Our neighbors to the South in Upper Milford have an adopted official map. Recently, they had a land development proposal for 200 units on a property off Mill Rd. Since the property is on the townships official map and the township expressed interest the project can now be delayed one year as Upper Milford investigates preservation options. It’s unknown whether they will or not, but what’s key is the ability to have time to explore options. If Upper Milford decides not to acquire the property, the development proposal can move forward as planned. The township can also negotiate a much more community friendly proposal like a true conservation cluster project using the acquisition leverage of the official map.

written comments sent to PA DEP – Lower Milford Quarry application

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Colleen Connolly – Community relations coordinator DEP, NE regional,

This correspondence is in regard to a recent public hearing on 127 acres in Lower MilfordTownship that was the subject of a DEP hearing last week relating to a quarry application. Please consider this a formal submittal of comments related to the Geryville materials quarry application hearing.

My name is Ron Beitler and I am a Township Commissioner in Lower Macungie Township. I am speaking from my position but not for the entire board. While others share my viewpoint, our board as a whole did not take formal action.

As you may know, Lower Macungie is a regional planning partner of Lower Milford. As a community we are well aware and sensitive to the fact that air and water quality matter across municipal boundaries. Therefore the DEP ruling – pending the outcome of the local proceedings – will impact Lower Macungie in addition to all our municipal planning partners.

First it’s important to note that the courts have upheld time and time again the notion that a community has a right to protect its natural features. Not only is it a local responsibility, but an obligation outlined in the state constitution. Therefore the issue of Lower Milford being permitted to protect it’s natural resources is, I believe, a matter of regional concern.

Article I Section 27 of the Pennsylvania constitution states: The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.
Here are two of the most important points to consider:

  • The Lehigh Valley Planning Commission has listed the Mill Hill area as a high priority preservation site in the regional Comprehensive Plan as well as in the Natural Features/Greenway plans. Mill Hill has over 600 acres of contiguous woodlands with deep woods and wetlands.
  • Bog Turtles as well as several types of breeding trout have been found on or directly adjacent to the site.
In addition to very clear regional implications a quarry at this location would also adversely affect our neighbors to the south of us in terms of compatibility with Montgomery Counties comprehensive plan.
 
For these reasons and others to numerous to list I urge the DEP to reject Geryville materials quarry application. 

Furthermore, Geryville materials should be ordered to cease any activity on the land with the potential to disrupt the regionally significant natural features located on the site.

Thank you for your time,
Ron Beitler – Lower Macungie Township Commissioner

CC:
State Rep. Hon. Ryan Mackenzie 134th district
State Rep. Hon. Justin Simmons 131st district
State Sen. Hon. Pat Browne 16th District

Do cyclists pay their fair share?

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I have to applaud PennDOT efforts to raise awareness about cycling on the road network lately. In PA, on our roadways responsibility is a two-way street. Both cyclists and motorists need to be aware of and follow the rules of the road relating to cycle safety.

Last couple months I’ve noticed once a week PennDOT has been making really nicely crafted social media posts aimed at cycle law awareness issues. Here is an example:
Screen Shot 2015-06-03 at 12.26.23 AMUnfortunately whenever a post like this is made a very small but vocal and extremely uninformed minority of commenters always follows with a litany of silly posts.

One of the most common and most uniformed narratives is usually along the lines of: “Cyclists should have to pay for plates, registration, inspection and insurance like every other vehicle on Pennsylvania roadways“. 

Couple problems with this sentiment:
First, cyclists do pay their share. Actually they pay a far disproportionate share. Here are the facts:

  • User fees (license, registration etc) pay for only 34% of the costs of roads in Pennsylvania. The rest comes from general funds that cyclists also pay for.
  • 80% of cyclists also own cars so 80% also pay the user fees associated with those cars.
  • A bike has 1/20th the impact of a car on the roadway. This includes funding for bike facilities. (which usually just involves moving paint around)

Essentially, when a motorist makes the decision to bike instead of drive they are saving us ALL. Because 1.) They also pay the bulk of costs to maintain roads. Pair this with 2.) bikes require significantly less expensive specialized facilities and 3.) cyclists create a fraction of the impact.

So basically, as a driver and taxpayer… next time you see a cyclist take a moment to thank them. They are mathematically doing their part to keep your tax burden lower in a number of measurable ways. If it were a fair world they should probably get a rebate for cycling since they save everyone alot of money when they ride.

The true costs of the Lehigh Valley Warehouse Economy.

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Lots to chew on in this eye opening post from Joe Cortright, President and principal economist of Impresa, a consulting firm specializing in regional economic analysis, innovation and industry clusters. The subject – the true costs of a high concentration of freight traffic – is ultra relevant to a Lehigh Valley that has gone “all in” on logistics warehouses.

Remember, in the next 5 years we’re planning on spending 250 million+ dollars – strike that guess we are up to 800 million+ dollars – to widen Rt. 22.  When it’s all said and done the nearly – and likely eventually to be over – billion dollar mega-project is a response to projections that the Valleys freight traffic will double in the next 20 years.

Focusing on that freight traffic a moment…According to the Congressional budget office: “Truck freight movement gets a subsidy of between $57 and $128 billion annually in the form of uncompensated costs, over and above what trucks pay in taxes”

The widening of Rt. 22 is a big part of that taxpayer subsidization of the warehouse industry. Remember, the bulk of 2.5 billion coming to the Valley is a result of the +.28 gas tax bandaid and other increases in other user fees in Pennsylvania. Increasing gas taxes is a well I’m convinced we’ll be perpetually pressured to dip into over and over until we fundamentally reform the way we fund roads. It is a short sighted bandaid that I’m happy many local reps voted against.

Smart growth is making sure the balance of land uses in your municipality generate enough revenue to mitigate the costs of liabilities. This is a fundamental way to keep property taxes low long term. With the Valleys warehouse economy we unfortunately have a concentration of buildings that not only don’t pay for themselves but rather generate massive un-funded liabilities. Now, school districts salivate over these mega shell buildings of course. (A rational but also desperate response to a broken and inequitable education funding system.) Problem is, in the grand scheme chasing warehouse revenue is basically robbing Peter to pay Paul since the decrease in school taxes is negated with a disproportionate increase in municipal and other taxes. Here in the East Penn area warehouse developers actually double dipped since the East Penn School District was hoodwinked into paying for a major multi million dollar local road expansion.

What’s the answer? Well for one right sizing the revenue we collect from high liability land uses. Problem is in PA we have very little in the way of tools to do this locally.

Now someone inevitably always says, “well you shop Amazon”. Yes, I am guilty. Love Amazon. But as Joe Cortright points out if the subsidy plug was pulled then shipping companies would naturally and creatively respond. That’s how the market works. Personally, I would gladly pay a little more for my weekly amazon packages. The doorstep convenience would still be well worth it.

I’d also realize savings elsewhere since it’s likely any cost increases to my Amazon bill would also be offset since massive subsidies:

  “-borne by all of us – would go down by a comparable amount. And there would be important savings in costs for freight either moved by other modes (especially rail, which is about two-thirds cheaper), or sourced from closer locations.”

“If trucking companies paid the full costs associated with moving truck freight, we’d have less road damage and congestion, fewer crashes, and more funding to pay for the transportation system.”

In other words, take away the subsidies and force the shippers to get more innovative and efficient. These innovations are coming someday anyhow but with the massive subsidies in place the industry is not motivated.

 

Considering TIF at Lehigh Dairy site – use the “but for” test

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Lehigh County Commissioners heard a presentation by the Whitehall Township director of Industrial and Commercial Development outlining a proposal to consider utilizing a TIF on the long vacant Lehigh Dairy site.

Without a TIF would we see desirable economic development on this site?

Without a TIF would we see desirable economic development on this site?

I don’t know much about this site other then it’s the potential centerpiece for redevelopment of a long declining section of Whitehall corridor that serves as a gateway to the City of Allentown with immediate highway access.

As for TIF’s I’ve outlined in detail here over the last year what fundamental criteria for their application should be. That is the “but for” test. The name comes from the expression, “economic development would not occur but for the use of TIF.” In other words do you get desired development in a municipality, or a more specific corridor unless support is available from TIF.  (or insert whatever ‘ABC’ tax tool)

If desired economic development (justified by dollar and cent calculations *not to be confused with a specific proposed development) will happen without TIF, then TIF should not be considered or used because it would cost taxpayers over the long run.

As an example, in Lower Macungie the TIF for Hamilton Crossings was very clearly not at all necessary to induce desired economic growth in our community. Certainly not at all along the Hamilton Corridor. *Note, that today without any TIFs we have sketch plans floating for 2 more new large strip malls. One that could rival Hamilton Crossings in size. Both without using government assistance. Furthermore, after the County refused the Hamilton Crossings TIF and the project still moved forward it became crystal clear – at least for Lower Macungie whose portion was less significant then the county – that our fractional portion of the TIF would never have stopped the project had we not agreed.

Using this as a lesson, the first question County Commissioners need to ask is “but for” this assistance do we get desired economic RE-DEVELOPMENT of this gateway corridor? With Hamilton Crossings, the County got it right. They need to ask the same questions here. I don’t know what the answer to that is. But if the answer is yes, we stop right there. Reserve TIF’s (and other economic development tools) for where they are needed as a last resort. To use them otherwise is picking winners and losers. Not a business the government should involve itself in.