Two Townships sue to Stop Taxes Flowing to Allentown Arena

Representatives of most of the municipalities, including Palmer and Forks with school boards of Lehigh and Northampton counties, met for the second time in the past month March 15 to discuss Allentown’s new Neighborhood Improvement Zone and its impact on their earned income tax collections.

But the discussion was short and uneventful because they are waiting for promised answers to questions submitted to Allentown officials last month. City officials have told leaders of the Tax Collection Committees of both counties that they are still trying to compile the necessary information.

“In my opinion, they are operating in good faith,” said Steve Miller, chairman of the committee. “They aren’t trying to stonewall.”

Nonetheless, two municipalities have decided not to wait for more information. The board of supervisors of Hanover Township, Northampton County, decided last week to file a lawsuit to stop a diversion of earned income taxes.

And on Monday, Bethlehem Township voted unanimously to join  Hanover's suit, according to The Morning Call.

Beginning this year, earned income taxes – for the state, local municipalities and school districts – 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, instead of being forwarded to the home municipalities of those that work in the district.

The most high profile of these improvements, right now, is a planned $158 million hockey arena at Seventh and Linden streets downtown. Demolition and excavation at the site is already under way.

There was no discussion of other taxing bodies joining the planned litigation.

The discussion among all the taxing bodies is expected to continue next month, though instead of meeting jointly – as they did Thursday and in February – the county Tax Collection Committees will meet separately.

The Northampton County committee is scheduled to meet on April 12 in . The Lehigh County committee is scheduled to meet April 19 at the Carbon-Lehigh Intermediate Unit.