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Are Challenges to Allentown NIZ a Good Idea?

Bethlehem Township joined Hanover Township this week in approving legal action to stop funding mechanism for arena project?

 

This week, Bethlehem Township to decide to sue to stop the application of local earned income taxes to Allentown’s Neighborhood Improvement Zone.

The NIZ, created in legislation written by State Sen. Pat Browne, R-16, is designed to provide a funding mechanism for revitalization of Allentown’s center city and western riverfront neighborhoods. The first project is to build a hockey arena that will be the home to the Phantoms, a minor league team to the Philadelphia Flyers.

Under the law, state and local earned income taxes from the 130-acre zone will be put into a special fund that will be used to pay for the  $158 million arena and other revitalization projects, instead of being distributed among the municipalities and school districts where workers live.

Local officials from the other municipalities in the Lehigh Valley are crying foul at the delay and likely loss of some of their income stream, that brought together representatives of government entities and school districts from across the Valley.

As a group, they have decided to do nothing as they wait for Allentown to provide . But two municipalities have decided to sue to stop the funding mechanism from proceeding as planned.

Proponents of the NIZ say the zone is necessary to provide funding and incentives for revitalization in center city Allentown and that as the region’s largest city goes, so goes the rest of the Lehigh Valley.

What do you think? Vote in our poll and tell us in the comments.

Jon Geeting March 23, 2012 at 11:48 AM
The lawsuit is completely frivolous and isn't going to go anywhere. Municipalities are creations of the state. If the state decides to change the tax laws for municipalities, which is what happened here, there isn't anything they can do about it. It's not like they have some legal right to the EIT revenue. Whatever the state does, they have to go along. This lawsuit is almost certainly going to cost more than what the townships are losing in EIT revenue.

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