Energy to Waste?
Greetings:
From yesterday’s Morning Call Allentown waste-to-energy deal may resurface.
Should we really be asking what are the pressure politics that are at play here?
This deal, promoted by Marcel Groen, “Democratic Bower broker,” is looking stranger and stranger. I have felt this way since the first day the project was presented. The claims look too good to be true,and if true, none of the documents yet provided convince me that is the case.
After some research, I also believe that Councilman Guridy might consider recusing himself from the vote since he works for the Delaware River Joint Toll Bridge Authority Commission while Attorney Groen is the Commission’s General Counsel. Julio is a good man. Nevertheless, in the time that I served on City Council, I was very careful to do the same (or at least announce there was a potential conflict) whenever there was a connection between my employment or community activities and city business. Such an assessment is useful in this case.
I urge council not to reconsider.
As always your comments are welcomed.
Michael
Capitalist/Marxist
Greetings:
Readers may revolt against this title, but the contradiction has bothered me for a much of my career. How does one reconcile the conflict between the benefits of capitalism and its legitimate criticisms?
Point/Counterpoint Morning Call Article
Greetings:
I read with interest the point/counterpoint article in the Morning Call. In a separate post, I commented on the position taken by Dr. Thode. I would like to comment on the position taken by Mr. Flemming.
Why do you support Allentown’s Neighborhood Improvement Zone and its tax provisions? How will it help Allentown, and surrounding municipalities?
My support of the Neighborhood Improvement Zone is directly connected to my belief that the Allentown arena project and the adjacent commercial developments are valuable to the whole Lehigh Valley region. The legislation is a tool that makes the project economically viable without levying new taxes or unreasonable financial obligations on the citizenry.
Unlike typical metropolitan areas that are structured around a single, major city ringed by suburban and exurban neighborhoods, the Lehigh Valley is made up of three small cities interconnected by suburban pockets. Our cities are connected to the surrounding municipalities in ways that can’t be ignored. Problems in the cities affect the suburbs just as an abandoned house affects the neighborhood it sits in. This is precisely why a regional approach to economic development became a priority here more than 10 years ago.
There are widely recognized benefits to having a vibrant and economically healthy city. Bethlehem’s continuing improvements offer a tangible example of how a safe and interesting urban area draws people and investment dollars to both the city and its suburbs.
Mr. Flemming raises the point of how the Valley is comprised of several sub-regions, each of which is important. To allow one to excessively decline would have serious consequences. However, I often hear people (including regional leaders) speak disparagingly about Allentown, as if they would wish it away. The focus always is classist or racist. A general hatred shows through, often.
What do you think of those who say that the local earned income taxes collected on workers in the zone, that would normally be passed through to NIZ workers’ municipalities of residence, should not be set aside to fund a downtown Allentown project.
I acknowledge that there are thoughtful citizens here who don’t believe that regional economic strategy is necessary or beneficial. They may believe that each township or municipality must act independently. As a lifelong resident of the Lehigh Valley who has lived in different municipalities, I have a different perspective based on my experience with creating jobs across the entire region.
Mr. Flemming shares my belief in the importance of regional cooperation. I was loud and clear with the mayor and others during my term on council that proper communication was necessary. Now that communication was not handled properly we face political fall out. That does not diminish the importance of revenue sharing for the benefit of the Valley as a whole. I would hope that Mr. Flemming would be chatting with the right people to correct the political fiasco that resulted.
Is it fair to other municipalities to ask them to forgo a portion of their EIT dollars for workers within the project zone to finance projects in the city?
The rules in the NIZ legislation that affect local earned income tax are unambiguous. They allocate the income taxes paid by residents [who work for an employer in the NIZ] toward the financing costs of projects inside the zone. This is limited to only those residents employed in the NIZ, and only to their local income tax. Not one cent from property or business taxes is taken out of the municipality.
Although it’s difficult to estimate how many residents of a given municipality will meet this condition, it’s reasonable to assume that they will represent a small fraction of that town’s working population. No one associated with this project that I’ve spoken to is anticipating that Allentown will become the center of all employment and industry in the Lehigh Valley, sucking up all of the jobs from the surrounding region. Rather, the goal of the NIZ is to produce a net gain in jobs and investment.
For the municipal governments affected, they may see a few cents on the dollar directed to NIZ projects. And this will be minimal in relation to their aggregate revenues.
While appropriate information has not been shared as well as it should have been, Mr. Flemming is looking at a bigger picture than are the critics. Like any business project, there is investment and a rate of return. Projects have risk, and I have written often about the fact that the risks here are low when compared with the potential benefits that could be reaped regionally. I do demand that the project managers soon release better estimates of the project costs and benefits, in particular, as I asked many times while on Council, we need a professional assessment of community development over time.
I would hope that Mr. Flemming, by acknowledging the broad impacts that are possible, would push project managers to focus more attention on community development.
What do you think in general about the state law that returns taxes on earned income to home municipalities? Should they remain in the municipalities where those residents work statewide?
This concept of allocating tax revenue from Salisbury, or Macungie, or even Nazareth to a project in Allentown is not without precedent. It is the same principle that underlies our entire income tax system. The state income tax dollars paid by a resident of South Whitehall are combined with other Pennsylvanians’ taxes to fund schools in Erie and police in Pittsburgh. Our federal tax dollars are pooled and distributed for services across the country in places like St. Louis and New Orleans.
The very basis of regionalism is a recognition that we live and work together in one community. Our public resources are best allocated when the community is viewed as a whole, rather than blocks of disconnected neighborhoods.
I agree with Mr. Flemming’s view income tax sharing. I do not think that at this point complete reallocation of EIT or similar funds would be best since there would be chances for fiscal disruption in some communities. That said, we do know that regional funding systems elsewhere in this country do work well and produce a balanced method by which to fund local services so that one community is favored over another owing to class or social discrepancies.
Best regards,
Michael
Post update — Morning Call Point/Counterpoint
Morning Call Point/Counterpoint on the Arena
(Welcome back. My comments on Mr. Thode’s comments. I’ll offer my critique of the project supporter in a separate post.)
The Call has an interesting article, but I will not be able to respond until tomorrow or Friday.
I take issue with a variety of the “con” statements (from Stephen Thode).
Why do you oppose the tax structure of Allentown’s Neighborhood Improvement Zone?
Allentown was granted a special, preferential tax structure for the NIZ. That structure is unavailable to any other municipality in the state. … It creates an unlevel playing field, which will permit private developers to apply taxpayer funds to the debt service on the buildings they develop in the NIZ. Hence, they will be able to offer lower rents [and still make a tidy profit!] [compared to] developers and property owners outside the NIZ. Unless the NIZ creates new jobs as a result … the NIZ will simply attract existing tenants from other landlords and municipalities in the Lehigh Valley. Wealth will be taken from other property owners and municipalities outside the NIZ and be given to developers inside the NIZ.
Of Class Warfare
Greetings:
I really do not understand…who is advocating class warfare?
Romney says we “envy,” as if the only thing we want in life is to have his riches. I would just like to see a world where getting a job is not based often on whether your father runs a major automobile company. Santorum says the fault is with “élite snobs.” I would like to see a world where one can get an education that provides an ability to see through rhetoric designed to deceive.
All the President wants is to create a fair field on which to play, and the protection of rights to be who we wish to be. I hear that in everything he says.
I really struggle with what the Republican candidates are demanding, but even more with those who seem enthralled with the message.
Of course, these are merely my feelings, but…I have to really put myself in a different world to see the “right’s” desired goals.
Best regards,
Michael
More on Energy to Waste
The following link to an Express Times article convinces me more that this city does not understand what it is getting into.
The science is unproven, and votes will be taken by people who do not have enough information with which to make an informed decision. The result?
Uncertain, but I would be worried.
Michael
Santorum
Greetings:
So Rick is making his way up the polls.
To me, every word he utters is an anathema.
Of Moderation
Greetings:
[(Price - Variable cost) x Quantity - Fixed Costs ] x (1 – Tax Rate) = Net Income
This is a basic profit formula; a very important formula that determines whether a firm will replace its assets and produce a rate of return for its lenders and shareholders. To make this formula work, managers must make a variety of decisions, often many that are in opposition to what society may wish (labor benefits, environmental stewardship, fairness, equality, etc.)
The capitalistic system provides rewards to those who are able to develop products and maintain positive net income over time. The system is neat because incentives lead to solutions to the problems of population growth and resource depletion. Come up with a solution that uses few resources per person, or allows more people to survive at a higher standard of living, and reap success.
Of Revitalization, the Arena, and Trust
Greetings:
As readers know, I have supported the downtown project because of the opportunity to invest a significant amount of money that would normally divert to other areas around the Commonwealth. That taxes would return to the originating local governments was always assumed based on information that came from sources I trusted and were outside the “inner circle.”
Readers also know (as do people within the inner circle) that I was always concerned about who benefited. I told the Mayor, over and over, as well as members of AEDC, this was not a project for 500 white guys.
I supported the project because of what it could do with innovative management for the residents and businesses of Allentown.
In my eyes, the political managers of this project have failed the people’s trust.
