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Robert B. Sklaroff, M.D.
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Position Paper – The Earned Income Tax
Responsibility for unnecessary enactment of the EIT rests principally on Ms. Agostine. Thus, Property Tax should be cut “$-for-$” immediately. The EIT is also excessive, for the Budget and the 12/18/2002 Testimony of Township Manager Burton T. Conway state that there was a funding gap of $1.2 M, but that the EIT raised $1.7 M (6% of $29 M).
Yet, four cost-centers alone account for $1.3 M:
A $ 340,000 Unnecessary Economic Development B $ 222,000 Excessive Legal Services C $ 330,000 Under-Taxing of Willow Grove Mall D $ 400,000 Increased overall Debt Service
This is only a superficial estimate, not taking into account the rationale for a new position (Code Enforcement), more bonding for flooding programs, and salary/benefit increases.
A. Economic Development [Fairway, including pole-lamps]
The $340,000 Expenditure was unnecessary, including ~$80,000 for pole lamps that clash with everything around them (including the lighting on each property). The “scale” of this project is skewed, and it intuitively cannot improve “development” of businesses that line this region; the Barnes & Noble is just fine, the auto-dealership isn’t relocating soon, the Rydal West/East residents are more concerned with their ability to cross the street, and the fate of the stores in the shopping-centers across the street will be far more greatly affected by the status of the Baederwood Cinema than by quaint light-fixtures.
Ms. Agostine defends this project because PECO also replaced electric lines and because it was financed by two hospitals (Abington and Holy Redeemer) in lieu of taxes. Yet, PECO need not have been permitted to subsidize its costs by using Township monies, and monies collected from the two hospitals was not a “grant,” inherently segregated from being used for other purposes (or not at all). [To enhance the region’s aesthetics, better she should insist illegal/ugly signage be removed (also along Old York Road).]
B. Litigation [Code Enforcement Committee, Doretta’s]
Legal Services [Retainer of Township Solicitor] rose from $40K Expended [2000 & 2001] to $92K Expended [2002]. Legal Expenses for Planning and Zoning rose from $21,079 [2000] to $29,785 [2002] {including Retainer & Additional Legal Costs, ascribable to zoning litigation under Ms. Agostine’s aegis}. Delaware Valley Insurance Trust Premium rose from $478,176 [2001] to $639,778 2003]. The latter has increased by 5% between 2000-2001, 11% between 2001-2002, and 23% between 2002-2003. [These costs are undoubtedly an underestimate, for she has been in-office since 1995; the Board has just appointed a consultant to correct flaws that led, for example, to the Congregation Kol Ami suit, based on its not being able to seek a “special exception.”]
C. Under-Taxation of Willow Grove Mall
Web-site [http://www.montcopa.org/mway/parcel.html] of MontCo Assessment Office (610-278-3761) provides basic tax-data using parcel #’s provided by Max Solomon (267-536-1025) as long as the parcel # is preceded by “3000.” Staff supported view that Township can appeal individual assessment [“out-lier”] as long as it’s tethered to other like-properties, such as a mall) without mandating global reassessments. Data can now be used to show the effect of the sale on the taxes (using the millage of 3.33; the county is 2.84 and the school is 20.426, for a total of 26.596). All calculations are germane, because that for the schools would have obviated its 0.5 % EIT (noting higher millage). {The [*] denotes a parcel that was not on the web-site, so the data were conveyed orally; it is identical to another entry, but both figures are dwarfed by others, anyway.}
Parcel # Assessment Abington-Tax Abington-School-Tax 14216-001 $ 40,690 135 831 14220-061 40,690 135 831 [*] 14224-002 28,260 94 577 14228-007 113,520 378 2,318 14236-008 13,554,130 45,135 276,856 14236-404 48,089,560 160,138 982,277 14776-008 34,290 114 700 14780-004 35,120 116 717 14800-002 73,160 243 1,494 14820-009 3,054,310 10,170 62,387 45098-007 10,000,000 33,300 204,260 45098-502 3,298,690 10,984 67,379 48984-009 28,410 94 580
TOTAL 72,760,030 261,036 1,396,947
Per the SEC filing, the mall was purchased in 2000 for $140 M (double the assessment); renovations (Macy/Garage) totaled $26 M ($10 M financed separately, and $16 M from the PA. Real Estate Investment Trust); thus, the fair market value is $166 M. Thus, the Taxes owed to the Abington (based upon these data) would be 261,036 x 166/73 = $593,588, yielding a difference of $330,000; the monies that would be paid to the school district would be 1,396,947 x 166/73 = $3,176,619, yielding a difference of $1.7 M. [These data under-estimate the true assessment of the Mall, for they do not take into account its enhanced overall value due to contiguity of Macy’s/Garage.] At the May Commissioners’ Meeting, the matter was said to have been investigated; yet, no specific reason was given either for not having appealed, or for having charged the 1% Transfer Tax on the assessment instead of on the sale-price, thus losing another $700.000.
D. Increased overall Debt Service
Were these cuts instituted at the turn of the millennium, deficit-spending wouldn’t have occurred during the past 3 years (raising debt-service from $ 1.2 M to $1.6 M). Such data take into account neither the decrease in investment income of $310,000 from budgeted, nor the gap in charges/services due to insufficient user-fees. [e.g., residential refuse fee]. |
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To contact me--Robert B. Sklaroff, M.D.--just send an e-mail (rsklaroff@comcast.net).
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