Bucks County Towns Made Over $79 Million With EIT Tax; Residents Push, Falls Says ‘NO’

For the past several months, Falls Township residents Guido Mariani and Roland Kinney have teamed up to educate and convince the Falls Twp. Board of Supervisors to enact an Earned Income Tax or an EIT.

Mariani, at the challenge of the board members, presented his findings Tuesday evening during public comment in an effort to demonstrate the potential for economic revenue if the township chose to enact a 1% EIT.

An EIT is a tax levied as a percent of earned income, according to the Pennsylvania Department of Community and Economic Development. The already existing Local Tax Enabling Act requires every employer within the taxing jurisdiction to register with the earned income tax officer of the district;  however, it is completely at the discretion of the municipality to enact an EIT, but many in Bucks County and the surrounding area have chosen to do so, in fact nearly 66% of the county has said ‘yes’ to an EIT.

This EIT, if enacted, can be deducted from any taxable earned income including wages, salaries, tips, union strike benefits, long-term disability benefits, and net earnings from self-employment if you own or operate a business or farm, if you are a minister or member of a religious order, or if you are a statutory employee and have income, according to the IRS.

There are 32 municipalities in Bucks County, comprising of mainly second class townships and boroughs, and one first class township, Bristol Township. Of the 32, 11 do not currently have an EIT. The municipalities which make up the 11 consist of Bensalem, Bristol Borough, the aforementioned Falls, Hulmeville Borough, Langhorne Borough, Langhorne Manor, Lower Makefield, Morrisville, Penndel, Tullytown, and Yardley, all of which are located right in our immediate area. Mariani said some of these municipalities are so small that the impact from enacting an EIT there is ‘virtually pointless’.

Middletown Township is the most recent municipality to enact an EIT, doing so in an amended 2014 budget on January 23. The amended budget sets the rate at .5% and limits payment by those whose income totals less than $12,000 annually.

According to Middletown, the institution of an EIT in the budget was an attempt to reconcile nearly $4 million in debt, with the expectation that the appropriated Neshaminy School District would be privy to half of the EIT collected.

However Neshaminy is not allowed to do so according to state law without following several procedures under Act 1, which would make them the first school district in EIT history to do so.

According to Mariani, the advantageous aspect of the EIT is that many residents living in Falls do not work within the township and therefore must pay the tax somewhere else. If the township did enact an EIT, that would bring all of that revenue going to outside townships, back home.

According to documents, $79,941,079 was collected in EIT revenue by the Bucks County municipalities who had one in 2012. The data from 2012 is the most recent calculation made available by the Pennsylvania Governor’s Center for Local Government Services.

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Falls board Chairman Robert Harvie noted to Mariani at the June 17 Board of Supervisors meeting that data was collected during a ‘comprehensive plan’ many year ago, which found that majority of township residents did not pay an EIT. Mariani suggested that Harvie have his plans updated to reflect the now growing number of residents who work outside of the township and already pay the tax.

Harvie noted to LevittownNow.com that the township had reached out to the same company that did research for Middletown Twp. last year, solely to find out how much it would cost to do a similar study and that their quote was around $19,000. “(This) seemed a little high for some members of the Board, so we haven’t decided whether or not we will even have them do the study, or reach out to anyone else,” Harvie said.

If Falls did enact an EIT, anyone who is a resident and works outside of the township would bring the EIT tax they already pay into the hands of the township in which they live.

“I don’t understand how you could all walk away from this type of revenue, I certainly don’t think you believe that majority of residents are not already paying this tax,” Mariani said.

After stressing his appall for the board’s disinterest, Mariani posed two questions for the board’s reluctance, “Is it because you are afraid of being accused of raising taxes in the future by your opponents, or is it because you all are acting on a request from someone or a nearby municipality to not enact it.”

Harvie said that he had not received any request to deny an EIT from outside sources and that Mariani seemed to be the only resident concerned with instituting such a tax.

Harvie stated that the dominant reason for the board’s lack of interest lies in the feeling of the board that there aren’t many residents of Falls who currently pay the tax, and instituting an EIT of 1%, which is what Mr. Mariani is calling for, would be a sizable tax hike for those not currently effected.

Related:

• Letters to the Editor, by Mike Falkefitz