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Tax Cut in Proposed 2014 Budget

Tax Cut in Proposed 2014 Budget
Allentown Mayor Ed Pawlowski delivered his proposed 2014 city budget to City Council today. The budget calls for $89.3MM million in spending and reduces the Earned Income Tax Rate for residents and non-residents.

In his message to City Council, Pawlowski said, “The proposed 2014 Budget and Program of Services will see a continuation of the austere spending and employment practices we have pursued these past eight years. It maintains essential city services while reducing costs where appropriate.”

The administration anticipates finishing 2013 with expenditures under budget.

The 2014 budget effectively holds the composite property tax rate at 8.42 mills for a ninth consecutive year. A county wide reassessment became effective in 2013. The composite property tax rate was 17.53 mills in 2012.

Pawlowski said, “2014 will be an exciting transition year for the city as the first full year after the successful closing of the concession lease agreement and as new developments come online in the NIZ. In recognition of the transition, this proposed budget starts the process of reducing the Earned Income Tax rate. The additional EIT that was approved in 2010 for both residents and non-residents of the city will be decreased from 0.35% to 0.33%. We are excited to be able to offer this as the city expects to continue to phase out this tax as pension payment requirements ease and all the positive initiatives that have occurred with the city in the last 18 months begin to provide alternative and additional revenue sources to the budget.”

The Business Privilege Tax remains stable, as does the $52 Local Services Tax. The Refuse Collection Fee remains flat.

As a result of the city’s successful execution of the concession lease, Moody’s Investors Service has revised the city’s outlook from negative to stable. In June, Standard & Poor’s revised the city’s outlook from stable to positive.

A billion dollars in investment has been announced in planned or underway development projects in the Neighborhood Improvement Zone in the downtown and along the waterfront.

Pawlowski thanked city department directors, bureau chiefs and supervisors for their diligence throughout the budget formulation process. “They deserve credit for devoting their time and effort to help put together a budget that continues to provide our taxpayers outstanding services at reasonable costs.”

Pawlowski will formally present the budget to City Council on Wednesday, November 6 at 7pm.
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