Contentious meeting debates earned income tax

Milford. Borough officials said without more revenue, services like police protection and trash collection are in peril. But opponents of the EIT say spending must be reined in and suggested selling off borough properties like Biddis Park.

| 08 Jul 2021 | 12:21

The hearing was so contentious, Mayor Sean Strub pointed out the two police officers present.

More than 40 people attended the Milford Borough council’s hearing on the proposed earned income tax (EIT). Some were from the borough, some from Milford Township, and at least one from Matamoras.

Several asked the council to exhaust every other avenue for raising revenue before voting on the proposal, since the budget for this year has already been set. Some said voting for the tax in October is pro forma when the budget is set, and they wanted no tampering with the budget now.

But officials say services paid out of the borough’s general fund, like police protection, garbage collection, zoning, sewer services, building inspection, and tax collection, are all in peril.

Councilman Joseph Dooley said approximately 13 percent of the property in Milford is exempt from paying any property tax to the borough, including all county-owned properties as well as its churches and other non-profits. He said the borough lost approximately $141,675 for all exempt properties, and $61,917 for county properties alone. Milford Borough is the county seat.

In an explainer Dooley prepared to illuminate the topic for residents, Pennsylvania statute allows a municipality to collect one percent of the earned income or gross wages from people who live or work in a municipality that does not already have an EIT in place. It taxes only earned income, not Social Security, pensions, IRA distributions, 401K accounts, interest or dividends, unemployment, gifts, inheritances, or other unearned income.

He said Pike County has not conducted a property reassessment since 1994, while borough expenses increase every year.

Because the borough is pretty much built out, Dooley said, more properties cannot be added to the tax base. “What saved us in 2020 and looks like it will also help us in 2021 is the real estate transfer tax, where the borough collects a fee every time a piece of property in the borough is sold,” Dooley said.

Selling off borough property

Some in the audience suggested selling off borough property instead of instituting a new tax. However, the counter argument went, property acquired with federal grant money, like the parking lot, may not be resold. A perc test failed at the lot site, presenting another possible barrier to resale because of sewer issue.

Jonathon Kameen, who lives in Dingman Township, said the borough should sell Biddis Park.

Dooley told the Courier afterward that members of the Architectural Review Board who attended the hearing did not object to this idea.

“This is the death spiral for Milford Borough,” he said.

Meagen Kameen, a former borough council member who now lives in Dingman Township, said she was opposed to the EIT, saying it was a set-up. She said some of the information present wasn’t correct.

Mayor Strub said volunteers have contributed so much work to the borough over the years that an EIT wasn’t needed until now. He told story after story about the ways volunteers kept budget increases at bay. The police chief worked for half-salary, he said.

Strub was continually interrupted as he spoke. Several shouted that he had talked longer than others were allowed to, and demanded he stop immediately. Strub waited for each outburst to subside, then continued.

Jon Kameen called Councilman Frank Tarquinio a hypocrite for letting Strub talk for so long. He said the council has two sets of rules.

Dooley said he was speaking as a private citizen when he later told the Courier he’d like to sell unnecessary borough-owned buildings. The old jail, for instance, would make a great restaurant, he said, where diners could be served in a cell. Or a lawyer might want a cool office.

Dooley said he’d like to bring all activities back to borough hall, where the second floor could house the police department and borough administration. He said the borough didn’t need “all these buildings.”

Those who support the EIT said a part-time police officer gets “dirt pay” of $17.50 an hour with no benefits. The borough is often their first job in law enforcement, they said, and officers move on to earn more elsewhere. They said they did not want to lose their local police force because of budget constraints.

If that happened, the state police would take over policing in the borough.

At the end of the meeting, Councilman Pete Cooney said he will never vote for the EIT. As he left St. Patrick’s parish hall, where borough meetings are now held, he shouted out, “They should take the vote now. Why wait?”

He called the EIT “abusive” and said the vote would be six to one.

Cooney later told the Courier that, if the EIT passed, he would fight for its repeal. He said it was unfair to the working people in the borough.

“As a 35-year union member, I will not vote for this type of assault on hard working people,” Cooney said in a message to the Courier after the hearing. Would he give up services not to have the EIT? “Depends on what service,” he said, “but it won’t come to that. We have to explore other ways to raise revenue.” Prior to the hearing, Cooney passed out cards to borough residents and expressed his opposition to the EIT on Facebook.

Resident Bill Kiger told the Courier by phone that comments by Tim Harr, who is is on the finance committee, laid the responsibility for preventing further taxes and spending on the borough council .

Kiger said it’s very easy to spend money, and hard to abide by a budget. “We need to hear from the council that they understand that the control of spending is vital,” he said. “We just did the ambulance tax and we did the LST (local service tax), and all these things add up.”

He said the council will probably will pass the EIT. They’ve reached the end of their budget, he said. “But we get the feeling that they keep going up and up and up on taxes,” he said. “They need to understand their responsibility as to how far they are going to go, and we’re not hearing that.”

In his Dec. 1, 2020, budget letter to residents, Mayor Strub wrote, “Milford Borough, while being the second poorest municipality within Pike County in terms of taxable assessed value, provides more services than any surrounding municipality for the lowest cost. We believe the value of what the Borough provides is second to none.”

Editor’s note: Councilman Joseph Dooley outlined how the EIT will affect borough residents:
1. Borough Property Owner Working in PA who Already Pays EIT:
a. Will receive a 5mill reduction in property tax = $184 (based on average tax bill)
b. EIT will now come to Milford Borough not another municipality
c. No reduction in any services
2. Borough Property Owner Working in NJ or PA with no EIT:
a. Based on average salary of $50k per year will pay $500 EIT to Borough
b. Assuming same property tax reduction of 5 mills results in net tax increase of $316
c. No reduction in any services
3. Borough Property Owner who is Retired with no Earned Income
a. Will not pay EIT but will also receive a 5mill reduction in property tax = $184
b. No reduction in any services
4. Borough Resident who is Retired with no Earned Income
a. Will not pay EIT
b. No reduction in any services
5. Borough Resident who is working
a. Based on average salary of $50k per year will pay $500 EIT to Borough