The math of Milford Borough’s Earned Income Tax

| 27 Oct 2021 | 06:28

    To the Editor:

    At the last borough meeting on Tuesday, Oct 19, council financial chairperson presented the proposed Milford budget for 2022. It was explained that with the Earned Income Tax (EIT), property taxes are likely to decrease by 10%, which according to the financial chairperson should result in an average property tax reduction of $180. If you’re a single family with an income of $20 hourly wage, which is approximately $40,000 annually, then a 1% EIT would cost you $400 to the borough. If you’re a two-income family making the same $20 per hour each, that equates to $800 annually. Prior to the EIT implementation on Oct. 1, you would have paid an average $180 per property owner. So in reality, you’re paying more, not less, in taxes than you did prior to the EIT implementation. If you’re retired or have income generated by property rentals, then yes, you’ll receive a tax decrease because those sources of incomes aren’t taxable under the EIT.

    The borough EIT is a regressive tax, placing a heavier burden on those who can least afford to pay. Given the current national inflation rates, every household will be paying an additional $175 per month for basic goods and services, according to U.S. government calculations. Everyone who’s seen the real estate boom in Milford may not know that the borough has generated additional revenue from this, primarily from the 1% real estate tax transfers, in just the first eight months of 2021. We still have four months of real estate transfers to accrue. Currently the borough is showing a $65,000 surplus for accrued revenue to date in 2021. This additional revenue will roll into the 2022 budget, essentially eliminating the need for an EIT this year. But wait, the council and mayor are currently reviewing the 2022 budget, including significant increases. Yes, spending increases. If you recall, during the council debate this summer whether or not to institute an EIT, we were told we would have to cut either garbage or police staffing if we didn’t approve the EIT immediately. Apparently the opposite is true. According we are expecting a budget surplus in 2022.

    So where is the emergency? We have gone from a narrative that says we’ll lose our garbage service or see reduced police coverage, to a narrative of increasing borough expenditures and a projected budget surplus. In short, there are two key points to this issue. First, this regressive EIT tax is harder on those who can least afford it and second, we don’t need it now. Some will say that because I’m running for borough council I must have a hidden agenda. The opposite is true. I feel all government, particularly our Milford Borough Council, should be open, honest, and fair to every one of our town residents. If you feel differently then I implore you not to vote for me.

    Timothy J. Haar