A Lehigh Valley lawmaker is proposing a new bill that would compensate communities with a high percentage of tax-exempt properties.
According to a release from State Rep. Robert Freeman’s office, the new legislation would provide special financial assistance from the state to these municipalities.
Freeman, a Democrat representing parts of Northampton County, said the legislation called House Bill 451 would establish the “Tax-Exempt Property Municipal Assistance Fund.”
This fund would help municipalities with 15% or more of their total assessed property value as tax-exempt property within their borders.
Examples of these properties include higher learning institutions, nonprofit medical facilities, government offices, state forests and game lands.
Counties would be required to provide the state with information regarding the assessed value of tax-exempt properties on an annual basis. The funding formula would be based on the assessed value of those properties as if they were taxable.
No municipality would receive more than 10% of the total revenue in the fund, and property owned by the municipality itself would be ineligible for compensation.
The fund’s money would come from the state’s 18% liquor tax, called the Johnstown Flood Tax.
In a statement, Freeman said tax-exempt properties are significant employers and “important regional assets,” but added that they do not pay real estate taxes which places an “undue burden” on residential property owners in these communities.
He said a high percentage of these properties within a municipality’s borders results in a greatly diminished tax base, which makes it difficult to provide essential services.
“My legislation would provide annual financial assistance to those affected municipalities, giving them the ability to provide those services that ensure the health and safety of their residents,” Freeman wrote, “and it would put their community in a more stable financial position to attract economic development and succeed.”
The release said that the new legislation would provide significant funding to municipalities in the Lehigh Valley including Allentown, Bethlehem, Easton and Fountain Hill.
HB 451 has been referred to the House Local Government Committee.
(Original air-date: 3/24/23)
