by Ron Beitler

Last night at the township Board of Commissioners meeting a colleague, Commissioner Ryan Conrad, asserted that Tax Increment Financing (TIF) is not “corporate welfare.”

It’s important residents understand where commissioners stand on issues. This is because every four years we receive a job review from constituents in the form of an election. Therefore, I would be remiss if I didn’t clearly state that disagree with Mr. Conrad’s assertion in the strongest of terms.

“Corporate welfare” in this instance has been used as a rallying cry for residents who by and large support the project but without the 20-year tax forfeiture. Some institutional supporters have tried to use semantics and word games to insist this doesn’t qualify as corporate welfare. This is a disingenuous game.

The facts remain:

1. If Lower Macungie participates in the TIF, 50% of the developer’s incremental taxes are siphoned away from the township.

2. These taxes are funneled away from residents of Lower Macungie. The money is instead siphoned back to the developer and other private interests through Lehigh County Industrial Authority where it is allowed to be used to pay back construction bonds for improvements that are required of developers seeking to do business in the township.

3. TIF tax money is very clearly forfeited by taxpayers. It will be used to pay for what otherwise would be the responsibility of the developer, in this case the bare minimum improvements required by Penndot to build a shopping center of this magnitude.

4. The bottom line is that this pads the developers bottom line. TIF increases profits for private interests and decreases the return received by taxpayers. It is preferential treatment for one chosen developer. It is a subsidy of both the seller and the buyer. It is a distortion of the market and it will hurt other local businesses.

5. While you can argue that creating the TIF district could pull the plug on the entire TIF, (including the school district) the township’s participation (remember they are two separate ordinances and two separate votes) is purely symbolic and will have absolutely zero impact on the developer building the project. In other words, with or without the township participating in the TIF this shopping center is coming. This is a certainty. I can’t be anymore clear about that. There have been attempts, it seems, to blur this line. That is wrong.

Lower Macungie’s participation in the TIF gives one developer special treatment for purely symbolic reasons. We are a relatively affluent township with a healthy and robust economic climate, therefore TIF is unnecessary and borderline egregious to even consider.

A vote for the TIF is absolutely a vote taking money out of the pocket of Lower Macungie residents and funneling it to private interests over a 20-year period. If any commissioner believes this is the right thing to do, then they should stand by that and not try to rationalize it by making statements like, “The developer still pays 100% of it’s taxes,” while ignoring the fact that half those taxes are siphoned away from the township back to the developer by padding their bottom line through the Lehigh County Industrial Authority. Or no “corporation is receiving a direct subsidy. Last time I checked TCH development and The Goldenberg group are in this to make money. They are indeed a private business who will benefit from TIF. No, the “nameplates” Costco and Target aren’t the direct beneficiaries but private interests are the winners in this shell game. Taxpayers and other local businesses are the loser.