Lower Nazareth to Withdraw from NIZ Lawsuit

Lower Nazareth Township Allentown's controversial Neighborhood Improvement Zone (NIZ).

The lawsuit, led by Hanover and Bethlehem townships, toward the construction of a $220 million hockey arena and other improvement projects in downtown Allentown.

The Board of Supervisors unanimously approved the motion to withdraw at the recommendation of solicitor Gary Asteak. The solicitor noted that the June 30 approval of an amendment within the state budget will eliminate the diversion of earned income taxes from municipalities and school districts outside Allentown to the arena.

Chairman Eric Nagle was hesitant to make the motion, wondering if it was premature to withdraw.

Asteak, however, reassured him that "we’ve accomplished our goal." He added that he has been in contact with Berkheimer Associates, Allentown's tax collector, to ensure $6,169.45 in earned income taxes from the first quarter of 2012 are "remitted promptly."

Nazareth area municipalities were set to lose close to $54,000 this year in earned income tax money, including:

• Nazareth: $5,234
• Upper Nazareth Township: $4,379.48
  
• Lower Nazareth Township: $24,677
• Bushkill Township: $19,312

Berkheimer released figures in early June that showed the city’s special downtown tax zone would have collected about $1.8 million from outside municipalities, according to The Morning Call.

Figures for Northampton County school districts were not included.

The original plan was to have earned income taxes -- for the state, local municipalities and school districts -- from within a 130-acre area in center city Allentown and along the waterfront diverted to pay debt service on bonds that will pay for improvements in the area. The tax revenue normally would be forwarded to the home municipalities of those who work in the district.

For the first quarter of 2012, Nazareth lost $1,308.74 in earned income tax revenue from people who live in the borough but work in Allentown. For Upper Nazareth, it was $1,094.87; Lower Nazareth, $6,169.45, and Bushkill, $4,828.03.

However, all earned income taxes funneled toward the project in the first quarter will be paid back to the municipalities, as Asteak noted Wednesday night.