Rep Freeman bill would help communities with high percentage of tax-exempt properties

State Rep. Robert Freeman, D-Northampton, has reintroduced legislation

H.B. 2271) that would provide funding to municipalities with high levels of tax-exempt property, such as major universities, non-profit medical facilities, government offices or state forests and game lands.

"Municipalities with a significant amount of tax-exempt property, including several in the Lehigh Valley, have difficulty providing the essential services expected from local government because of the effect tax-exempt properties have on the real estate tax base of the community," Freeman said. "By providing annual funding to these municipalities, we can enable them to fix and maintain infrastructure and to provide the essential services that ensure the health and safety of their citizens."

The bill would establish the Tax Exempt Property Municipal Assistance Fund to help municipalities with 15 percent or more of tax-exempt property within their borders. It would be funded by the state's 18 percent Liquor Tax, known as the Johnstown Flood Tax. The tax generated approximately $270 million in the 2009-10 fiscal year.

"The tax did its job a long time ago, and that was to rebuild Johnstown after it was devastated by a flood," Freeman said. "It's time to target that money to municipalities that are falling further into financial distress simply because they have significant amounts of tax-exempt properties within their boundaries. This legislation can help hundreds of communities across our commonwealth."

In the Lehigh Valley, the legislation would aid Allentown, Bethlehem, Easton, Fountain Hill, Hanover Township, North Whitehall Township, Lynn Township and Heidelberg Township.

Freeman added that many communities that are under the Act 47 Financially Distressed Municipalities program have a high percentage of tax-exempt property.

The legislation would require that each county annually provide the state with information regarding the assessed value of tax-exempt properties. The funding formula would be based on the assessed value of those properties as if they were taxable. No single municipality would receive more than 10 percent of the total revenue in the fund, and property owned by the municipality itself would not be eligible.