EIT Increase Referendum Voted Down by Upper Dublin

This November’s ballots will not feature a hotly debated question about Upper Dublin’s Earned Income Tax rate. The commissioners voted down the idea of putting it to the voters during their July meeting.

In a topic previously tabled by the Upper Dublin Township Board of Commissioners, as covered by Wissahickon Now in May, the board revisited the idea of an Earned Income Tax referendum that would be placed on November 2024 ballots. The board hoped to gain community feedback on whether or not it should increase the township’s EIT in order to fund Open Space initiatives.

Harm J. Scherpbier, Ward 1 Commissioner, backed the concept, which had to be voted on during the July board meeting to make the fall ballot deadlines. He said that it is the method in which the taxes should be set aside that is up for debate. A list of pros and cons accompanied each of the options, he said.

“I wish I could shuffle some of the boxes around to come up with the perfect solution that is exactly what we need, but we have to kind of navigate between these various options,” he said.

The commissioner noted that having an EIT ballot question go to the people of the community was a big bonus in his opinion.

“The proposal for the Open Space Earned Income Tax has the benefit that it is voter approved per referendum,” he said. “It is also applicable to purchases of Open Space and improvements to Open Space that was purchased.”

Other options limited the commissioners’ abilities to use the funds that were set aside. With what he called “future opportunities and properties of interest” in mind, Scherpbier said these moneys would be applicable for such use. Land that the township already owns, for example, cannot be improved with EIT-garnered funding.

“To cover those, we would have to use the right-most column, General Obligation Debt, which we can discuss in November during our budget process, that way we can decide how much we want to dedicate to that particular fund,” he said.

He suggested possibly “splitting the difference,” noting that the key point is to add to the Open Space fund.

“We could say we will go forward with Open Space EIT at the lower rate we discussed at 1.035% which is a very low rate compared to our neighboring townships, put that aside; use it for purchases of land and easements,” said Scherpbier. “In fall, in our budget cycle, put a small amount unrestricted also in place, so that would fund any projects that would not be covered by the Open Space. By doing a little bit of both, we can meet both purposes. And we spread out the taxation over multiple income sources.”

Scherpbier proposed moving ahead with the EIT ballot question, “so the voters can weigh in whether they support this plan or not.”

Alyson J. Fritzges, Ward 6 Commissioner, said she’s seen both sides of the issue, and gone back and forth.

“Where I come down tonight is that I’ve taken a couple steps back,” she said. “I would like to, me personally, I would not be interested in doing both. I would want to do one or the other.”

Fritzges said that commissioners sitting down at budget season to review a bigger picture of funding needs is a more ideal time to make such choices.

“I think we do need a pot of money for Open Space,” she said. “But I would like it to be something that we could use for more than what the EIT can be used for. I think, at least in my mind, I need to take a step back, sit with Parks and Rec, and see what we have out there to fund in the upcoming year. I wouldn’t be in favor of doing the EIT at this point.”

Commissioner Gary V. Scarpello of Ward 3, said he’d be in favor of doing something “more versatile.”

“The biggest thing that worries me is having money left over that we just can’t use,” he said. “I think we’re probably better off doing it with a dedicated portion of the [property] tax, as opposed to the EIT.”

Meredith L. Ferleger, Commissioner of Ward 2 and board vice president, said she did not favor an EIT increase.

“If you are looking at these figures in terms of average household increase, even just on the numbers we’re talking about, that [EIT] is the biggest monetary increase than all the other options and is also the most restrictive,” said Ferleger. “I think this chart is really instructive on why this is not the way to go about this goal.”

Ferleger said the goal was still the right target but did not favor an EIT tax referendum as the pathway to reaching it.

“We obviously want to continue to be able to fund and support the Open Space Plan and all the goals, this is just not the way to do it,” she said.

Ward 5 Commissioner Cheryl Knight said she too wanted to fund open space initiatives and did “not have a problem sending it to the voters.”

“Is this onerous to a smaller group of people? And looking at these numbers it doesn’t look onerous to me, so I wouldn’t have a problem with it,” said Knight. “My main concern, echoing what Gary said, would we have money left over that we couldn’t use?”

Knight said that she and Scherpbier had noted a possible five-year “expiration date” could be added to the tax increase, so the board would have time to decide if the funds were useful or not.

“I’m in favor of doing something,” said Knight.

The motion and second had remained open from the prior meeting, as the topic was simply tabled. The board paused for public comment, prior to a vote, at which time Ginny Vitella said she agreed with Ferleger and her prior comments.

“The EIT, I want to say, just because someone has a wage versus a retired person that has money set aside, doesn’t mean they make more money,” said Vitella. She noted that the school district had families that were earning wages but were still “disadvantaged.”

She said she would not be in favor of Scherpbier’s alternative for a combination of both, as she felt that would be “double taxation” for those that pay both income tax and property tax. She also noted that the community had many workers that both work and then pay taxes in Philadelphia.

“I don’t know if the public knows, but that money does not come back to Upper Dublin,” said Vitella. “That is going to be a huge thing. It is another inequitable portion of this.”

She also questioned where the money would be used, fearing not much land was available for adding open space to Upper Dublin Township.

“I think having the discussion year-to-year about where do we spend that money will add more flexibility and is more helpful,” said Vitella.

The board then took a roll-call vote on Ordinance 1393 to include the referendum ballot question on the November 2024 ballot. The close-call ordinance failed, with Joseph A. Rudolf, of Ward 7, voting “Yes” with Knight and Scherpbier, but four “No” votes coming from Fritzges, Scarpella, Ferleger, and Board President Ira S. Tackel.

Tackel said that the November timeframe will be the next opportunity to discuss funding Open Space initiatives.  Township Manager Kurt Ferguson said that, at that time, the commissioners could decide on an idea that the township’s finance director, Jonathan Bleemer, had created for the board’s consideration.

“What Jonathan outlined here was not that we’ll find money in the General Fund that competes with police cars and other items, and setting it aside,” said Ferguson. “What was outlined here, per Jonathan’s overview at the last meeting, was a specific milage dedicated to Open Space. We can have that discussion in the budget.”

A figure that would generate half of one million dollars, of unrestricted funds for open space, was calculated and would be discussed as a property tax milage increase come budget season.

“It wouldn’t be locked in,” said Ferguson, noting the rate could change each year. “We can talk about the board’s interest in pursuing the option come budget time.”

Due to legal deadlines for the township, no questions regarding the EIT of Upper Dublin will be placed on November 2024 ballots.