Upper Dublin debates adding tax increase referendum to aid with open space initiatives

When it comes to funding open space in Upper Dublin, there are many options that stand before the township board of supervisors. During the May 14 meeting, the board discussed several ways upcoming projects involving open space could be paid for — including placing such choices on the November electoral ballot.

“These are two different in mechanisms,” explained Board President Ira S. Tackel. “The motivation behind [both] is an open space plan …. and what ought to be the source of funding.”

Harm J. Scherpbier, Ward One Commissioner, said that looking for a source of funding is a good way for the board to “find a way to execute and accelerate” open space planning.

“There are multiple ways of doing it,” said Scherpbier. “The interest here is finding which of the ways have the broadest support among the board and among the citizens; that’s what we’re looking for here.”

One option before the board included an addition to the Earned Income Tax (EIT).

“The EIT referendum would propose an addition to the existing EIT that many of the residents in Upper Dublin, but not all, currently pay,” explained Tackel.

If approved by voters, funds would be generated to use for open space. However, the use of the funding has very particular restrictions. Only 25% of the funds can be put toward improving the open spaces, while 75% of the funds must go toward purchasing the space.

“There are a number of caveats by virtue of the fact that it is generated from EIT,” explained Township Municipal Authority Executive Director Kurt M. Ferguson. “It can grow, year over year, if it is not spent. Only certain uses qualify [for its use].”

Alternatively, the board could also decide to place a second element on the ballot, requesting electoral debt as a method of collection.

“We did this in 2008, where we asked the residents of Upper Dublin to authorize the board to spend up to $30 million in electoral debt for open space projects,” said Tackel. “That was unrestricted.”

While the limit was set at $30 million, due to the fact it was approved in this manner, it was also inclusive of a 10-year expiration date. By 2018, the township had opted to use only around $7 million of the funds.

“When the board, in 2008 took this approach, the residents of Upper Dublin overwhelmingly approved that electoral debt,” said Tackel.

To be clear, the president went on to explain that, with or without referendums asking the voters’ opinion, the board did have the authority to make such purchases at any time.

“Approved or not, if deemed appropriate for open space, this board felt compelled to take action, it can do it anyway,” he said. “This is an approval and acknowledgement by the residents, but not necessary for the board to act with.”

Adding a referendum, in addition to garnering public opinion, would also put additional restrictions on the funds.

“Over 23 years that I’ve been on this board, and this board has approved millions of dollars to acquire land, to place restrictions on land in terms of development in perpetuity,” said Tackel. “We reacquired, for example, all of 20 Valley; it didn’t cost us much because it was leased out as a golf course, but we took that back. We’ve secured hundreds of acres of land in Upper Dublin over 20 some odd years very successfully.”

Ferguson noted that this ballot referendum could include an EIT increase of any rate but noted that a 0.1% hike would generate around $1.5 million. In recent years, neighboring townships including Whitpain and Whitemarsh have increased their EIT rates by 0.25% for similar use.

Tackle said that the change in an EIT would impact more than 14,000 residents in the township. It is a tax only those that earn income pay, as opposed to a property tax, which is a tax paid by township landowners.

“The EIT is money we get every year,” Tackel said. “With an electoral debt component, we would bond a purchase, and then fund a bond purchase by some mechanism, like raising [property] taxes, to pay that incurring fee on a regular basis.”

The board is permitted options at any time, without referendum, to make choices for the township. However, not earmarking funds for specific use means they’re up against other needs.

“Absent a funding source, as we implement this plan, these connections will compete from a budgetary perspective, with other needs of the township,” explained Ferguson. “If it comes to another safety issue, a funding source available on an annual basis or even on a bond helps; Or you say ‘well, we’ll do this this year, but what else can we scale back on to make this a priority.’”

The typical source of funding for open space otherwise comes in the form of new developments in the township.

“We’ve set up these various funding mechanisms to set money aside for things and to do things. This is a harder one,” said Ferguson. “We have open space money we get from new development, but if you don’t have new development for a year or two there is not funding source.”

Ferguson noted that making a choice to put either option to referendum would give money for this specific use of open space.

“This point for me is spot on; it is not like there is just something there without the board taking some action,” said Ferguson. “Either every year you go to take from the general fund, but at a cost of potentially other things versus something like this, that may provide that other avenue where those other things for the most part can go on without being affected by these decisions.”

Should the board opt for the EIT increase, the amount could be set by the motion itself.

“I’m OK with the idea, but at a much more modest rate, not 0.1%,” said Ward 6 Commissioner Alyson J. Fritzges. “It is something to get us started, to implement this open space plan. We’d get to talk about priorities and implementing it.”

Meredith L. Ferleger, Ward Two Commissioner and Board Vice President, had a far bigger problem with the concept, which she voiced during the session. First, she had concerns that referendums in general are tough to word so that voters could fully understand their meaning.

“How do you word it in a way people understand?” asked Ferleger. “When 95% of people see open space and don’t understand the limitations for that. It will lead to disappointment and [confusion] when taxed again when we want to do these improvements.”

Scherpbier countered that the wording for such referendums is clearly established in the state’s open space documentation.

“The text of the referendum is defined,” he said. “You may not like it, but the method is in the Pennsylvania Open Space Land Act.”

Far beyond wording, Ferleger said that this division of responsibility did not sit well with her.

“How do you reconcile the fact that the EIT is not an equitable levy of tax in the township?” asked Ferleger. “In fact, I would bet you that if we polled every member of this board, that not all of us would be subject to this tax. So, how is that an equitable tax that does not affect every resident equally? You’re basically asking a subset of township residents to fund our open space goals.”

Scherpbier said the option was simply something the state said the township may want to utilize, in order to pay for open spaces.

“The Pennsylvania Open Space Land Act offers us this option; you may not think it is equitable in that way,” he said. “Many taxes are not equitable. School taxes are not equal either. Many taxes weigh heavily on one group and less on the others. We’re following a very well-traveled path that other townships have executed. It is not like we are doing something that is inappropriate.”

Ferleger countered the point, noting that those that buy property in a township do so making a choice to take on the property and local tax obligations, where those with earned income taxes may not.

“This board has the authority to raise dollars through taxation to do anything, with no restrictions. So, in somewhat crass terms, the question gives the board a bit of cover to say residents approved this, but it restricts us,” said Tackel.

The decision on placing a referendum would need to be made by Aug. 8. This means that the board would have time with both June and July meetings to discuss the matter further. However, a vote was required to decide whether or not to have the solicitor prepare documentation, putting a referendum into motion with advertisement and future agenda appointment.

After weighing various figures, Scherpbier made a motion to authorize the solicitor to prepare an ordinance approving the placement of a referendum on the 2024 electoral ballot to add a 0.035% increase to the Earned Income Tax (EIT) in Upper Dublin Township.

Ken Cooper, of Fort Washington, made a public comment prior to the motion being put to a vote.

“I’m all for open space, not sure how much is available anymore in Upper Dublin, though. I don’t think there are any building space left,” said Cooper. “Commissioner Meredith: I agree, 100%. You’re asking for a certain percent of the population to pay for this. Unfair! You got rid of a golf course because it was touted as unfair to the general public because only golfers got to use it, and now it’s become a very viable active park. All for that. But to ask half the population to pay for something they may never see, they may never use?”

The resident said that he’d lived in Upper Dublin for over 40 years, and as an example, he has never had sidewalks on the street on which he lives.

“To ask half of this township to pay for something they may never see the benefit of?” questioned Cooper. “If you put it out there, it needs to be more clear for the public what it’s for.”

Cooper ended his public comment noting that, should the board move ahead with considering this referendum, he’d be “very vocal” about his disapproval.

“This board is empowered to ask the question of the residents if they would approv it or not,” said Tackel. “What this is doing is simply authorizing the township to place the question on the ballot, which may be clear or unclear, but permitted by law in the state of Pennsylvania, and let the residents in their entirety decide.”

Cooper then stated from his seat that the board isn’t doing its job.

“You are entitled to your opinion,” said Tackel. “But this is being done properly and according to the laws of Pennsylvania. You may not agree with the question, but the board is empowered to do exactly what it’s doing. A motion placed on the agenda, entered into the record and seconded and will be voted on. You may not agree with decisions we make, and that’s your prerogative, but I do take exception to your statement.”

The motion was then voted on in a roll-call fashion, with Scherpbier, Ward 5 Commissioner Cheryl Knight, Ward 3 Commissioner Gary V. Scarpello, and Fritzges all voting yes, in favor of the motion, and Ferleger and Tackel voting no.

The motion passed 5-2. The proposed referendum, if passed, would generate an extra $550,000 per year for the open space projects in Upper Dublin. Of the funds each year, 25% may per used for improvements to open spaces owned by the township, while the remaining 75% must be used for acquisition.

The topic will be on the agenda for further discussion in both June and July.