Lehigh County Executive Pledges Not to Raise Taxes at State of the County Address
By Colin McEvoy on February 26, 2015
Lehigh County Executive Tom Muller has given his commitment that there will be no tax increase in 2016.
Muller made that announcement during the annual State of the County address on February 26, where he explained that Lehigh County is on strong financial footing and has fully emerged from the recession.
“We are financially sound,” Muller said to a crowd of more than 100 people at the Olympus Corporation of the Americas in Upper Saucon Township. “You’ve heard my projection – and it’s not a projection, it’s a commitment – there will be no tax increase in the 2016 budget.”
The annual State of the County address, Muller’s second since his election in 2013, was hosted by the Lehigh Valley Economic Development Corporation (LVEDC).
Muller noted that the 2015 tax rate is lower than it was 12 years ago, with a tax bill of about $668 for the average Lehigh County taxpayer. The county has erased a $7.8 million budget deficit from 2014, and Muller does not expect a budget deficit when the books are finally closed on the 2014 budget. Between the county administration and county commissioners, more than $13 million in tax cuts have been returned to the taxpayers over the last three years.
Muller also said both Lehigh County and the Lehigh Valley as a whole have recovered from the economic recession. Unemployment is at 5.2 percent, its lowest rate since April 2008, and dougle-digit job growth is expected in 2015, he said. The Lehigh Valley is one of 32 out of 80 U.S. metropolitan areas with higher per capita GDP and employment compared to 2007.
Home sales and the Housing Affordability Index are both up, Muller said, and the construction market in the Lehigh Valley is extremely active, particularly driven by the economic renaissance in downtown Allentown, but also due to economic activity throughout the entire Lehigh Valley.
Additionally, the Moody’s national credit rating agency has reconfirmed Lehigh County’s Aa1 rating. Muller said only two counties in Pennsylvania have a higher rating: the much larger Bucks and Chester counties. Additionally, S&P re-evaluated and upgraded Lehigh County for the third time.
“This is someone from the outside saying how we are doing and answering, ‘Should people invest in Lehigh County?’” Muller said. “The answer is a clear yes.”
Muller noted several economic development victories the county has seen in the past year, including the completion of Ocean Spray’s relocation to Upper Macungie Township, the Chinese manufacturer Fuling Plastics USA choosing Lehigh County as its American base of operations, approval of the Tax Increment Financing (TIF) to support the Hamilton Crossings center in Lower Macungie.
He also recognized online retailer zulily’s selecting neighboring Northampton County for a major distribution facility, and the establishment of a Community Revitalization and Improvement Zone (CRIZ) in Bethlehem.
“We’ve had a lot of wins in the Lehigh Valley,” Muller said.
Nevertheless, Muller acknowledged there are challenges ahead for Lehigh County. Underemployment continues to be an issue for some families, and homelessness remains a problem across the region. Additionally, local school districts struggle to stretch budgets and sustain non-classroom programs, he said.
“Am I saying it will be easy? Absolutely not,” Muller said. “It will not be easy. There will be challenges.”
Lehigh County has seen a recent influx of retirements. With 192 retirees in 2015, the county lost more than 4,000 years of experience, including many workers who directly reported to department heads. Retiree costs are already projected to exceed budget, Muller said, and major union contracts are in arbitration or negotiations.
The county’s financials also depend heavily on funding from the state, which adds a level of unpredictability to preparing the budget. But Muller said Gov. Tom Wolf brought welcome news during his visit to the Lehigh Valley on Feb. 25, where he announced his plans to cut the corporate net income tax in half and introduce millions in tax credits for the state’s manufacturing sector.
“He had good news yesterday that will help us and help the state bring more companies to the area and allow us to keep and add more manufacturing jobs,” Muller said. Gov. Wolf’s visit was hosted by LVEDC and the Lehigh Valley Partnership.
Muller said the focus in county government should be on needed services, not the tax bill. By committing not to raise taxes next year, he hopes the rest of the budget season will be focused on that area.
“I don’t normally do this, but I’m going to get out ahead of all the politicians and maybe take taxation out of the discussion a little bit, and focus more on what we want to do,” he said. “We haven’t closed the books fully, but I’m comfortable with the strength of my team. I know what they can do, I know where we are, and my commitment to you is there will be no tax increase in the county’s 2016 budget.”
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