Against the backdrop of dwindling host community fees from Waste Management and to prevent financially impacting senior citizens and residents living on fixed incomes, the Falls Township Supervisors begrudgingly approved enacting a 1-percent earned income tax.
Following a presentation from Peter Angelides of EConsult Solutions Inc., and comments and questions from the Supervisors and several residents, the board on Monday voted 4-1 in favor of implementing the EIT, which took effect on Jan. 1, 2023. Supervisor John Palmer cast the lone no vote.
According to Angelides, Falls stands to gain $7.2 million in additional funds stemming from the EIT next year. Of the $5.7 million to $5.9 million derived from EIT on Falls residents, Angelides said only 32 percent – or $2.3 million – would be new taxes.
Once the tax is enacted, it would only change where the tax is paid, not how much. Instead of taxes being paid to another town, residents’ EIT would be paid locally, to Falls Township.
The only exception is for people who work in Philadelphia. Those employees would continue paying their EIT to the City of Brotherly Love.
The tax would not impact non-working senior citizens, those who are unemployed, or workers who earn less than $8,000 per year. In general, the EIT would be paid by anyone earning more than $8,000 per year while working and/or living in Falls Township.
Supervisor Erin Mullen, who in November opposed advertising the EIT, took time to educate herself on the need for an EIT, while addressing community concerns. At the December meeting, in response to a resident requesting that the Supervisors instead raise property taxes, Mullen said, “an EIT is the single most effective way to generate revenue.”
Recognizing that the Waste Management host community fees have an end in sight, Mullen said the Supervisors had no choice but to act as “the sand is running through the hourglass.”
“Our general fund is not self-supporting,” Mullen said. “It’s not sustainable as-is.”
Falls Township is among the last of the 54 municipalities in Bucks County to enact an EIT. For years some residents, including the late Guido Mariani, have urged the board to institute the tax. Supervisors Brian Galloway and Chairman Jeff Dence mentioned Mariani in their comments.
“We got your message,” Galloway said. “We understand it’s good for seniors. I’m sure he’s proud of us.”
Bristol Borough, Langhorne Manor, Yardley and Lower Makefield are the only municipalities in Bucks County without an EIT.
The township’s 2023 budget projects $5.25 million in revenue generated from the EIT, which would reduce the township’s reliance on landfill host community fees to $10.3 million, according to Finance Director Betsy Reukauf, who figured her estimate on Pennsbury School District collecting one-half percent of the EIT beginning in July. While that may not happen, Reukauf said she did not want to finalize a budget based on projections that could be overstated.
Township attorney Mike Clarke said that for Pennsbury to collect half of the EIT, the district “would have to do it for everyone in the district.”
“They can take our half, but they have to impose that percentage on everyone in the district,” Clarke said. “It has to be uniform.”
Palmer said the EIT should have been one-half percent to start. He also said the Supervisors should have formed a steering committee and involved residents.
“It was coming,” Palmer said of the EIT. “But we could have done it differently.”
After a resident said the EIT should be “the last resort, not a first option,” Dence said the board needed to act now.
“It’s not a hard decision. It’s a big decision,” Dence said. “To wait until the landfill’s full and start taxing people then would be foolish.”
Falls should have implemented an EIT five years ago, Dence said. With approximately $130 million to $140 million in Waste Management host community fees remaining, Dence said the time is past due to start reducing the township’s reliance on the landfill.
“It’s a long time coming,” Dence said. “I know it’s not a popular decision.”
The EIT is a means for Falls to wean off the more than $1 million per month financial windfall that has been the landfill. The EIT is a first step in securing the financial future for Falls once the landfill closes in the next 10 to 12 years.