October 29, 2020

Should Kennett Township have a local services tax?

That is the question supervisors will discuss in the coming weeks after they voted 2-1 at their Oct. 21 meeting to advertise consideration of the tax as a way to offset proposed budget expenses in 2021.

“We have a lot of requests and will not have enough revenue,” said Kennett Township Finance Director Amy Heinrich. “One opportunity is a local service tax … it’s to provide services to those that work in the township.”

Currently, she added, there is nothing in place for people working in but not living in the township to “help support the services they require during the day.”

The local services tax would be a maximum of $52 a year for everyone who works in the township and makes more than $12,000 a year. It could raise about $250,000 a year if enacted, Heinrich said.

A local services tax would be different than the 1 percent earned income tax already in place. The township receives EIT revenue from people who live in the township but work elsewhere, according to Heinrich, and EIT revenue from those who work but don’t live in Kennett Township is sent to the home municipality.

The proposed tax needs to be advertised once a week for three weeks before the supervisors consider approving it, and notification of a tax would need to be sent by Dec. 1 to Pennsylvania’s Department of Community and Economic Development, according to Heinrich.

Enacting a local services tax could be an alternative to raising taxes elsewhere.

“If we just go with the thought of where else we might raise revenue … we can tax on real estate for the general fund, which is inclusive of police,” Heinrich said. “We can also tax for dedicated fire and ambulance.”

Supervisors’ Vice Chairman Whitney Hoffman said the supervisors need to look at all the options.

“As the full budget picture is coming together, I think we need to be prepared and advertise it and make sure it’s an option,” she said. “One of the things we have to consider is whether it’s regressive and will have an impact. The whole point of this is to have these very public discussions. These are not easy decisions by any stretch.”

Township resident Nancy Dunbar cautioned against raising taxes, citing former township Manager Lisa Moore’s alleged embezzlement of more than $3.2 million from the township.

“I think we need to be very careful about raising taxes, especially since your former employee stole millions of dollars from the township and a lot of us are suffering from the pandemic this year,” she said.

Kennett Township supervisors will hold a special budget meeting tonight —Thursday, Oct. 29, — to discuss fire and EMS funding.

The meeting begins at 7 p.m. Instructions on how to join the remote meeting can be found at the township website, Kennett.pa.us.

Tonight’s meeting will continue a discussion that started at the supervisors’ Oct. 21 meeting. The Kennett Fire and EMS Regional Commission, which sets municipal contributions for Kennett Borough and the townships of Kennett, East Marlborough, Pocopson, Pennsbury, and Newlin, is asking its member municipalities to contribute 15 percent more in 2021, according to township Finance Director Amy Heinrich.

Kennett Township’s proposed fire and EMS budget would total $702,724, which includes the EMS Commission contribution and the township’s share of salaries and benefits, hydrant fees, workers’ compensation, and foreign fire tax contributions. The foreign fire tax represents funds from Pennsylvania that are then passed along to the commission.

“We have a three-year commitment” to the commission, Heinrich said. “We are using the lion’s share of the resources, and we do also pay the lion’s share.”

Supervisors’ Chairman Richard Leff said he wanted to get a better understanding of the increase, adding, “Is it fire responses or EMS responses that are driving it?”

Municipal contributions are set by the commission for a three-year period. From 2018 to 2020, Kennett Township paid $469,957.68 each year to the commission for its share of fire and EMS.

Supervisor Scudder Stevens suggested having representatives of Kennett and Longwood fire companies answer questions that the supervisors and the public might have.

“It’s not a dollars and cents thing from my point-of-view,” he said. “The issues are very, very complex, and have implications for the entire region.”