Downtown Development Substantially Responsible for Soaring Tax Rate

The 30% increase in Borough tax rates over the past three years, (including almost 6% this year without any increase in expenditures), has been driven by declining revenues resulting from the downtown development.

  The beautiful Plaza cost $2.5 million, which is $200 a square foot for outdoor construction.  Witherspoon House, with luxury apartments costing up to $3,500 per month, pays $100,000 a year in payments in lieu of taxes.  Its $4.1 million valuation means it should be paying $148,830.  So, over the next ten years, school and county taxpayers will subsidize Witherspoon House to the tune of over half a million dollars.

  The park and shop lot that sat on the Plaza site once produced about $650,000 in annual revenues.  Instead, there is a parking garage that costs $800,000 a year in debt service and $200,000 a year in operating costs.  Therefore, the garage needs to generate $1,550,000 in revenue just to put the borough back to where it was before the downtown development.

The garage has 485 spaces.  At the current pricing structure, if the garage had every space filled for 24 hours a day, 365 days a year, it would produce $2.8 million a year.  At the moment, the revenues are running at about half the $1.55 million needed to break even.  The basement spaces are substantially unusable because of a leaking foundation that will cost another $400,000 to repair.

Maybe the more than 800 voters who signed the petition against the downtown development knew more than the council.  The “area in need of redevelopment” designation, which denied taxpayers the right to influence the project, was a misuse of government powers intended to bring construction to abandoned urban areas.

The downtown development cannot be changed.  It will be an albatross around the wallets of borough and township taxpayers for years to come.  But should the people who botched the downtown development now be rewarded with re-election to develop the potential hospital site, pass McMansion zoning, or let police enforce underage drinking laws on private property? 

Private property rights are the flip side of civil liberties.  People can’t be free if their possessions are under threat from arbitrary government control or seizure.  Republicans limit civil liberties in the name of security while Democrats take property from one person to give to another in the name of development.  Now that courts are politically partisan, almost everyone has become a victim.

Meanwhile, the Council privatizes public property by limiting parking on Moore Street to please campaign contributors.  Our taxes are used simultaneously to subsidize private luxury housing and to deny us use of the roads for which we already pay.  This is triple taxation for nothing.  This is why taxes are soaring.

Fixing government finances will be difficult.  New thinking is needed.  Services need to be consolidated now.   The borough needs a jitney.  The taxis should have meters.  In a 24/7 economy, government offices need to be open evenings and on weekends.

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Contact: Joshua Leinsdorf