ALLENTOWN, Pa. — Lawmakers’ fight over tax records from Allentown’s Neighborhood Improvement Zone could end up in the state’s highest court.
A state Senate committee in July ordered Revenue Secretary Pat Browne to turn over a trove of information about the NIZ, a special taxing district in downtown Allentown that’s let developers keep many millions in tax revenues since its inception more than a decade ago.
Senate Republicans last month threatened to jail Browne if he didn't comply with that subpoena.
The full Senate voted Oct. 8 to hold Browne in contempt and ordered him to explain by Oct. 11 why he hasn't turned over those records.
Browne may one day have “real issues … [that] have to be decided by the courts,” but the case “does not yet present a justiciable issue."Commonwealth Court Judge Matthew Wolf
But Browne did not. He instead asked the state Commonwealth Court to quash the subpoena spearheaded by state Sen. Jarrett Coleman, R-Lehigh/Bucks, according to online records.
Browne has long worked to stop the publication of NIZ tax data. As a state senator, he amended state law to block a Right-to-Know request by The Morning Call newspaper for the same tax information.
He’s argued that some tax categories of NIZ revenues have so few taxpayers in them that releasing the information would amount to releasing the tax returns of some individuals and businesses.
Coleman, who took Browne’s seat in 2022, has led the push for the revenue secretary to disclose NIZ tax information.
He and other Republican lawmakers contend the General Assembly has broad investigative powers to act as a check on the executive branch.
Democratic lawmakers, including Senate Minority Leader Jay Costa, submitted legal filings this month in support of Browne’s refusal to share the tax information from the NIZ.
They argue the subpoena requires Browne to commit a misdemeanor by releasing private tax information.
Subpoena stands
A bevy of lawyers for Browne, Senate Democrats and Senate Republicans met Oct. 11 for a status conference about the litigation, and Browne was ordered to file more responses to Senate Republicans’ filings by Monday, court records show.
Commonwealth Court Judge Matthew Wolf on Tuesday denied Browne’s request for emergency relief, declaring the cabinet official’s case “is not ripe for determination.”
Browne may one day have “real issues … [that] have to be decided by the courts,” but the case “does not yet present a justiciable issue,” Wolf wrote Tuesday, citing a previous decision that set legal precedent.
The Commonwealth Court “will not decide issues raised by a legislative subpoena that are capable of being resolved by negotiation and compromise or change of heart,” Wolf wrote.
That ruling leaves intact Senate Resolution 334, which authorized a subpoena to force Browne to turn over eight types of tax documents related to the NIZ from January 2011 to December 2023.
Senate Resolution No. 334 by LehighValley Newsdotcom on Scribd
Browne on Wednesday appealed Wolf’s denial to the Pennsylvania Supreme Court, according to online records. No court date had been set as of Thursday evening.
NIZ spurs development
The Allentown Neighborhood Improvement Zone was established by state lawmakers in 2011. It covers 128 acres in Center City and along the western bank of the Lehigh River.
The NIZ is meant to incentivize developers to invest in the city’s “urban core” by letting them use state and local taxes to pay off bank loans or bonds that helped fund their projects.
Tax revenues from NIZ businesses also are used to pay down debts related to the PPL Center’s construction.
The NIZ does not keep property tax revenues generated by businesses in the zone. It generated more than $8 million in 2022 for the Allentown School District.
Officials and NIZ supporters credit the one-of-a-kind taxing district with fueling more than $1 billion of investment and development in downtown Allentown.
NIZ funding has supported almost three dozen projects, including some of the city’s biggest redevelopments, such as the $180 million PPL Center, the $121 million Five City Center Office Tower project, and the new $65 million Da Vinci Science Center.
Six other projects are under construction — including The Archer music hall — and four are in the planning phase, according to the Allentown Neighborhood Improvement Zone Development Authority’s website.
But also criticism
But the zone has repeatedly faced criticism that downtown’s renaissance is not benefitting the city as a whole.
Of the $91.4 million in NIZ-based, non-property tax revenues collected in 2022, just under $51 million will be sent back to developers with projects in the district.
City Center Investment Corp. received the vast majority of those 2022 tax revenues — a little more than $44 million.
It was the lead developer for about two-thirds of all finished NIZ-supported projects shown on ANIZDA’s website.
Finished City Center projects are responsible for more than $700 million in redevelopment investments, according to ANIZDA’s data.
City Center President J.B. Reilly is a childhood friend of Browne, who drove the NIZ’s creation while serving as Allentown’s state senator.
