HARRISBURG, Pa. — Rules protecting the confidentiality of taxpayers in Allentown's Neighborhood Improvement Zone have prevented the zone's oversight committee from conducting state-mandated audits of the tax zone for more than a decade.
Since its inception in 2011, the 128-acre zone has generated more than $1 billion in new development in downtown Allentown and along its riverfront. However, throughout that time, state authorities and the Allentown Neighborhood Improvement Zone Development Authority have not conducted the level of audit spelled out by state law, as Pennsylvania Secretary of Revenue Pat Browne testified Tuesday afternoon.
Browne, who changed the law as a senator so the tax information couldn't be released through Pennsylvania's Right-to-Know Law, said he would support changes to the NIZ that would allow tax information to be disclosed for internal audit purposes.
Browne's testimony came after a months-long stalemate as state lawmakers attempted to access tax data to gauge the success of the NIZ. The law allows approved developers to reinvest state tax dollars they generate into paying off loans used to fund redevelopment.
Browne, who authored the legislation that created the NIZ as a Lehigh County state senator, previously gave senators NIZ tax information in aggregate but said detailed information about some tax categories — including cigarette taxes, bank shares, and vehicle rental taxes — could not be turned over. Only 38 businesses qualify for the special zone, and some categories have so few members that releasing the detailed information would amount to sharing the tax data of individual members, he said.
That answer hasn't sat well with Browne's former colleagues in the Senate. After months of negotiations went nowhere, they filed a subpoena for Browne to turn over the information, citing their broad authority to conduct investigations and oversee state functions. After losing appeals to the subpoena, Browne testified in the Senate chamber that he could not legally share some of the information.
The Department even approached individual businesses within the zone to ask them to waive their right to confidentiality so they could share information with state senators. The businesses declined, Browne said, though he declined to say how many he approached.
"I am very confident that our policy, which we have used for decades, is a very much liberal standard. The Department of Revenue wants to be as transparent as possible,"Pat Browne
Browne said that under state law, few organizations had oversight of the requested tax information given the extremely small sample of taxpayers in some instances.
Even the attorney general wouldn't be able to access it unless he was looking to prosecute tax delinquencies, he said. IRS standards advise not to share detailed tax information when there is less than 200 payers in a zip code, Browne said. His department was willing to go as low as two payers before aggregating the information.
"I am very confident that our policy, which we have used for decades, is a very much liberal standard. The Department of Revenue wants to be as transparent as possible," Browne said.
Majority Leader Joe Pittman, R-Indiana, appeared skeptical. In the last year, the NIZ generated $98 million, but nearly $64 million of that total was included in the aggregated category. Still, he welcomed Browne's willingness to support a legislative fix that would allow lawmakers and the administration to move on from the fight.
"If we can add those statutorial changes, that would be extraordinarily helpful," Pittman said.
State Sen. Jarrett Coleman, the driving force behind the review of the NIZ, attempted to ask why the shortcomings in the NIZ law weren't addressed years ago — presumably when Browne was still in office. Browne, a moderate Republican, was defeated by the more conservative Coleman in the 2023 Republican primary.
Some of Coleman's pointed questions, however, drew objections from Minority Leader Jay Costa, D-Allegheny. Questions about why the legislature didn't act in the past were beyond Browne's authority as secretary and were not related to the subpoena.
"This new information reinforces and makes more urgent the need for further examination. As we continue to review today's testimony, we will determine which next steps or referrals need to be made," Coleman said in a statement, noting he was disgusted with Browne's testimony.
Calls to Steve Bamford, the executive director of ANIZDA, were not immediately returned Tuesday.
