- The three townships in Parkland School District rejected an agreement to continue to give the district $5 from its Local Services Tax
- The district now will lose an estimated $300,000 in revenue, according to a document from South Whitehall Township
- A district spokeswoman said that figure is not accurate
NORTH WHITEHALL TWP., Pa. — A longstanding agreement between the Parkland School District and its township has ended, leaving the district with a loss of revenue.
North Whitehall on Monday became the last of the three Parkland School District townships to reject a proposed memorandum of understanding with the district, in which they would continue to give the district $5 from its Local Services Tax.
By rejecting that memorandum, the townships will gain — and the district will lose — a collective estimated $300,000 in revenue each year, according to an information packet from South Whitehall Township.
It's unclear how much money the district will save by closing the tax office.
South Whitehall Information Packet by lehighvalleynews on Scribd
District spokeswoman Nicole McGalla said previously in an emailed response that it is “not accurate” that the district will lose $300,000 from closing the tax office.
She said the district would not have further comment until it hears from the townships.
The Local Services Tax is levied on residents and nonresidents who work in the township. It helps pay for police, fire and emergency services.
“We simply don't feel that legally we can pass that money onto the school district when we're providing that service.”Township Solicitor Thomas Dinkelacker
Parkland School District’s tax collection office used to collect it, but the school board voted in July to close the office because the person who heads it is retiring.
North Whitehall supervisors voted to reject the proposed memorandum because the district is no longer collecting the tax.
“We provide the services for which that tax is offered,” township solicitor Thomas Dinkelacker said. “We simply don't feel that legally we can pass that money onto the school district when we're providing that service.”
Township Planning Commission Chairman Brian Horwith praised the move and said the township’s new Local Services Tax collector, Berkheimer, will charge less than the district did.
“That's capitalism, right? Competitive markets by vendors — that’s OK,” Horwith said. “So that's a good move. We reduced the cost.”
South Whitehall and Upper Macungie townships previously also voted to reject the district’s proposed memorandum.
Why the district sought the tax revenue
The current dispute between the townships and the district stems from a 2007 agreement between them.
In 2007, the state passed the Local Tax Enabling Act, which let the townships levy a $52 Local Services Tax.
The school district had previously collected a $10 tax, but after the law went into effect, the district was limited to a $5 tax.
To prevent the district from losing money, the three townships in the district agreed to give the district $5 of the Local Services Tax, along with a $1 collection fee.
Part of the 2007 agreement was that the school district would collect the Local Services Tax for the townships. When the school board voted to close its tax office, that agreement was terminated.
The district then proposed the new memorandum with the townships. If the townships had agreed to it, they would continue giving the district $5 of the Local Services Tax, but not the $1 collection fee.
During Monday’s meeting, Dinkelacker said he thinks the district is concerned about the loss of revenue.
“The school [district], I think, was concerned about a budget deficit because this money had been budgeted prior to the tax office closing,” Dinkelacker said. “At least, that's how I understood it.”
School board candidate Bobby Lanyon, who is running on a slate that opposes the incumbent candidates, previously criticized the board for its vote to close the district’s tax office because of the potential loss of revenue.
This report will be updated with comment from the school district.
