Upper Darby Mayor Barbarann Keffer, who is in her final weeks in office.
(PETE BANNAN-DAILY TIMES)
Upper Darby Mayor Barbarann Keffer held a town hall meeting Thursday evening to present her plans for a 1% earned income tax.
In a press release, the administration said the EIT is projected to generate $9 million in revenue during its first full year of implementation, which would be 2024, if approved.
The EIT would not apply to interest earnings, dividends, social security, capital gains, lottery winnings, unemployment, third-party sick pay, insurance proceeds, gifts, bequests, inheritances, and active military duty pay, officials said.
“The EIT is part of a multi-pronged financial strategy to secure the future of Upper Darby, which includes the implementation of the realty transfer tax two years ago, the inclusion of third parties to manage delinquent taxes and fees and the business privilege tax as well as a stronger project and purchase bidding process, which has resulted in higher revenues and lower costs over the last four years,” Keffer said.
Keffer, who is in the final weeks of her term, said she’s not exactly certain how much money would be raised, but the township has been consulting with management firms and from that they arrived at the $9 million estimate.
Keffer said the township hopes to reduce a long-term structural deficit.
“We’re in a tight spot here in general: want to provide excellent services, great public safety services, but we need revenue for that,” Keffer said. “The township relies heavily on property taxes, which have been flat and it is the only municipality of its size in the state that does not rely on an EIT.”
About 95% of municipalities in the state and 23 of 49 Delaware County municipalities already have an EIT, including Chester, Aston, Media, Thornbury and Tinicum.
Under the mayor’s plan, the EIT revenue would allow for at least five new police officers, fund a fire marshal’s position, add a communications director as well as a grant fund manager, and would increase the recreation department by $75,000, and capital improvements. If the township could build the capital fund balance, it could lower borrowing costs.
A hearing in township council on the ordinance is scheduled for Nov. 29, and if passed, it would take effect Jan. 1.
A request for a comment from Mayor-elect Ed Brown on the EIT was not answered.
The tax would be collected by a third-party firm that handles similar taxes for other municipalities.
Keffer said increasing retirement pension liabilities are a driver to the long-term deficit.
Acting Chief Administrative Officer Alison Dobbins said there are very few options left in terms of raising revenue or cutting funds, temporary fixes and short-term solutions.
“This is something the experts have told us is something that needs to happen,” Dobbins said.
Keffer said the township is trying hard not to spend money. The township has the third-highest real-estate tax rate in the county behind Chester and Millbourne.
Upper Darby Police Superintendent Timothy Bernhardt said five new officers would allow the department to improve community-affairs policing.
Dobbins said they are looking at a minimum income cutoff. Keffer noted Narberth has a $12,000 minimum cutoff.
“People don’t want to pay more in taxes, I get it,” Keffer said.
Keffer said an EIT could help seniors stay in their homes and that is something the township needs. Relying on property tax increases are not sustainable.
She noted if you live in Upper Darby and work in Philadelphia your tax will not change. The tax would most impact commuters and renters.
At the second public hearing on the budget, Council President Brian Burke took the opportunity to criticize the mayor for not releasing federal American Rescue Plan Act funds to the five fire stations parks and recreation, the senior center in Pilgrim Gardens as well as $800,000 to the arts program and the Safe Corridors program.
Burke also said the reason for the need for additional taxes is overspending.
“We built things that we thought were going to cost something and they cost another,” he said.
He then pointed to the electric car chargers in the township lot, which offered free with electricity and are now going to charge $3.50 per hour because of the expenses associated with them.