Newtown News Update

Hello ,

Welcome to the April 13, 2020, issue of Newtown News Update. Back issues and subscribing information can be found here.  If you do not wish to receive further updates, please use the "Unsubscribe" link at the bottom of this email. The opinions expressed here are solely the those of John Mack and do not reflect the opinions of any other person or entity.

Rough Road Ahead for Newtown Township, Its Businesses, and Its Citizens

“Extraordinary times call for extraordinary measures.” These are indeed extraordinary times with many businesses forced to close and millions of people out of work due the measures necessary to contain the Coronavirus pandemic. And municipalities like Newtown Township that depend upon business and job related taxes face financial difficulties if the shutdown continues and people do not get their jobs back.

It is unknown to what degree the COVID-19 shutdown will affect the Township's finances. Obviously, Earned Income Tax (EIT) Definition will likely take a hit due to the temporary or permanent closure of businesses. Real Estate Transfer Tax Definition will also likely be, or become, compromised as people brace for a potential financial impact.

In addition, charges for public safety (permits) may decline if building and construction drop off, and the township's Parks & Recreation programming revenue stream may be significantly less if the township has to cancel summer camps.

These are major sources of revenue that fund the day-to-day operation of the Township as well as projects such repaving roads, which may be cut back to save money.

Also, Keystone Collections, which manages municipal and school tax administration, collects local EIT Taxes. Keystone extended the Individual filing deadlines to match the State and Federal date of July 15, 2020. This delay in collecting EIT will also negatively impact Newtown Township’s ability to carry out needed services.

Given that many Newtown Township residents and non-residents who work in Newtown may be laid off for weeks, if not months, it is likely that Newtown will take a hit on EIT revenue in 2020. How much of a hit is uncertain at this time. But as little as a 10% reduction in EIT (see chart) could mean bad news regarding the township’s fund balance and consequent bond rating.

What You Need to Know About EIT

EIT is a tax for general revenue purposes in the amount of 1% imposed on earned income including salaries, wages, commissions, bonuses, incentive payments, fees, tips and other compensation received by residents of Newtown Township and by nonresidents of Newtown Township for work done or services performed or rendered in Newtown Township. This includes 1% of the net profits received from businesses, professions or other activities conducted by residents of Newtown Township and by nonresidents of Newtown Township. For Newtown, this tax represents 61% of the total General Fund revenue projected for 2020.

NOTE: 0.5% of Resident EIT goes to the township and 0.5% goes to Council Rock School District. The full 1% of Non-resident EIT goes to the township.

How Have You Been Impacted by COVID-19?

Given the fact that the Township heavily depends upon tax revenue from local businesses and the employees they hire, the closure of these businesses and the subsequent employee unemployment may have a big impact on the township’s financial health, delay major public improvement projects, and may even lead to a negative general fund cash balance.

To prevent that, as a Newtown Township Supervisor, I will be called upon to make critical decisions in the coming weeks in response to this situation.

Consequently, it is important that I get feedback from local businesses and employees that have been impacted by COVID-19 to help me determine the likely worst-case scenario and make informed decisions to prevent that.

To get that feedback, I am hosting two COVID-19 Impact Surveys – one for local business owners and one for local residents/employees.

If you are a business owner, please take my COVID-19 BUSINESS Survey

Take My COVID-19 Business Survey

If you are/were employed by a Newtown Township business, please take my COVID-19 EMPLOYEE Survey 

Take My COVID-19 Employee Survey

Access to Every Article I Wrote While a Newtown Township Supervisor!

I have created an index to dozens of articles published in Newtown News Update and News of Interest to Newtown Area Residents e-newsletters going back to August 2017. It’s an interesting look back on issues that I have had to deal with as a Newtown Township Supervisor.

Articles are arranged by topic:

  • Communications
  • Development
  • Discrimination
  • Drugs & Opioid Epidemic
  • Environment
  • Finances
  • Governance
  • Infrastructure
  • Miscellaneous
  • Public Health & Safety
  • Quality of Life
  • Traffic & Parking
  • Zoning

Go to the index…

John Mack