The Jim Thorpe Borough Council convened for a special hearing last night at Memorial Hall to enact new taxes in order to help bridge the gap in the 2011 budget.
On the agenda were the adoption of two new taxes, an amusement tax and a local services tax, and the amendment of the occupational tax.
When asked how these taxes would contribute to bringing the borough's finances into the black, borough manager Wes Johnson admitted that the new tax bases alone wouldn't cut out the $125,000 deficit, but he noted that the council has been lobbied to bring in additional revenue from non-residents who are a significant part of Jim Thorpe's tourist-heavy economy.
Bart Springer, president of the Jim Thorpe Chamber of Commerce and owner of the Albright Mansion Restaurant, suggested that the council table these taxes until their efficacy could be better understood.
Much of the concern from those business owners in attendance about these ordinances wasn't so much about the taxation themselves, but the apparent lack of transparency and speed with which they were brought to the council.
"No one's trying to abdicate responsibility. We understand it's a difficult job," Dan Hugos, owner of the Dakota Ridge Gallery and co-owner of JTAMS productions, told the council. "I'm going to guess there will be further shortfalls to solve in the future." He explained that businesses were generally happy to contribute their fair share so long as they be included in discussions throughout the process.
Another downtown business owner and chamber of commerce treasurer Mike Guy, echoed a similar sentiment.
"There's the taxing side, which no one likes, but we understand. Then there's the spending side. If we're working as lean as we can, I have no problem with taxes, but if there's fat here, we have to trim it."
Speaking to these concerns, council President John McGuire responded that "we're not looking at any time to make money from the borough. We're trying to run this as we would our own homes."
After hearing from chamber of commerce members and local business owners, the council's first order of business was passing the amusement tax on admissions, an idea that has been entertained for a few years, and one that Johnson has been working on more seriously in the last few months.
The 5 percent tax rate will be levied on 40 percent of golf course green fees and 40 percent of the cost of bowling games, making the effective tax rate 2 percent for these activities.
The tax applies to 100 percent of cover charges, all other admissions, bike rides, carriage rides, guided tours and mechanical amusement devices.
The language of the amusement tax ordinance defines admission as the regular monetary charge for the privilege of attending or engaging in any entertainment or amusement.
Any increases in food, refreshment or merchandise prices while entertainment is offered, is construed as an admission charge.
The mechanical amusement portion of the ordinance applies to devices like juke boxes, pool tables and arcade games, and the maximum tax imposed on each machine is $25 per year.
The ordinance further defines amusements as "all manner and forms of entertainment within the Borough of Jim Thorpe," including, but not limited to, theatrical or musical performances, concerts, lectures, carnivals and athletic contests.
While the tax would be levied on for-profit athletic events, school related sporting events will not be taxed, as they are deemed educational. Other exemptions for religious, charitable, civic and nonprofit events are recognized by the ordinance.
Permits will not be needed for these exempted activities, but any person wishing to conduct an amusement within the borough must apply for a permit to be "displayed prominently" at each amusement location.
Tom Loughery, owner/operator of the Jim Thorpe eXperience, one such business that will be affected, told the council that this is "another example of how taxes kill businesses." The way his business operates, any tax increase will be paid out of his own pocket.
Beginning in January, employees in the borough will also pay a $25 per annum Local Services tax. Previously, taxing bodies charged a nominal occupational privilege tax.
Residents currently pay $10 per capita, and the Local Services tax is statutorily capped at $52.
The tax has an income threshold of $12,000 per employee per year, and it does not apply to any veteran with 100 percent disability, nor to any reserve member called to active duty within the calendar year.
It is the responsibility of the employer to divide the $25 tax between payroll periods, deduct the amount from their employees' paychecks and report the amount each quarter.
For those who work multiple jobs in the borough, or for those who work in both Jim Thorpe and in another municipality with a similar tax, priority will be given to the municipality of primary employment.
No taxpayer will be subject to more than $25 in total, nor to the payment of the Local Services tax in more than one municipality during each payroll period.
The only other issue the council dealt with during the hearing was an amendment to the occupational tax, changing the language of the ordinance to reflect the borough's policy, but not increasing the tax itself.
Since 2002, the borough has been annually adopting and collecting at a 5.5 percent rate, while the ordinance imposed a 5 percent tax. The amendment now recognizes 5.5 percent as the proper assessment.
The occupational tax is figured as a flat rate determined by an assessment rating of trades and occupation by the Carbon County Board of Assessment and Revision of Taxes.
The assessment rating places a value on an occupation, and residents with the same occupation pay the same tax, regardless of differences in income.
Carbon County had a similar occupational tax that was eliminated by the county commissioners in 2008.