Jim Thorpe residents and business owners are concerned that the popular Lehigh Gorge Scenic Railway could leave town because of a dispute over amusement taxes.

“It would be a very large hit to my business and other local businesses. It would be a devastating thing for employment, and I think it’ll just be a detriment and a black eye to the town,” said Darren Behan, whose family owns Molly Maguire’s Pub and Restaurant.

Reading Blue Mountain and Northern Railroad and Berkheimer, an agency which collects taxes for the borough and Jim Thorpe Area School District, are currently battling in court over whether the railroad owes $90,000 in amusement taxes from the past three years.

Berkheimer has asked a Carbon County Court to order the railroad to pay the back taxes. However borough council has agreed to delay court proceedings until the end of November in hopes of meeting with the railroad to discuss the situation.

About 30-40 residents and businesspeople attended Thursday’s meeting of borough council because of online rumors that the railroad plans to leave the borough because of the dispute.

Council members said that while the court battle is ongoing, they haven’t heard anything from the railroad about plans to move its passenger rail excursions elsewhere.

Behan, whose family business is located directly across the street from the train station, said it could cripple Jim Thorpe’s tourism business if the railroad left town. He said his employees are scared.

Other business owners said they are concerned about the impact if the train were to leave Jim Thorpe.

Maria Lloyd, who owns Artisan Gifts, said the train excursions are a major driver of tourism in the borough.

“There are more visitors, more business, and one of the attractions I always propose to my visitors is the train station,” she said.

Council President Greg Strubinger said that it costs money to provide services for tourists who visit the borough, like police coverage. He said the amusement tax helps to cover that cost so they don’t have to pass it along to taxpayers.

“It comes down to, are the residents willing to bear more of the cost of providing these services, or should the people coming in and visiting bear some of that cost as well,” Strubinger said.

Mayor Michael Sofranko said that before Reading Blue Mountain and Northern started operating in Jim Thorpe in 2004, the previous operator George Hart paid the amusement tax each year.

Councilman John McGuire said that the borough didn’t try to collect the tax from RBMN because the railroad had taken the legal position that a 1908 federal law exempted passenger rail lines from amusement taxes. Berkheimer determined that wasn’t the case, and attempted to collect the back taxes. That led to the current situation.

Dan Hugos of Mauch Chunk Opera House said that his business was in a similar situation as the railroad several years ago, where it had to pay back amusement taxes.

Hugos said that while it was difficult, he understood why they had to pay it. He believes the railroad should as well, however he urged the borough to be careful because of the fact that the railroad could potentially move their business out to an area which doesn’t charge amusement tax.

“This problem requires a creative solution, and what people are hoping for and expecting from this body is leadership,” he said.

Some people said they wanted to see the railroad pay its fair share of taxes.

Patricia Handwerk of the Harry Packer Mansion said she supports the train, but said that all of the businesses that make Jim Thorpe a destination pay their fair share of amusement taxes.

“If he doesn’t pay his taxes, why should the rest of us pay our taxes,” she said.

Behan said he doesn’t want the borough to overlook the taxes owed by the railroad, but he said they should work together with the railroad to come up with a way to continue the positive economic benefit it provides to Jim Thorpe.

He said the $30,000 per year in tax revenue the borough and school district would make off the railroad is much less than the town would lose if the railroad left for another location.

“We would be revolving backward. I’d hate to see that for the town and the residents,” he said.

Sofranko said in order to come to a solution, the railroad needs to meet with borough officials. That hasn’t happened yet.

“Council has asked that, Berkheimer has asked that, the borough manager has asked that, Rep. (Doyle) Heffley has asked that, Sen. (John) Yudichak, they have all asked that. I think that’s where the conversation starts,” he said.