COVID-19 Category

Category: COVID-19

Rough Road Ahead for Newtown Township

“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 [see "UPDATE on EIT" below]. 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 has been cut back to save money [read "2020 Road Program Falls Victim to COVID-19"].

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.

Meet Mack Monday, April 20, 2020, on Facebook

In this Facebook Live session I discussed: diversion of tax funds from road repair to cover the general expenses of the township (salaries, consultant fees, supplies, etc.), what Newtown Township can do to help local businesses, and the next step in getting approval to alter the Newtown area zoning code to allow for a Wawa or Wawa-like convenience store to be located in Newtown, Wrightstown, and/or Upper Makefield.

Read "Summary of April 20, 2020, Meet Mack Monday via Facebook Live".

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 [see "UPDATE on EIT" below]. How much of a hit is uncertain at this time [see UPDATE below]. 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.

UPDATE on EIT

In April, 2020, the 1.0 mill real estate tax slated to be used to borrow money to repave more than 5 miles of roads in 2020 was "re-allocated" to cover General Fund expenses - a drastic move in anticipation of an Earned Income Tax revenue shortfall of 8-11% due to the COVID-19 shutdown of local businesses. That shortfall, however, never materialized. According to Keystone Collections, which collects EIT, comparing earned income tax collections for 1/1/20 – 8/31/20 vs 1/1/19 – 8/31/19, Newtown Township specifically is up about $258,000.00 or 4.8%.

My Supervisor Activities: March Came in Like a Lion and COVID-19 Made It Go Out Like a Lamb!

In March 2020, I spent only 36 hours on official Supervisor business as COVID-19 forced the Township to cancel all meetings. Little did I know how prescient were my remarks a few weeks ago when I noted that March was coming in like a lion for us Supervisors and hoped it would go out like a lamb! [Read "February 2020: Another Busy Month! Marathon Toll Bros Hearing, LQBTQ+ Youth Get No Love, more... ".] Compare that to an average of 63.5 hours per month for January and February - a 43% decline!

Log of Hours Spent on Official Business

My log keeps track of the time spent on the following:

Attending “Required” Meetings
Preparation for BOS Meetings
Attending Optional Meetings/Activities
Interaction with Residents
Travel To & From Meetings

The height of each bar represents total hours spent on official business that day. This includes time spent at meetings. Blue indicates a required meeting was held that day, orange indicates it was a more-or-less optional meeting.
JZC = Joint Zoning Council, EAC = Environmental Advisory Council
After Newtown Township declared a public health emergency on March 13, all meetings were cancelled and there was not much for me to do as a Supervisor.

What This Report Does Not Include

My log of Supervisor-related activities does not include the many hours I spend posting to this blog, maintaining my personal website, writing a newsletter, creating and posting video clips from meetings, hosting podcast interviews, summarizing decisions made by the Board of Supervisors (BOS Definition), etc. Also not included is the time I spend posting to my personal Facebook page, Twitter account, and Instagram account. These activities are NOT part of my official duties as Supervisor, but represent my personal views.

Meetings

In March 2020, I spent 4.6 hours attending required BOS meetings and 5.9 hours attending "optional" meetings for a total of 10.5 hours.

Obviously, BOS meetings are the most important meetings - I am expected to attend them in order to satisfy my duties as a Supervisor. These include regular twice-per-month public meetings (except in July and August and sometimes in December), and non-public executive sessions. Optional meetings include public work sessions, and special meetings (see the list below).

“Other Meetings” I attended were optional. In March, 2020, I attended meetings of the Joint Zoning Council (JZC Definition) and Environmental Advisory Council.

In March, I spent 10.8 hours preparing for required Board meetings. This includes downloading and reviewing documents, including the Bills List (invoices paid by the Township), minutes of previous meetings, and police report.

Interaction with Residents

In my opinion, personal interaction with residents regarding their concerns is an important part of my responsibilities as Supervisor. I want to be sure that I spend enough time reaching out to and responding to residents via personal contact, official email via my johnm@newtownpa.gov account and via my personal john@johnmacknewtown.info account, and via phone and/or Facebook.

In March 2020, I spent 4.8 hours (13% of my total logged hours) interacting with residents. What did I discuss with residents? Here’s a partial list (some items are not included for confidentiality reasons):

Revised Love is Love Day Resolution (read "Newtown Township Passes Revised Love is Love Resolution")
Toll Bros proposed development (read "Residents Urge Newtown Supervisors to Abide by Spirit of Conservation Management Zoning Ordinance")
Voluntary plastics reduction program
Hoarder house in Newtown Crossing

I decided to keep track of my activities as a Supervisor on a monthly basis partly because I want to be accountable to residents, but also to make sure I am making the best use of my time. It's really an honor to serve the community! I learn something new every day and have met many fine people and volunteers who also put in a lot of time without any compensation at all. Thanks to everyone who help keep Newtown in business and safe.