As reported in Part 1 which can be read here, the Bethlehem Landfill contributed $2.6 million to Lower Saucon Township in 2022 and has contributed a similar amount annually for many years. To put the significance into perspective, one first needs to understand how municipal taxes are levied and how Lower Saucon, for example, determines 'what to charge' its residents.
In the most basic terms, municipalities have expenses to pay, and they receive revenue to pay for those expenses. To determine how much to charge the taxpayers to balance their budgets, municipalities use a ‘millage rate’, or 'mill rate'. This relatively obscure term represents the amount of tax levied on real estate property. A mill is one thousandth of a dollar, or one tenth of one cent.
The actual formula to determine how many mills to charge property owners, in its most simplistic form, would be mills = total municipal budget divided by the total available tax base. Lower Saucon Township's mill rate charged to Township residents is based on (and includes) the $2.6 million from Bethlehem Landfill.
If the landfill is not permitted to continue operating (and expanding as necessary) or worse, is shut down, $2.6 million will disappear from the Township’s available tax revenue. Bethlehem Landfill also contributes another roughly $400,000 in property taxes to Saucon Valley School District. In total, the tax benefit to Lower Saucon Township is approximately $3,000,000.
Just like a personal household budget, if that sum of income is no longer paid, the mill rate must increase to fund municipal and school obligations, or those obligations much be reduced. Consider also that Lower Saucon Township's entire annual budget is approximately $9,000,000. The budget consists of necessary costs made up largely of the many services often taken for granted - police services, public works, parks and recreation, personnel, vehicles, and equipment, etc. Unlike a personal budget where discretionary spending may vary widely, the municipal budget is essentially fixed to maintain the same level of municipal services.
Some have suggested that the Township has enough money to run its budget without landfill host fees. Consider the effect on your household budget if you suddenly took a 30% pay cut. The consequences to you and your ability to meet your financial obligations would be difficult at best and perhaps impossible and catastrophic at worst.
Council President Jason Banonis explained it like this: “So what does that [$2.6 million in landfill host fees] represent? One mill equals $430,000 across the Township’s properties. One mill is $100 on each $100,000 of assessed property value, to your homes. The money that that represents, that $2.6 million, represents 6 mills. That’s 6 mills that we get from the Host Fee from the Bethlehem Landfill to Lower Saucon Township.
Banonis went on to state that Lower Saucon Township would not be the only entity affected by loss of landfill host fees, as the “Saucon Valley School District receives about $400,000 in real estate taxes from the Bethlehem Landfill.” So, by his account, without the host fees from the landfill, Township residents would have to make up the 7 mill shortfall.
But how much more is your share of 7 additional mills? That’s the real question. And this is where it gets scary.
First, a statistic from the Lehigh Valley Planning Commission. One-third of Lehigh Valley residents are “cost-burdened”, which is defined by the LVPC as “a household that is cost-burdened is paying more than 30% of gross income on housing costs and is more likely to struggle to pay for other basic needs such as utilities, healthcare, childcare, transportation, and food”. [source]
By looking at the economic demographic of Lower Saucon Township (which President Banonis provided during his remarks), we can estimate the additional cost to taxpayers. Based on 2020 U.S. Census data, there are 4,035 households in the Township, with a median home value of $300,000, per the 2020 U.S. Census. But according to Rocket Homes, the median sale price for Township homes is $524,900. This would be the basis for calculating required taxes – the available tax base.
Without the landfill host fees, an additional 7 mills would need to be charged to all Lower Saucon households to make up the difference. And 7 additional mills on a median house value of $500,000 equals $3,500.
Without the host fees from the Bethlehem Landfill, Lower Saucon households could face paying an additional $3,500 – year after year. Can readers afford paying another $3,500 in municipal and school taxes - every year for as long as they live in Lower Saucon? Even if their household budget could absorb that shock, do they really want to?
Check back for Part 3 – “Council Approve Agreement with & Easements for Bethlehem Landfill.”