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UPDATE: Sen. Jarrett Coleman subpoenas Allentown NIZ tax records

230418 PSB meeting Coleman.jpg
Olivia Marble
State Sen. Jarrett Coleman intends to hold a vote Wednesday that would subpoena Secretary of Revenue Pat Browne to release tax revenue data from the Allentown Neighborhood Improvement Zone. Browne, a former lawmaker, has argued for years some of the NIZ tax data covers a small handful of individual or businesses and should be treated as confidential.

ALLENTOWN, Pa. — State senators issued a subpoena for Secretary of Revenue Pat Browne Wednesday, escalating a battle over long-secreted financial information about the city's signature special tax zone.

The Senate Intergovernmental Operations Committee ordered that Browne turn over more than 20 categories of tax information about the Neighborhood Improvement Zone dating over a 13-year period.

The NIZ, the only one of its kind in Pennsylvania, allows approved developers working in specific areas of Center City to repurpose newly generated tax revenues to pay off debt debt on their redeveloped properties. Since its inception, the NIZ has generated more than $1 billion of redevelopment in its 128-acre area, including the PPL Center, the Waterfront development and a host of luxury apartments.

Sen. Jarrett Coleman, R-Lehigh/Bucks, has been skeptical of the NIZ. Last year, he successfully pressed the Senate to audit the zone and the Allentown Neighborhood Improvement Zone Development Authority, the body tasked with administering the program.

"I will make the bill to remove the NIZ language all together if we don't get this information."
State Sen. Chris Dush, R-Jefferson, before voting in favor of a subpoena for 13 years tax data from Allentown's Neighborhood Improvement Zone

However, the Department of Revenue has refused to fully cooperate. While it turned over some tax information, other tax categories have been grouped together, making it impossible for the auditors to complete the report as instructed.

Browne, who authored the NIZ law as a state senator representing Lehigh County, has argued in the past that the NIZ is so small that some tax categories apply to only one or two individuals or corporations. Releasing that information would amount to turning over individual tax records. The department has adopted the same argument while declining lawmakers' requests for more information.

By Wednesday's vote, the debate had morphed into a dispute about the limits of the General Assembly to serve as a check on the executive branch. Non-partisan attorneys have determined that state lawmakers have broad oversight authority of state tax dollars even when that information would otherwise be confidential.

Sen. Chris Dush, R-Jefferson, said Gov. Josh Shapiro's administration needed to respect legislative authority. Exceptions to confidentiality laws apply to oversight committees, he argued, so there is no legal reason for the Department of Revenue to deny their request. He promised serious repercussions if the administration refused to play ball.

"I will make the bill to remove the NIZ language all together if we don't get this information," Dush said.

The subpoena motion was opposed by all three Democrats on the nine-member committee. Sen. Christine Tartaglione, D-Philadelphia, argued the subpoena would force Browne to commit a misdemeanor by releasing the information because it violates the confidentiality of that small group of tax payers. Even if lawmakers have the power to strongarm the release of such information, it doesn't make it right, she said.

"We don't don't do it because it breaks with our nation's highly cherished right of privacy," she said.

The subpoena vote came two weeks after a joint, bipartisan financial oversight committee of the General Assembly failed to issue a subpoena of its own. The 12-member Legislative Budget and Finance Committee, which includes equal numbers of Democrats and Republicans, deadlocked along partisan lines with Democrats opposed to forcing the matter.

Coleman, Dush and Tartaglione are members of both committees. While Coleman and Dush said it was appropriate for the Intergovernmental Committee to take up the case, Tartaglione objected, saying it only reached the conclusion because Coleman had an axe to grind.

Wednesday's meeting was the first of 2024 for the Intergovernmental Operations Committee, which Coleman chairs. The vote took place during a week of high-pressure negotiations as Senate Republicans, House Democrats and Shapiro attempt to hammer out a deal for the 2024-2025 budget, which was due a week-and-a-half ago.