Allentown, facing financial troubles in next year’s budget, will ask voters to allow an increase in the city’s deed transfer tax to help bolster revenue.
The proposal comes as early 2025 financial projections indicate a budget deficit of up to $6 million , finance director Bina Patel said, because the city’s existing revenue sources cannot cover increasing expenses like contractual raises for employees and rising health care costs.
She stressed that the projections are “not definite” and that more precise figures will be available when the city presents its 2025 budget sometime in the fall.
According to Lehigh County’s website, any document transferring an interest in real estate —- known as a deed — is subject to a 1% state transfer tax and 1% local transfer tax, which is split between the city, township or borough, and the local school district, and based on the property’s value.
Allentown’s city charter specifically disallows the city from raising certain taxes beyond 1996 levels, including the earned income, business privilege, emergency municipal services and deed transfer taxes. In order to change the city charter, residents must approve a ballot referendum question to add, alter or delete any provisions of that legal document.