[Chart: About 60% of Newtown Township' revenue comes from Earned Income Tax (1% tax imposed on earned income including salaries). Even a small decrease in that revenue source can have a big impact on Newtown's financial health.]

 

As Goes the Success of Local Businesses, So Goes the Solvency of 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 (e.g., Earned Income Tax or EIT) face financial difficulties if the shutdown continues much longer and people do get their jobs back.

 

Newtown Township's over-dependency on business-related tax can lead to what I call a "COVID-19 Domino Effect" whereby as businesses remain shut and as more local workers are laid off or furloughed, eventually the township will face a financial crisis due to lack of revenue and increased expenses necessitated by the pandemic.

 

To help keep the township stay afloat until the end of the year, management has already made some "drastic" choices that will impact road repairs.

 

Read my article in the Newtown Patch to learn about how Newtown area businesses are dealing with the COVID-19 restrictions and about the decisions made by Newtown Township as a result of lost revenue.