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Lower Merion CFO calls $6.9 million business tax revenue in 2011 'unpredictable'

The Lower Merion Township budget passed last night with an extra $6.9 million from unpaid business privilege taxes. Which businesses finally paid up remains protected by the Local Taxpayers Bill of Rights.

At a finance committee meeting Dec. 7, the public offered a slew of opinions on what should be done with the "unexpected $6.9 million" the township added to its 2012 budget, but few asked where exactly the money came from.

Township Manager Douglas Cleland announced at the beginning of December the township's General Fund would grow by $6.9 million after "some outstanding disputed obligations" were resolved from business tax revenues. According to the township's Local Taxpayers Bill of Rights, what businesses paid up to the township in order to accrue such a large sum remains confidential, Public Information Officer Brenda Viola said.

Chief Financial Officer Dean Dortone said though revenue streams in every year from unpaid business tax revenues, 2011 stands as an exceptional year.

"This is the largest amount I've ever dealt with," Dortone, who began working for the township in 2002, said. "You couldn't predict it."

But the unpredictable amount by which Lower Merion's budget grew doesn't make the way it did a complete mystery.

The township does audits annually to make sure businesses are registered and therefore paying their taxes. Dortone said the Finance Department took steps to enhance the auditing program between 2007 and 2008 but wouldn't say if the township learned of the unpaid taxes through auditing.

"I can say there are obviously a lot of audit-related revenues the township receives," he said.