2017 Comparative Tax Analysis

King of Prussia District | Comparative Tax Analysis | Report

Table of Contents 1.0

Introduction ........................................................................................................................... 1 1.1 1.2 1.3

2.0

Methodological Approach ................................................................................................. 3

2.1 2.2 2.3 3.0

Competing Locations ................................................................................................. 3 Selected Industries ....................................................................................................... 4 Data Sources, Assumptions, and Limitations............................................................ 5

Comparing Taxes Across Jurisdictions, 2011 and 2017 .................................................... 6 3.1 3.2 3.3

4.0

Purpose of this Study ................................................................................................... 1 Connection to Upcoming Location Comparison Analysis .................................... 1 Overview of Report Structure ..................................................................................... 2

Tax Types and Rates .................................................................................................... 6 Municipality and School District Tax Rates ............................................................... 6 County Real Estate Tax Rates .................................................................................... 8

Industry Specific Results and Rankings ............................................................................. 10 4.1 4.2 4.3 4.4

Tax Burden Ranking Approach ................................................................................ 10 Tax Burden Ranking By Industry ............................................................................... 10 Composite Rankings.................................................................................................. 12 Implications for Interpreting and Projecting Rankings.......................................... 12

Appendix A: Demographics of Each Jurisdiction .................................................................. A-1 Appendix B: Development of Business Archetypes ............................................................... A-3 Appendix C: Tax Types and Tax Rates for the Taxing Jurisdictions ...................................... A-4 Appendix D: Additional Detail on Tax Burden Across Jurisdictions .................................... A-14 Appendix E: Additional Detail on Municipality Budgets – 2011 and 2017 ........................ A-17 Appendix F - About Econsult Solutions, Inc ........................................................................... A-21

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King of Prussia District | Comparative Tax Analysis | Report

1.0 INTRODUCTION 1.1

PURPOSE OF THIS STUDY

King of Prussia, located in Upper Merion Township (the Township), is one of the Philadelphia region’s largest commercial centers. It is home to King of Prussia Mall, the largest mall in the U.S., the new King of Prussia Town Center, as well as a growing amount of other retail, commercial office, medical, and residential uses.

To grow its job base and maintain its fiscal health, the Township must do what it can to offer a welcoming environment for businesses, residents, and visitors alike. One important factor in location choice decisions, and one that is within the Township’s ability to control, is tax policy.

This is particularly true for suburban locations that are competing with their neighboring jurisdictions for residents and businesses, as two otherwise similar locations may differ greatly in terms of tax burden depending on which side of a jurisdictional boundary they are on. Consider, for example, a commercial office tenant, which would otherwise have access to the same base of employees, customers, and vendors regardless of where it is located in the region, but whose tax bill may differ greatly depending on the taxing jurisdictions (municipality, school district) in which it is located.

In 2011, King of Prussia District (KOP-BID) commissioned Econsult Solutions, Inc. (ESI) to analyze the Township’s tax position as compared to other nearby jurisdictions against which it competes for business and employees, particularly as it related to commercial office tenants. We found that the Township was in the middle of the group in terms of the tax burden of these competing jurisdictions. It had a lower tax burden than locations perceived as being high-amenity and high-status like Radnor and Conshohocken and a higher tax burden than locations perceived as being low-tax like Newtown and neighboring Tredyffrin. Then in 2013 from this work, we developed tax policy recommendations to improve the competitive advantages of locating a business in King of Prussia.

Since then, broader real estate market trends as well as unique fiscal pressures faced by individual jurisdictions necessitated an updated look at the comparative tax landscape for the Township. KOP-BID has asked ESI to revisit its comparative tax analysis and offer guidance on how the Township may fare going forward.

1.2

CONNECTION TO UPCOMING LOCATION COMPARISON ANALYSIS

As noted above, tax considerations weigh heavily in the location choices of residents and businesses. Tax policy is something individual jurisdictions can directly control, as opposed to

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King of Prussia District | Comparative Tax Analysis | Report

other characteristics that may factor into attracting people and firms, such as climate or proximity to an international airport.

However, individuals and companies make location decisions based on a number of factors beyond tax burden, and many of those factors can be influenced by the policy choices of individual jurisdictions. For example, individual jurisdictions may offer technical assistance resources and business incentives to attract and support firms, or it may invest in transportation infrastructure and streetscaping enhancements to create a more vibrant business environment.

ESI’s past work for KOP-BID included analyses of these factors in evaluating the Township’s competitive position relative to neighboring jurisdictions. In the near future, ESI will be completing a companion analysis to this tax burden analysis for KOP-BID. It will focus on how the Township compares with competitor locations in the Philadelphia region in regards to these other factors that influence business and resident location decisions.

1.3

OVERVIEW OF REPORT STRUCTURE

The focus of this report is to compare the relative tax burden in the Township and eight competing jurisdictions, with a particular focus on the following selected industries: pharmaceutical and medicine manufacturing, investment advice, insurance agencies and brokerages, offices of lawyers, and research and development in the physical, engineering and life sciences. This report is organized as follows. In Section 2 of the report, we articulated the methodological approach for comparing jurisdictions’ tax burden. In Section 3, we analyzed each jurisdiction’s tax mix and tax rates. In Section 4, we applied the tax types and tax rates to the illustrative firms in the aforementioned industries, and developed rankings to show how the jurisdictions compare in terms of tax burden. Section 4 also provides some commentary on how things may change over time given current trends.

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2.0 METHODOLOGICAL APPROACH 2.1

COMPETING LOCATIONS

Creating conducive environments for a healthy mix of industries and jobs is crucial to the economic development and fiscal health of any jurisdiction. Jobs represent economic activity and the property tax base. Because today’s economy leans towards a mobile workforce, issues such as tax burden can strongly influence the relative competitiveness of one jurisdiction over another.

Therefore, it is useful to regularly consider the Township’s tax burden, relative to that of neighboring jurisdictions.

As noted in the previous section, in 2011, KOP-BID commissioned ESI to estimate the relative tax burden of the Township and eight nearby jurisdictions. One of the main findings of this analysis was that the Township fell in the middle of these comparison jurisdictions, with a higher overall tax burden than locations perceived as being low-tax, such as Tredyffrin and Newtown, and with a lower overall tax burden than such locations perceived as being high-amenity, such as Conshohocken and Radnor (see Table 2.1). To see what has changed since then, the same comparison locations and overall methodological approach was used for this report.

TABLE 2.1 – LIST OF MUNICIPALITIES IN ANALYSIS, SORTED BY 2011 RANK IN TAX BURDEN1 (1= LOWEST TAX BURDEN, 10 = HIGHEST TAX BURDEN) 2011 Rank 1 2

Location Tredyffrin Malvern

Local Jurisdiction Tredyffrin Township East Whiteland

County Chester Montgomery

School District Tredyffrin/Easttown Great Valley

3

Newtown Square

Newtown Township

Delaware

Marple Newtown

4 5

Exton Paoli

West Whiteland Township Chester Willistown Chester

6 7

Upper Merion Plymouth Meeting

Montgomery Montgomery

8

Conshohocken

Upper Merion Township Part of Plymouth and Whitemarsh Township Conshohocken Burough

West Chester Great Valley, Tredyffrin/Easttown Upper Merion Colonial

Montgomery

Colonial

9

Radnor

Radnor Township

Delaware

Radnor

1

See Appendix A for background demographic and revenue data by jurisdiction.

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FIGURE 2.1 – MAP OF THE MUNICIPALITIES IN 2011 AND 2017 ANALYSIS

Source: CensusReporter (2017), Mapbox (2017)

2.2

SELECTED INDUSTRIES

To better understand the implications of each jurisdiction’s tax policies on a business considering various locations within the region, a number of illustrative business archetypes were developed.

These represent industries of interest to the Township and common to the region (see Table 2.2).

The characteristics of these illustrative businesses are loosely based on national averages for these industries, but are modified to portray a range of archetypes that the Township and other jurisdictions may compete for from the standpoint of business formation, growth, retention, and attraction.2

2

“Almanac of Business and Industrial Financial Ratios,” Internal Revenue Service (2017).

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TABLE 2.2 – SELECTED INDUSTRIES FOR ANALYSIS, 2011 AND 2017 Industry

2.3

NAICS Code

Pharmaceutical and medicine manufacturing Investment advice

32541 52393

Insurance agencies and brokerages Offices of lawyers

52421 54111

Research and development in the physical, engineering, and life sciences

54171

DATA SOURCES, ASSUMPTIONS, AND LIMITATIONS

We collected most tax rate and budgetary information from the county, municipal and school districts’ published budgets. Where data was not available, we used Munistats, a state-run database that generates tax and financial reports. The database is comprehensive at the municipal and school district level.

To measure the impact of tax policies on businesses considering various locations within the region, five generalized business archetypes/categories were developed. The characteristics of the illustrative business archetypes shown in Table 2.2 can only be roughly estimated for purposes of a comparison; they do not represent actual firms, and in reality, tax bases and burdens will be more complicated to calculate.3 Nevertheless, even this simplified approach can enable a rough estimation of the tax bill for each illustrative business in each jurisdiction, and therefore a general sense of how the Township compares in terms of its tax burden, relative to that of competing locations.4

For example, this simplified approach does not make any allowance for policies and regulations that are used to ameliorate tax burden such as government incentives for business attraction and retention. It also does not take into account whether and how a firm is incorporated, which affects its tax burden.

4 See Appendix B for detailed information on business archetypes by industry.

3

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King of Prussia District | Comparative Tax Analysis | Report

3.0 COMPARING TAXES ACROSS JURISDICTIONS, 2011 AND 2017 3.1

TAX TYPES AND RATES

The taxing systems of local jurisdictions differ in many respects and reflect decisions by the jurisdictions on what should and should not be taxed. For example, some jurisdictions do not levy an earned income tax, although for many others it represents a major source of funding. The taxes studied in this analysis are as follows:  

  

Real estate tax: Levied on all property owners – residential, commercial, and industrial.

Earned income tax: Levied by municipalities and school districts. The earned income tax is a tax on gross wages and net profits of residents and/or nonresidents of a taxing jurisdiction.

Business privilege tax: Levied on the gross receipts of service businesses and the rental of property.

Mercantile tax: Levied on the gross receipts of retail dealers and vendors in goods, wares and merchandise, and restaurants.

Local services tax: Levied on all individuals who hold a job or profession in the jurisdiction.

When deciding where to locate within the Philadelphia region, businesses must also take into account the taxes imposed by their respective school districts and counties. They also impose real estate taxes and some school districts impose an earned income tax. Although these tax types and rates are not determined by the municipalities themselves, they represent part of the tax burden that businesses that locate within each jurisdiction have to bear. Importantly, different municipalities have different school districts and are located in different counties, and therefore the non-municipality portion of their tax burden differs. Therefore, we included the school district and county taxes in the tax burden calculations.

3.2

MUNICIPALITY AND SCHOOL DISTRICT TAX RATES

Municipalities and school districts in the Philadelphia region rely largely on property taxes, and in many cases, earned income taxes and/or gross receipts taxes (see Table 3.1). Four municipalities including the Township, have a business gross receipts tax at the rate of 0.15%, and Radnor has double the rate at 0.30%. This is unchanged from 2011. As of 2017, the Township does not levy an earned income tax for residents or non-residents, but six of the eight

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other jurisdictions do. This is also unchanged from 2011.5 The combined municipal and school district real estate tax rates all increased from 2011.

TABLE 3.1 – SELECTED TAX TYPES AND RATES FOR MUNICIPALITIES AND SCHOOL DISTRICTS IN THE TOWNSHIP AND COMPETING LOCATIONS, 2011 AND 2017 Resident Earned Income Real Estate (Combined Municipality (Combined Municipality Township and School District) and School District) Business - Gross Receipts 2011 Upper Merion Conshohocken East Whiteland Newtown Plymouth Radnor Tredyffrin West Whiteland Whitemarsh Willistown

-

1.94%

0.15%

1.00% 0.50% -

2.20% 1.95% 1.97% 2.01% 2.48% 2.08% 1.90% 2.05% 1.93%

0.15% 0.15% 0.30% 0.15% -

-

2.12%

0.15%

1.00% 0.50% -

2.49% 2.12% 2.10% 2.35% 2.75% 2.48% 2.14% 2.34% 2.11%

0.15% 0.15% 0.30% 0.15% -

1.00% 1.00% 1.25% 1.00% 2017

Upper Merion Conshohocken East Whiteland Newtown Plymouth Radnor Tredyffrin West Whiteland Whitemarsh Willistown

1.00% 1.00% 1.25% 1.00%

Source: Munistat (2011, 2017), Respective Municipal and School District Budgets (2017), PA Department of Revenue (2017)

5

See Appendix C for additional detail on tax types and tax rates by jurisdiction.

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3.3

COUNTY REAL ESTATE TAX RATES

Of the nine jurisdictions analyzed, four are located in Montgomery County, three in Chester County, and two in Delaware County. Delaware County has the highest overall property millage rate of the three counties at 5.604 and also had the highest millage rate of the counties in 2011 (see Table 3.2). Chester County has the second-highest millage rate at 4.369. Montgomery County maintains the lowest millage rate at 3.849. However, Montgomery County has seen the largest increase in its real estate tax since 2011, with a 43 percent increase. The increase is partially due to the creation of a tax category created to fund Montgomery Community College.6 Millage rates in Chester and Delaware County only increased modestly during the same period.

TABLE 3.2 – COUNTY REAL ESTATE TAX MILLAGE RATES AND EQUALIZATION RATIONS Tax Year Real Estate Tax Rate 2017 2011 2011 – 2017 Absolute Change 2011 – 2017 Percentage Change Equalization Ratio 2011 2017

Montgomery

Chester

Delaware

3.849 2.695 1.154 43%

4.369 3.965 0.404 10%

5.604 5.184 0.42 8%

1.72 1.85

1.79 1.89

1.48 1.64

Source: PA Munistat (2011, 2017), County Websites (2017), PA Department of Revenue (2017)

6

“Montgomery County Commissioners Approve 11-Percent Tax Increase in Party-Line Vote,” McCrone, Brian (2016).

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Municipal property taxes in the Township have not changed since 2011. However, the Township’s school district property tax rate has increased by more than ten percent. By comparison, Tredyffrin Township previously had a comparative advantage in tax burden due to its lack of gross receipts and earned income tax. However, this advantage became unsustainable in the long term unless the township initiated new taxes or raised existing taxes and fees.7 Since 2011, the municipal and school district property tax rates have increased by seven and 21 percent respectively. Similarly, Newtown, also a previously low tax burden municipality has seen its municipal and school district property tax rates increase by 18 and five percent, respectively.

TABLE 3.3 – PERCENT CHANGE IN TAX RATES BY MUNICIPALITY AND SCHOOL DISTRICT, COMPARING 2017 TAX YEAR TO THE 2011 TAX YEAR Township Upper Merion Conshohocken

Earned Income (Resident) No Change

Earned Income (Non-resident) No Change

Real Estate (Municipal) No Change No Change

Real Estate (School District) 10.30% 15.85%

Business - Gross Receipts No Change No Change

East Whiteland

No Change

No Change

No Change

9.30%

No Change

Newtown

-

-

17.59%

4.85%

-

Plymouth

No Change

No Change

31.25%

15.85%

No Change

Radnor

-

-

7.74%

11.71%

No Change

Tredyffrin

-

-

6.73%

20.63%

-

West Whiteland

No Change

No Change

19.83%

12.66%

-

Whitemarsh

No Change

No Change

No Change

15.85%

No Change

Willistown

No Change

No Change

No Change

9.30%

-

Source: PA Munistat (2011, 2017), Respective Municipal and School District Budgets (2011, 2017), PA Department of Revenue (2017)

7

“King of Prussia District Tax Policy Analysis,” Econsult Corporation (2012).

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4.0 INDUSTRY SPECIFIC RESULTS AND RANKINGS 4.1

TAX BURDEN RANKING APPROACH

The tax types and rates shown in Section 3 can be applied to the business archetypes described in Section 2 to estimate tax burden levels for the Township and competing jurisdictions. This was done for individual industries of interest, from which a ranking by industry could be made (see Section 4.2), and from which a composite ranking across industries could be determined (see Section 4.3). Note that since Plymouth Meeting is part of two municipalities (Plymouth and Whitemarsh Townships) with different tax types and rates, Plymouth and Whitemarsh Townships were ranked separately.

4.2

TAX BURDEN RANKING BY INDUSTRY

Table 4.1 shows rankings of tax burden by jurisdiction by industry. As these industries are fairly similar in terms of their taxable characteristics, there is not much deviation across industry when it comes to how jurisdictions fare against each other. That is to say, lower-tax jurisdictions tend to be so across all of the selected industries, and higher-tax jurisdictions tend to be so across all of the selected industries as well. The Township has, in most industries, the third lowest tax burden, with only Newtown and Tredyffrin being lower.

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TABLE 4.1 OVERALL RANKING OF TAX BURDEN OF ILLUSTRATIVE BUSINESS TYPES IN UPPER MERION TOWNSHIP AND COMPETING LOCATIONS, 2017 (1 = LOWEST BURDEN, 10 = HIGHEST BURDEN)8,9

Industry Pharmaceutical and medicine manufacturing Investment advice Insurance agencies and brokerages Offices of lawyers Research and development in the physical, engineering, and life sciences

Upper Merion Conshohocken

East Whiteland

Newtown

Plymouth

Radnor

Tredyffrin

West Whiteland Whitemarsh

Willistown

4

10

3

1

8

7

2

6

9

6

3

9

5

1

8

4

2

7

10

7

3

9

4

1

8

5

2

7

10

7

3

9

4

1

8

5

2

7

10

7

3

9

5

1

8

4

2

7

10

7

8

The “Total Tax Burden” does not include taxes paid to state governments (e.g., state income tax, state portion of sales tax).

9

See Appendix D for more detail on the tax estimates and rankings by industry in each jurisdiction

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4.3

COMPOSITE RANKINGS

Table 4.2 below shows the tax rankings for 2011 and 2017. Since 2011, the Township’s tax burden position has improved (a decrease in tax burden) relative to its peers, from 6th to 3rd behind Newtown and Tredyffrin.

TABLE 4.2 – AVERAGE RANK OF UPPER MERION TOWNSHIP AND COMPETING LOCATIONS BY TAX BURDEN FOR ILLUSTRATIVE BUSINESS TYPES (1 = LOWEST BURDEN, 10 = HIGHEST BURDEN)

4.4

Rank

Location (2011 Rank)

1 2 3 4 5 6 6 8 9 10

Newtown (3) Tredyffrin (1) Upper Merion (6) Malvern (2) Radnor (9) Exton (4) Paoli (5) Plymouth Township (7) Conshohocken (8) Whitemarsh (Plymouth Meeting) (7)

Average Rank 1.0 2.0 3.2 4.0 4.8 7.0 7.0 8.0 9.2 9.8

IMPLICATIONS FOR INTERPRETING AND PROJECTING RANKINGS

As compared to the rankings from 2011, we drew three main conclusions, all of which bode well for the Township. 

 

First, jurisdictions with a lower tax burden than the Upper Merion’s are struggling to maintain that competitive advantage. Some are choosing to raise taxes and thus shrink their tax burden advantage and others are choosing not to raise taxes, which may not be sustainable in the future.

Second, jurisdictions with a higher tax burden than the Township are facing pressure not to increase tax rates more, which may or may not be sustainable in the future.

Third, the Township’s broad base of commercial activity allows it to maintain a strong fiscal position while offering a relatively low tax burden to residents.

Since 2011, some lower jurisdictions’ tax burden has increased as fiscal pressure and funding concerns have led to higher than average property tax rate increases. Tredyffrin Township is an example of this, as unlike most other local jurisdictions in the Commonwealth, it does not levy an

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earned income tax. Although Tredyffrin contemplated an earned income tax in 2012, it still has not implemented one. This has left Tredyffrin and many municipalities like it with property taxes as its main funding operation.10 Since 2011, Tredyffrin Township has raised its property tax rate and it school district also raised its property tax by more than 20%, the largest increase among school districts studied (see Table 4.3). The adoption of property tax increases in Tredyffrin and its school district reflects the need to maintain funding for services at sustainable levels, but has had the result of shrinking its previous tax burden advantage. Newtown, in contrast, has not raised its rates as much, but that may or may not be sustainable in the future.

Conversely, higher tax jurisdictions, most notably Radnor, have risen in the rankings. Radnor, previously the jurisdiction with the highest tax burden, has modestly raised its property taxes by 10.6 percent since 2011 (see Table 4.3). This is likely in response to the pushback received by taxpayers who struggle with swallowing even higher property tax rates. However, some residents have expressed that smaller tax rate increases will cause declines in service quality, particularly in schools. So it remains to be seen if places like Radnor can continue to shrink their relative disadvantage in tax burden, or if they will be forced to raise tax rates and become less competitive in terms of tax burden.

10

“Why is T/E Considering a New Earned Income Tax?” Patch.com (2011).

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TABLE 4.3 - PROPERTY TAXES BY SELECT JURISDICTION, 2011 AND 201711 Township

Upper Merion

Radnor

Upper Merion

Newtown MarpleNewtown

Radnor

Tredyffrin TredyffrinEasttown

School District

Montgomery

Delaware

Delaware

Chester

County

0.27%

0.52%

0.52%

0.40%

Municipality School District

0.22% 1.72%

0.25% 1.72%

0.36% 2.11%

0.22% 1.86%

Total 2017 Total Real Estate Tax

2.20%

2.49%

3.00%

2.48%

County Municipality School District Total Changes in Real Estate Tax

0.38% 0.22% 1.90% 2.50%

0.56% 0.29% 1.81% 2.66%

0.56% 0.39% 2.36% 3.31%

0.44% 0.24% 2.24% 2.92%

County Municipality School District Total Real Estate Tax Change

42.82% 0.00% 10.30% 13.26%

8.10% 17.59% 4.85% 6.81%

8.10% 7.74% 11.71% 10.60%

10.19% 6.73% 20.63% 17.71%

County 2011 Total Real Estate Tax

Source: Munistat (2011, 2017), County, Municipal and School District Websites and Budgets (2011, 2017)

The Township’s overall tax burden, in relative terms, has improved from middle of the pack to closer to the top (less tax burden). Upper Merion has healthy and growing levels of taxable commercial activity which gives it a distinct and significant advantage in terms of a growing tax base and the ability to be competitive in terms of overall tax burden (see Table 4.4). Unlike neighboring jurisdictions, the Township has a strong business base from which it can levy its business and mercantile taxes and property tax. Hence, all-in property tax rates (county, municipal, and school district combined) were and still are lower than other jurisdictions (see Table 4.5). Because of the strong and growing commercial tax base in the Township, there is less pressure for future tax increases so it’s likely to maintain an advantage with a lower tax burden than neighboring tax jurisdictions (see Table 4.6).

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See Appendix E for a more detailed version of this table, including all jurisdictions analyzed in this report.

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TABLE 4.4 – SHARE OF TAX REVENUES BY CATEGORY, 2011 AND 201712 Category 2011 Income Property Real Estate Transfer Business/Mercantile Local Services Amusement 2017 Income Property Real Estate Transfer Business/Mercantile Local Services Amusement

Upper Merion

Radnor

Tredyffrin

Newtown

2011

2011

2011

2011

-

-

-

-

31.6% 4.0%

55.4% 10.5%

64.4% 20.9%

75.8% 14.3%

52.0% 12.2%

29.0% 4.9%

0.0% 14.5%

0.0% 9.8%

0.3%

0.2%

0.2%

0.0%

2017

2017

2017

2015

25.1% 7.8% 55.6% 10.8% 0.8%

46.8% 8.4% 40.9% 3.7% 0.1%

63.9% 22.1% 0.0% 13.9% 0.1%

74.9% 16.3% 0.0% 8.8% 0.0%

Source: Munistat (2011, 2017), Municipal Websites and Budgets (2011, 2017)

TABLE 4.5 – MUNICIPALITY + SCHOOL DISTRICT + COUNTY PROPERTY TAX RATE BY JURISDICTION, 2011 AND 2017 (SORTED FROM LOWEST TO HIGHEST) 2017 All-In Property All-In Property Ranking Jurisdiction Tax Rate 2011 Ranking Jurisdiction Tax Rate 1 2 3 4

Newtown Tredyffrin Upper Merion Malvern

2.66% 2.92% 2.46% 2.56%

3.6 1.2 5.2 2

Newtown Tredyffrin Upper Merion Malvern

2.49% 2.48% 2.20% 2.34%

5 6

Radnor Exton

3.31% 2.58%

8.6 4

Radnor Exton

3.00% 2.29%

6 8

Paoli Plymouth Township

2.54% 2.70%

5 -

Paoli Plymouth Township

2.33% 2.28%

9

Conshohocken Whitemarsh (Plymouth Meeting)

2.84%

8.2

2.47%

2.69%

7.2

Conshohocken Whitemarsh (Plymouth Meeting)

10

Source: Munistat (2011, 2017), County, Municipal and School District Websites and Budgets (2011, 2017)

12

See Appendix E for additional detail on municipal budgets.

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2.32%

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FIGURE 4.1 – SHARE OF REVENUES BY CATEGORY FOR UPPER MERION TOWNSHIP, 2011 AND 2017

Upper Merion

2011

2017 0.8%

0.3%

10.8%

12.2%

25.1%

31.6%

Real Estate Transfer 7.8%

52.0%

Property

Local Services Amusement

55.6%

4.0%

Business/Mercantile

Source: Munistat (2011, 2017), Municipal Budgets (2017, 2017)

FIGURE 4.2 – SHARE OF REVENUES BY CATEGORY FOR RADNOR TOWNSHIP, 2011 AND 2017

Radnor

2011

2017 3.7%

4.9% 0.2%

0.1%

Property 29.0%

46.8%

40.9% 55.4%

Real Estate Transfer Business/Mercantile Local Services Amusement

10.5% 8.4%

Source: Munistat (2011, 2017), Municipal Budgets (2017, 2017)

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FIGURE 4.3 – SHARE OF REVENUES BY CATEGORY FOR TREDYFFRIN TOWNSHIP, 2011 AND 2017

Tredyffrin

2011

2017 0.1%

0.2% 13.9%

14.5%

Property

Real Estate Transfer

22.1%

20.9%

Local Services 63.9%

64.4%

Amusement

Source: Munistat (2011, 2017), Municipal Budgets (2017, 2017)

FIGURE 4.4 – SHARE OF REVENUES BY CATEGORY FOR NEWTOWN TOWNSHIP, 2011 AND 2017

Newtown

2011

2017 8.8%

9.8% 16.3%

14.3%

Property Real Estate Transfer Local Services

75.8%

74.9%

Source: Munistat (2011, 2017), Municipal Budgets (2017, 2017)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

18

King of Prussia District | Comparative Tax Analysis | Report

TABLE 4.6 – 2011 AND 2017 GROWTH IN SELECTED TAX REVENUE CATEGORIES, UPPER MERION TOWNSHIP COMPARED TO SELECTED COMPARISON JURISDICTIONS13 Property Taxes

Upper Merion

Radnor

Tredyffrin

Newtown

11.50%

10.60%

17.71%

6.81%

$ Change (Municipal only) Earned Income Tax

$132,870 Upper Merion

$1,244,310 Radnor

$531,000 Tredyffrin

$1,273,950 Newtown

% Change $ Change Gross Receipts Tax

$0 Upper Merion

$0 Radnor

$0 Tredyffrin

$0 Newtown

0.00% $3,250,000

0.00% $5,019,790

$0

$0

% Change (All property taxes)

% Change $ Change

Source: Munistat (2017), County Websites (2017), PA Department of Revenue (2017)

13

See Appendix E for a more detailed version of this table, including all jurisdictions studied.

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

A- 1

King of Prussia District | Comparative Tax Analysis | Report

APPENDIX A: DEMOGRAPHICS OF EACH JURISDICTION A review of key demographic indicators reveals that, since 2011, the Township has seen its employment base increase (see Tables A.1 through A.3). Total employment has increased by more than 5 percent, compared to increases of 3 percent in Conshohocken, Malvern, and Plymouth Meeting. The population across the jurisdictions has remained relatively steady, with the exception of Malvern and Plymouth, which have seen increases of 10 and 15 percent respectively. Conshohocken witnessed the highest jump in education attainment, from 20 to 39 percent in 2017.

TABLE A.1 – DEMOGRAPHIC INFORMATION FOR EACH JURISDICTION, 2011

Locality Upper Merion Conshohocken Malvern Plymouth Meeting Radnor Tredyffrin Exton (CDP) Paoli (CDP)

Residential Population 27,322 8,012 3,072 6,072 31,107 29,650 4,758 5,557

Employment 92% 93% 93% 92% 92% 93% 92% 92%

Unemployment Rate 8% 7% 7% 8% 8% 7% 8% 8%

Poverty Rate 5% 8% 4% 4% 6% 2% 2% 4%

Bachelor’s Degree or Higher 32% 20% 35% 28% 34% 41% 40% 30%

Source: ESRI Business Analyst (2011)

TABLE A.2 – DEMOGRAPHIC INFORMATION FOR EACH JURISDICTION, 2017

Locality Upper Merion Conshohocken Malvern Plymouth Meeting Radnor Tredyffrin Exton (CDP) Paoli (CDP)

Residential Population 28,622 8,752 3,384 6,959 31,837 30,089 4,945 5,830

Employment 96% 95% 96% 95% 96% 97% 97% 97%

Unemployment Rate 4% 5% 4% 5% 4% 3% 4% 3%

Poverty Rate 6% 12% 10% 5% 7% 2% 6% 11%

Bachelor’s Degree or Higher 33% 39% 31% 30% 36% 41% 33% 31%

Source: ESRI Business Analyst (2017)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

A- 2

King of Prussia District | Comparative Tax Analysis | Report

TABLE A.3 – PERCENT DEMOGRAPHIC CHANGES BY JURISDICTION, 2011 AND 2017 Locality Upper Merion Conshohocken Malvern Plymouth Meeting Radnor Tredyffrin Exton (CDP) Paoli (CDP)

Residential Population 5% 9% 10% 15% 2% 1% 4% 5%

Employment 5% 3% 3% 3% 5% 4% 5% 5%

Unemployment Rate

Poverty Rate

Bachelor’s Degree or Higher

-57% -35% -39% -41% -57% -55% -56% -59%

31% 49% 144% 15% 16% 0% 241% 160%

4% 94% -11% 9% 7% 0% -17% 4%

Source: ESRI Business Analyst (2011 and 2017)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

A- 3

King of Prussia District | Comparative Tax Analysis | Report

APPENDIX B: DEVELOPMENT OF BUSINESS ARCHETYPES Using five generalized business categories, we created archetypal businesses representing industries of interest to the Township and in the region. We understand that all business types could have several different types/scale of business operations even in the same footprint dependent on specific use. This is an illustrative comparison. We used industry averages where available, and conservative estimates.

Table B.1 shows the estimated sales, direct expenditures, and IMPLAN multipliers for Montgomery County for each of the business types. We created a high-level model that estimates employment and employee compensation based on estimated sales. This gets us the relative magnitude of economic impacts per business types. IMPLAN is an industry standard input-output model that estimates the induced and indirect economic impacts from the direct expenditures in a particular industry and geography. The induced effects are the spending by the company’s employees on local purchases. The indirect effects are from vendors increasing production to meet more orders from the business of interest.

For example, for the category of research and development, we estimated annual sales of $8.2 million and used this to generate an employment estimate. As shown in Table B.1, the employment multiplier is the number of employees in the industry per million dollars of sales.

Therefore, with $8.2 million in direct sales, we multiply 8.2 times the employment multiplier to get the 24 total number of employees supported. Estimates for employee compensation were calculated in a similar way using the employee compensation multiplier.

TABLE B.1 - ESTIMATED SALES AND TOTAL ECONOMIC IMPACT IN TERMS OF EMPLOYMENT AND EMPLOYEE COMPENSATION FOR FIVE BUSINESS TYPES IN MONTGOMERY COUNTY, PENNSYLVANIA, 2017 Total Employee Total Total Compensation Employee Employment Multiplier Compensation 49 0.100 $930,000

Industry Pharmaceutical and medicine manufacturing Investment advice

Sales $92,818,000

Direct Impact $92,818,000

Total Employment Multiplier 0.530

$2,017,000

$2,017,000

7.847

16

0.608

$903,000

Insurance agencies and brokerages Offices of lawyers

$1,164,000

$1,164,000

5.102

6

0.346

$297,000

$1,551,000

$1,551,000

4.919

8

0.391

$8,668,000

Research and development in the physical, engineering, and life sciences

$8,278,000

$8,278,000

2.899

24

0.451

$1,494,000

Source: IMPLAN (2015), Econsult Solutions (2017)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

A-4

King of Prussia District | Comparative Tax Analysis | Report

APPENDIX C: TAX TYPES AND TAX RATES FOR THE TAXING JURISDICTIONS Tax rate and budgetary information was collected from Munistats, a state-run database that generates tax and financial reports.

Because the database can contain lacking or outdated information, data were also collected from various municipal, school district and county websites to supplement and corroborate Munistats data.

TABLE C.1 – SELECTED TAX TYPES, RATES AND EQUALIZATION RATIOS FOR JURISDICTIONS FOR UPPER MERION TOWNSHIP AND COMPETING LOCATIONS, 2017 Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery -

Montgomery 1.00%

Chester 0.50%

Montgomery 1.25%

-

0.50%

0.50%

-

0.50%

-

County Earned Income or Wage (Resident) Resident Earned Income (Municipal) Resident Earned Income (School District) Earned Income or Wage (Nonresident) Nonresident Earned Income (Municipal) Nonresident Earned Income (School District) Local Services Tax (LST) LST (Municipal) LST (School District)

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery 1.00%

Delaware -

Chester -

Chester 1.00%

Chester 1.00%

Delaware -

0.75%

0.50%

-

-

0.50%

1.00%

-

-

0.50%

0.50%

-

-

0.50%

-

-

1.00%

0.50%

1.00%

1.00%

-

-

1.00%

0.88%

-

-

1.00%

0.50%

1.00%

1.00%

-

-

1.00%

0.88%

-

-

-

-

-

-

-

-

-

-

-

$52

$52

$52

$52

$52

$52

$52

$52

$52

$52

$47

$52

$52

$52

$52

$52

$52

$52

$52

$52

$5

-

-

-

-

-

-

-

-

-

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-5

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery 10.00%

Montgomery 10.00%

Chester -

Montgomery 10.00%

Montgomery 10.00%

Delaware 10.00%

Chester 5.00%

Chester -

Chester -

Delaware -

5.00%

-

-

5.00%

5.00%

10.00%

-

-

-

-

5.00%

10.00%

-

5.00%

5.00%

-

5.00%

-

-

-

-

-

-

-

$100

$150

$200

-

-

-

-

-

-

-

$100

$150

$200

-

-

-

-

-

-

-

-

-

-

-

-

-

1.00%

1.00%

1.00%

1.00%

1.00%

1.50%

1.50%

1.00%

1.00%

1.00%

0.50%

0.50%

0.50%

0.50%

0.50%

1.00%

1.00%

0.50%

0.50%

0.50%

Realty Transfer (School District) Real Estate General Purpose

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

2.02%

2.44%

2.12%

2.28%

2.30%

2.69%

2.48%

2.13%

2.11%

2.09%

Real Estate General Purpose (Municipal) Real Estate General Purpose (School District) Real Estate Community Colleges Real Estate Community Colleges (Municipal) Real Estate Community Colleges (School District)

0.13%

0.30%

0.04%

0.14%

0.16%

0.38%

0.24%

0.06%

0.03%

0.29%

1.90%

2.14%

2.08%

2.14%

2.14%

2.31%

2.24%

2.07%

2.08%

1.81%

-

-

-

-

-

0.05%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.05%

-

-

-

-

County Amusement Amusement (Municipal) Amusement (School District) Mechanical Devices (dollars) Mechanical Devices (Municipal) Mechanical Devices (School District) Realty Transfer Realty Transfer (Municipal)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-6

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery -

Montgomery -

Chester -

Montgomery -

Montgomery -

Delaware 0.02%

Chester -

Chester -

Chester -

Delaware -

-

-

-

-

-

0.02%

-

-

-

-

0.01%

0.01%

-

0.02%

0.05%

-

-

-

-

-

0.01%

0.01%

-

0.02%

0.05%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.01%

-

0.01%

-

-

-

-

-

-

-

0.01%

-

0.01%

-

-

-

-

-

-

-

-

-

-

0.05%

0.01%

-

0.02%

-

-

-

-

-

-

Real Estate Library (Municipal) Real Estate Library (School Districts) Real Estate Street Lighting

0.05%

0.01%

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.03%

-

-

-

-

-

-

-

-

Real Estate Street Lighting (Municipal) Real Estate Street Lighting (School Districts)

-

0.03%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

County Real Estate Debt Service Real Estate Debt Service (Municipal) Real Estate Debt Service (School District) Real Estate Fire Equipment and Firehouses Real Estate Fire Equipment and Firehouses (Municipal) Real Estate Fire Equipment and Firehouses (School District) Real Estate Fire Hydrants Real Estate Fire Hydrants (Municipal) Real Estate Fire Hydrants (School Districts) Real Estate Library

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-7

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery 0.01%

Montgomery -

Chester -

Montgomery -

Real Estate Open Space (Municipal) Real Estate Open Space (School Districts) Real Estate Recreation

0.01%

-

-

-

-

0.01%

Real Estate Recreation (Municipal) Real Estate Recreation (School Districts) Real Estate Debt Payment Real Estate Debt Payment (Municipal) Real Estate Debt Payment (School District) Real Estate Municipal Building

County Real Estate Open Space

Real Estate Municipal Building (Municipal) Real Estate Municipal Building (School District) Business Wholesale Business Wholesale (Municipal) Business Wholesale (School District)

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery -

Delaware -

Chester -

Chester -

Chester -

Delaware -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

0.01%

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.05%

0.10%

-

0.10%

0.10%

0.30%

-

-

-

-

0.05%

0.10%

-

0.10%

0.10%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-8

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

County Business Retail

Montgomery 0.15%

Montgomery 0.15%

Chester -

Montgomery 0.15%

0.15%

0.15%

-

-

-

0.15%

Business Retail (Municipal) Business Retail (School District) Business Other Business Other (Municipal) Business Other (School District) County Millage Rate All Real Estate – Municipal, School District, and County Equalization Ratio

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery 0.15%

Delaware 0.30%

Chester -

Chester -

Chester -

Delaware -

0.15%

0.15%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

0.20%

-

0.15%

0.15%

0.30%

-

-

-

-

0.15%

0.20%

-

0.15%

0.15%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.38%

0.38%

0.44%

0.38%

0.38%

0.56%

0.44%

0.44%

0.44%

0.56%

2.50%

2.88%

2.56%

2.73%

2.74%

3.31%

2.92%

2.58%

2.54%

2.66%

54.05%

54.05%

52.91%

54.05%

54.05%

60.98%

52.91%

52.91%

52.91%

60.98%

Source: MuniStat (2017), Respective Municipal and School District Websites (2017)

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-9

King of Prussia District | Comparative Tax Analysis | Report

TABLE C.2 – SELECTED TAX TYPES, RATES AND EQUALIZATION RATIOS FOR UPPER MERION TOWNSHIP AND COMPETING LOCATIONS, 2011 Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery -

Montgomery 1.00%

Chester 0.50%

Montgomery 1.25%

-

0.50%

0.50%

-

0.50%

-

County Earned Income or Wage (Resident) Resident Earned Income (Municipal) Resident Earned Income (School District) Earned Income or Wage (Nonresident) Nonresident Earned Income (Municipal) Nonresident Earned Income (School District) Local Services Tax (LST) LST (Municipal) LST (School District) Amusement Amusement (Municipal) Amusement (School District) Mechanical Devices (dollars) Mechanical Devices (Municipal) Mechanical Devices (School District)

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery 1.00%

Delaware -

Chester -

Chester 1.00%

Chester 1.00%

Delaware -

0.75%

0.50%

-

-

0.50%

1.00%

-

-

0.50%

0.50%

-

-

0.50%

-

-

1.00%

0.50%

1.00%

1.00%

-

-

1.00%

0.88%

-

-

1.00%

0.50%

1.00%

1.00%

-

-

1.00%

0.88%

-

-

-

-

-

-

-

-

-

-

-

$52

$52

$52

$52

$52

$52

$52

$52

$52

$52

$47

$52

$52

$52

$52

$52

$52

$52

$52

$52

$5

-

-

-

-

-

-

-

-

-

10.00%

10.00%

-

10.00%

10.00%

10.00%

5.00%

-

-

-

5.00%

-

-

5.00%

5.00%

10.00%

-

-

-

-

5.00%

10.00%

-

5.00%

5.00%

-

5.00%

-

-

-

-

-

-

-

$100

$150

$200

-

-

$200

-

-

-

-

$100

$150

$200

-

-

$200

-

-

-

-

-

-

-

-

-

-

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-10

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

County Realty Transfer

Montgomery 1.00%

Montgomery 1.00%

Chester 1.00%

Montgomery 1.00%

0.50%

0.50%

0.50%

Realty Transfer (School District) Real Estate General Purpose

0.50%

0.50%

1.84%

Real Estate General Purpose (Municipal) Real Estate General Purpose (School District) Real Estate Community Colleges Real Estate Community Colleges (Municipal) Real Estate Community Colleges (School District) Real Estate Debt Service

Realty Transfer (Municipal)

Real Estate Debt Service (Municipal) Real Estate Debt Service (School District) Real Estate Fire Equipment and Firehouses Real Estate Fire Equipment and Firehouses (Municipal) Real Estate Fire Equipment and Firehouses (School District)

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery 1.00%

Delaware 1.50%

Chester 1.50%

Chester 1.00%

Chester 1.00%

Delaware 1.00%

0.50%

0.50%

1.00%

1.00%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

0.50%

2.20%

1.95%

1.99%

2.01%

2.43%

2.08%

1.85%

1.93%

1.97%

0.13%

0.35%

0.04%

0.14%

0.16%

0.36%

0.22%

0.01%

0.03%

0.25%

1.72%

1.85%

1.90%

1.85%

1.85%

2.07%

1.86%

1.84%

1.90%

1.72%

-

-

-

-

-

0.04%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.04%

-

-

-

-

-

-

-

-

-

-

-

0.04%

-

-

-

-

-

-

-

-

-

0.04%

-

-

-

-

-

-

-

-

-

-

-

-

0.01%

-

-

0.02%

-

-

-

-

-

0.01%

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Econsult Solutions | 1435 Walnut Street, 4th floor | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com

Willistown

A-11

King of Prussia District | Comparative Tax Analysis | Report

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery -

Montgomery -

Chester -

Montgomery -

-

-

-

-

-

0.05%

Real Estate Library (Municipal) Real Estate Library (School Districts) Real Estate Open Space Real Estate Open Space (Municipal) Real Estate Open Space (School District) Real Estate Recreation

County Real Estate Fire Hydrants Real Estate Fire Hydrants (Municipal) Real Estate Fire Hydrants (School Districts) Real Estate Library

Real Estate Recreation (Municipal) Real Estate Recreation (School District) Real Estate Municipal Building Real Estate Municipal Building (Municipal) Real Estate Municipal Building (School District)

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery -

Delaware -

Chester -

Chester 0.01%

Chester -

Delaware -

-

-

-

-

0.01%

-

-

-

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

0.05%

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.01%

-

-

-

-

-

-

-

-

-

0.01%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

0.02%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

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Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Montgomery 0.05%

Montgomery 0.10%

Chester -

Montgomery 0.10%

0.05%

0.10%

-

-

-

0.15%

County Business Wholesale Business Wholesale (Municipal) Business Wholesale (School District) Business Retail Business Retail (Municipal) Business Retail (School District) Business Other Business Other (Municipal) Business Other (School District) County Millage Rate All Real Estate – Municipal, School District, and County Equalization Ratio

Radnor

Tredyffrin TreyffrinEasttown

West Whiteland West Chester

Great Valley

Newtown MarpleNewtown

Montgomery 0.10%

Delaware 0.30%

Chester -

Chester -

Chester -

Delaware -

0.10%

0.10%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

0.15%

-

0.15%

0.15%

0.30%

-

-

-

-

0.15%

0.15%

-

0.15%

0.15%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.15%

0.20%

-

0.15%

0.15%

0.30%

-

-

-

-

0.15%

0.20%

-

0.15%

0.15%

0.30%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

0.27%

0.27%

0.40%

0.27%

0.27%

0.52%

0.40%

0.40%

0.40%

0.52%

2.20%

2.47%

2.34%

2.32%

2.28%

3.00%

2.48%

2.29%

2.33%

2.49%

58.14%

58.14%

55.87%

58.14%

58.14%

67.57%

55.87%

55.87%

55.87%

67.57%

Source: MuniStat (2011), Respective Municipal and School District Websites (2011)

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TABLE C.3 – COUNTY, MUNICIPAL, AND SCHOOL DISTRICT TAX RATE CHANGES, 2011 AND 2017 West Tredyffrin Whiteland TreyffrinEasttown West Chester

Township

Upper Merion

Conshohocken

East Whiteland

Whitemarsh

Plymouth

Radnor

School District

Upper Merion

Colonial

Great Valley

Colonial

Colonial

Radnor

County County Millage

Montgomery 42.82%

Montgomery 42.82%

Chester 10.19%

Montgomery 42.82%

Montgomery 42.82%

Delaware 8.10%

Chester 10.19%

0.00%

0.00%

0.00%

0.00%

31.25%

7.74%

10.30%

15.85%

9.30%

15.85%

15.85%

11.71%

Real Estate (Municipal) Real Estate (School District)

Great Valley

Newtown MarpleNewtown

Chester 10.19%

Chester 10.19%

Delaware 8.10%

6.73%

19.83%

0.00%

17.59%

20.63%

12.66%

9.30%

4.85%

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017)

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King of Prussia District | Comparative Tax Analysis | Report

APPENDIX D: ADDITIONAL DETAIL ON TAX BURDEN ACROSS JURISDICTIONS We created a high level model that estimates the total economic impacts for expenditures, employment and employee compensation based on the estimated sales. Next, we calculated the average tax revenues to each township, school district, and county from these typical businesses.

To estimate the tax bases of each business type we used the direct sales amounts from Table B.1, IMPLAN estimated direct employment and direct employee compensation, and data from BizStats.com on profits, employment and wages. We added the estimates per tax together to get the total taxes to each jurisdiction for business (see Tables D.1 to D.4).

TABLE D.1 - ESTIMATES OF DIRECT TAXES, BY TAX TYPE, FOR THE UPPER MERION TOWNSHIP TAXES FOR EACH BUSINESS ARCHETYPE AND THE SUM OF TAXES OWED PER $1,000 OF SALES, 2017

Industry Pharmaceutical and medicine manufacturing Investment advice

Local Services Amusement Tax Tax $2,310 $464,000

Business Tax $14,000

Sales per Property Square Tax Foot $273,000 $9,282,000

Upper Merion Total $753,310

Taxes Per $1,000 of Sales 81

$740

$74,000

$2,000

$17,000 $1,486,000

$93,740

63

Insurance agencies and brokerages Offices of lawyers

$280

$43,000

$1,000

$17,000

$61,280

71

$360 $1,108,000

$33,000

$428,000 $22,159,000 $1,569,360

71

Research and development in the physical, engineering, and life sciences

$1,130

$166,000

$5,000

$858,000

$60,000 $3,311,000

$232,130

Source: IMPLAN (2015), Econsult Solutions (2017)

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TABLE D.2 - ESTIMATES OF DIRECT TAXES, BY TAX TYPE, FOR THE UPPER MERION SCHOOL DISTRICT FOR EACH BUSINESS ARCHETYPE AND THE SUM OF TAXES OWED PER $1,000 OF SALES, 2017

Industry Pharmaceutical and medicine manufacturing Investment advice

Local Amusement Sales per Upper Merion Services Tax Tax Property Tax Square Foot SD Total $250 $464,000 $2,396,000 $9,282,000 $2,860,000 $80

$74,000

$148,000

$1,486,000

$222,000

149

$30

$43,000

$149,000

$858,000

$192,000

224

$40

$1,108,000

$3,762,000

$22,159,000

$4,870,000

220

$120

$166,000

$528,000

$3,311,000

$694,000

210

Insurance agencies and brokerages Offices of lawyers Research and development in the physical, engineering, and life sciences

Taxes Per $1,000 of Sales 308

Source: IMPLAN (2015), Econsult Solutions (2017)

TABLE D.3 - ESTIMATES OF DIRECT TAXES, BY TAX TYPE, FOR MONTGOMERY COUNTY TAXES GENERATED FOR EACH BUSINESS ARCHETYPE AND THE SUM OF TAXES OWED PER $1,000 OF SALES, 2017 Real Estate Tax $486,000

Sales per Square Foot $9,282,000

$30,000

$1,486,000

$30,000

20

$30,000

$858,000

$30,000

35

Offices of lawyers

$764,000

$22,159,000

$764,000

34

Research and development in the physical, engineering, and life sciences

$107,000

$3,311,000

$107,000

32

Industry Pharmaceutical and medicine manufacturing Investment advice Insurance agencies and brokerages

Montgomery Taxes Per $1,000 County Total of Sales $486,000 52

Source: IMPLAN (2015), Econsult Solutions (2017)

These calculations are meant as magnitude estimates and are not an exact accounting of taxes for each jurisdiction. It is instructive to compare tax burdens in one jurisdiction with the burdens in other jurisdictions because useful information can be gleaned from such a comparison. However, in evaluating or interpreting these comparisons, consideration should be given to special circumstances within each jurisdiction that may affect tax burdens. These burden comparisons reflect the assumptions used in their computation.

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TABLE D.4 – ESTIMATED OVERALL TAX BURDEN OF ILLUSTRATIVE BUSINESS TYPES IN UPPER MERION TOWNSHIP AND COMPETING LOCATIONS, 2017 Industry

Upper Merion

Pharmaceutical and medicine manufacturing Investment advice Insurance agencies and brokerages Offices of lawyers Research and development in the physical, engineering, and life sciences

Conshohocken East Whiteland

Whitemarsh

Plymouth

Radnor

Tredyffrin

West Whiteland

Willistown

Newtown

$164,755

$400,555

$135,091

$376,040

$352,858

$311,971

$29,080

$244,535

$230,575

$27,497

$12,104 $4,760

$38,883 $13,812

$19,110 $6,924

$40,456 $14,079

$37,412 $13,079

$17,895 $7,359

$10,749 $3,497

$28,706 $10,756

$27,406 $10,244

$9,681 $3,159

$14,542 $42,083

$29,244 $125,244

$18,235 $67,468

$29,293 $128,781

$27,806 $119,512

$20,844 $64,102

$14,235 $34,469

$24,001 $104,714

$23,136 $99,713

$13,094 $31,821

Source: IMPLAN (2015)

TABLE D.5 – ESTIMATED OVERALL RANKING OF TAX BURDEN OF ILLUSTRATIVE BUSINESS TYPES IN UPPER MERION TOWNSHIP AND COMPETING LOCATIONS, 2011 (1 = LOWEST BURDEN, 10 = HIGHEST BURDEN)14 Upper Plymouth Industry Merion Conshohocken Malvern Meeting Radnor Tredyffrin Exton Paoli Newtown Defense 4 9 3 8 7 1 5 6 2 Retail 6 8 1 7 9 2 4 4 5 Insurance 6 8 2 7 9 1 4 5 3 Financial services 4 8 2 7 9 1 5 6 3 Professional 6 8 2 7 9 1 3 4 3 services Source: Internal Revenue Service (2017)

14

The “Total Tax Burden” does not include taxes paid to state governments (e.g., state income tax, state portion of sales tax).

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APPENDIX E: ADDITIONAL DETAIL ON MUNICIPALITIES’ BUDGETS – 2011 AND 2017 TABLE E.1 – MUNICIPAL TAX REVENUES, 2011 AND 2017 East Whiteland Whitemarsh Plymouth Radnor

Upper Merion

Conshohocken

2011

2011

2011

2011

2011

$0

$2,650,000

$3,844,000

$6,789,000

$4,300,000

Property Real Estate Transfer Business/Mercantile Local Services Amusement Total

$5,166,000 $650,000 $8,500,000 $2,000,000 $45,000 $16,361,000

$1,867,000 $300,000 $2,025,000 $260,000 $0 $7,102,000

$627,000 $270,000 $0 $844,000 $0 $5,585,000

$3,335,000 $561,000 $5,249,000 $0 $0 $15,934,000

$2,608,000 $280,000 $4,875,000 $971,000 $20,000 $13,054,000

Year Income15 Property Real Estate Transfer Business/Mercantile Local Services Amusement Total

2017

2017

2017

2017

2017

$0 $5,298,874 $1,650,000 $11,750,000 $2,280,000 $165,000 $21,143,874

$3,800,000 $1,874,791 $328,509 $2,393,389 $255,000 $0 $8,651,689

$5,300,000 $640,000 $1,000,000 $0 $1,209,000 $0 $8,149,000

$7,375,000 $3,231,000 $700,000 $2,475,000 $660,000 $50,000 $14,491,000

$7,000,000 $2,663,000 $500,000 $6,707,400 $1,125,000 $15,000 $18,010,400

Year Income

Tredyffrin

West Whiteland

Willistown

Newtown

2011

2011

2011

2011

2011

$0

$0

$4,700,000

$5,038,078

$0

$11,258,000 $7,855,000 $2,133,000 $2,550,000 $5,900,000 $0 $1,000,000 $1,775,000 $35,000 $23,000 $20,326,000 $12,203,000

$1,018,000 $425,000 $0 $845,000 $0 $6,988,000

$347,000 $424,000 $0 $262,000 $0 $6,071,078

$3,440,000 $651,000 $0 $446,000 $0 $4,537,000

2017

2017

2017

2015

$0 $0 $12,502,305 $8,386,000 $2,250,000 $2,900,000 $10,919,788 $0 $983,000 $1,825,000 $37,000 $16,400 $26,692,093 $13,127,400

$6,000,000 $1,221,000 $685,000 $0 $885,000 $0 $8,791,000

$5,670,000 $345,000 $600,000 $0 $232,300 $0 $6,847,300

$0 $4,713,950 $1,028,826 $0 $554,573 $0 $6,297,349

2017

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017)

15

For Whitemarsh Township, this total includes the Open Space Earned Income Tax, which funds the acquisition of open space.

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TABLE E.2 – PERCENT CHANGE IN MUNICIPAL TAX REVENUE COLLECTIONS AND FORECASTS, 2011 AND 2017 Upper Merion Conshohocken East Whiteland Whitemarsh Plymouth Radnor Tredyffrin West Whiteland Willistown Newtown Income Property Real Estate Transfer Business/Mercantile Local Services Amusement

2.6%

43.4% 0.4%

37.9% 2.1%

8.6% -3.1%

62.8% 2.1%

6.8%

27.7% 19.9%

12.5% -0.6%

11.1%

37.0%

153.8% 38.2%

9.5% 18.2%

270.4%

24.8% -52.8%

78.6% 37.6%

5.5% 85.1%

13.7%

61.2%

41.5%

58.0%

14.0% 266.7%

-1.9%

43.2%

15.9% -25.0%

-1.7% 5.7%

2.8% -28.7%

4.7%

-11.3%

24.3%

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017)

TABLE E.3 – PROPORTION OF TAX REVENUES BY TAX TYPE, 2011 AND 2017 Category

Upper Merion Conshohocken East Whiteland Whitemarsh Plymouth Radnor Tredyffrin West Whiteland Willistown Newtown 2011

2011

2011

2011

2011

2011

2011

2011

2011

2011

31.6% 4.0% 52.0% 12.2%

37.3% 26.3% 4.2% 28.5% -

68.8% 11.2% 4.8% -

42.6% 20.9% 3.5% 32.9% -

32.9% 20.0% 2.1% 37.3% 7.4%

55.4% 10.5% 29.0% 4.9%

64.4% 20.9% 14.5%

67.3% 14.6% 6.1% 12.1%

83.0% 5.7% 7.0% 4.3%

75.8% 14.3% -

0.3%

0.0%

0.0%

0.0%

0.2%

0.2%

0.2%

-

-

0.0%

2017

2017

2017

2017

2017

2017

2017

2017

2017

2015

Income Property Real Estate Transfer

25.1% 7.8%

43.9% 21.7% 3.8%

65.0% 7.9% 12.3%

50.9% 22.3% 4.8%

38.9% 14.8% 2.8%

46.8% 8.4%

63.9% 22.1%

68.3% 13.9% 7.8%

82.8% 5.0% 8.8%

74.9% 16.3%

Business/Mercantile Local Services

55.6% 10.8% 0.8%

27.7% 2.9% -

14.8% -

17.1% 4.6% 0.3%

37.2% 6.2% 0.1%

40.9% 3.7% 0.1%

13.9% 0.1%

10.1% -

3.4% -

8.8% 0.0%

Income Property Real Estate Transfer Business/Mercantile Local Services Amusement

Amusement

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017)

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TABLE E.4 – PROPORTION OF MUNICIPAL BUDGETS SPEND ON FOUR MAJOR BUDGET CATEGORIES, 2017 Culture and Township Police Fire Recreation Libraries Upper Merion 45% 3% 10% 6% Conshohocken 45% 4% 5% 0% East Whiteland 33% 14% 1% 0% Whitemarsh 25% 4% 3% 3% Plymouth 32% 6% 2% 0% Radnor 26% 3% 1% 3% Tredyffrin 49% 6% 1% 6% West Whiteland 47% 5% 4% 0% Willistown Newtown

58% 38%

5% 4%

3% 1%

1% 2%

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017)

TABLE E.5 – MUNICIPAL BUDGETS SHOWN AS AMOUNT SPENT PER RESIDENT, 2011 AND 2017 2011 Population 27,322

Township Upper Merion

2011 2011 Expenditures Expenditures per ($M) Resident $33.50 $1,246

2017 Population 28,589

2017 2017 Expenditures Expenditures per ($M) Resident $35.99 $1,259

Conshohocken

8,012

$10.30

$1,357

7,890

$11.04

$1,399

East Whiteland

10,801

$8.60

$795

3,263

$14.41

$4,416

Newtown

12,216

$9.60

$790

12,389

$8.78

$708

Plymouth

6,072

$23.20

$1,445

1,837

$23.94

$13,034

Radnor

31,107

$26.90

$871

31,501

$34.22

$1,086

Tredyffrin

29,650

$22.70

$781

29,504

$19.26

$653

West Whiteland

4,758

$10.30

$624

4,772

$11.40

$2,390

Whitemarsh

6,072

$18.20

$1,089

17,562

$21.98

$1,252

Willistown

5,557

$9

$897

10,702

$8.25

$770

Source: MuniStat (2011, 2017), Respective Municipal and School District Websites (2011, 2017), U.S. Census (2011, 2017)

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TABLE E.6 – 2016 TOWNSHIP ASSESSMENT ESTIMATES BY LAND USE TYPE Township

Total Assessment Value Non-residential Residential

Upper Merion Conshohocken

$3,900,000,000 $630,000,000

62% 52%

38% 48%

East Whiteland Whitemarsh

$1,560,000,000 $1,990,000,000

59% 35%

41% 65%

Plymouth Radnor

$1,900,000,000 $5,900,000,000

57% 57%

43% 43%

Tredyffrin West Whiteland

$3,400,000,000 $1,700,000,000

33% 43%

67% 57%

Willistown Newtown

$1,300,000,000 $2,100,000,000

20% 38%

80% 62%

Source: Montgomery, Delaware, and Chester Property Assessments (2017)

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King of Prussia District | Comparative Tax Analysis | Report

APPENDIX F - ABOUT ECONSULT SOLUTIONS, INC Econsult Solutions, Inc. is a Philadelphia-based economic consulting firm. It provides businesses and public policy makers with economic consulting services in urban economics, real estate economics, transportation, public infrastructure, development, public policy and finance, community and neighborhood development, and planning, as well as expert witness services in support of litigation.

Its principals are nationally recognized experts in urban development, real estate, government and public policy, planning, transportation, non-profit management, and business strategy and administration, as well as litigation and commercial damages. Staff members have outstanding professional and academic credentials, including active positions at the university level, wide experience at the highest levels of the public policy process, and extensive consulting experience.

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