Higher LST Tax Not Sitting Well With Some in Scranton

Higher LST Tax Not Sitting Well With Some in Scranton

In 2014, the General Assembly made changes to Act 47, the statute that outlines financial recovery for municipalities.  One of those changes was to allow distressed municipalities to seek a boost in the Local Services Tax (LST) a flat tax levied at a maximum of $52 on people who work in the municipality (regardless of residence).  We wrote about the proposal because Pittsburgh, an Act 47 municipality, was prohibited from pursuing the increase.

Scranton is in Act 47 and has levied the tax and planned on doing so again this year, but a lawsuit in Lackawanna County Court of Common Pleas against the increase (here and here).  One claim is that the distressed municipality is required to seek court approval prior to levying the tax, but the City did not do that for 2017.  According to the news articles the LST in Scranton applies to around 30,000 people and the boost in the rate has raised around $5 million.