Back in September of 2014 we wrote a Brief about a proposed overhaul of the Act 47 statute to allow distressed municipalities to raise the Local Services Tax (LST). Doing so would lead to a forfeiting of increases to the earned income tax. The proposal did not extend the option to the City of Pittsburgh, which has been in distressed status since 2004, but for just as long has been prohibited from seeking a boost in its earned income tax. The proposal became law near the end of September of last year.
The state’s only city of the Second Class A, Scranton, was included in the group that was permitted the LST option, and it has just gone to court to seek an increase in the levy, raising it from $52 to $156 on everyone who works in Scranton, resident and non-resident. The plan was announced in its November budget proposal for the current fiscal year.
Of course, the City of Scranton would probably have to take much or all of the proposed boost in revenue and put it towards its pensions, which are about 23% funded, a lower ratio than even Pittsburgh’s prior to the 2010 parking plan.
