Senate may vote in fall on Act 47 bill that would triple local services tax
HARRISBURG - Legislation before the state Senate that would update the Act 47 distressed cities recovery program, which Shamokin entered in June, allows tripling of the local services tax from $52 to $156 annually.
The bill would exempt someone earning less than $15,600 annually from paying any increase local services tax, said Sen. John Blake, D-22, Archbald, a member of a special task force that studied Act 47 changes on Monday. This exemption is so the tax wouldn't be regressive, he said.
"You don't want it to be punitive on lower income working individuals," said Blake.
Individuals earning less than $12,000 annually are exempt from paying the current $52 tax, which is paid by those working in a given municipality.
The tax generated $52,420 for Shamokin in 2013, and $27,428 in 2014 through Tuesday.
Making the higher local services tax option available to municipalities in the state's Act 47 program depends on whether the Legislature and governor will enact the bill into law during the relatively few session days scheduled for the rest of the year. If the bill doesn't make it through this year, it will have to be reintroduced in the next legislative session starting in January.
Bone of contention
The bill would help municipalities leave Act 47 status after eight years instead of staying there indefinitely. But the tax options given to help Act 47 municipalities exit successfully have been a bone of contention since the legislation was introduced in September.
Bill supporters decided to put off a Senate floor vote during the state budget finale so a Pittsburgh tax issue can be worked out during the summer, said sponsor Sen. John Eichelberger, R-30, Hollidaysburg. He said the bill can be voted by the Senate this fall or even before that should an opportunity arise.
Getting agreement on this bill is a balancing act that involves issues affecting different cites and the impact of tax options on residents and nonresidents, said Eichelberger.
The House and Senate have scheduled 11 session days between mid-September and mid-October when the effective bill-passing period ends. The House returns Aug. 4 to 6 to take up a Philadelphia school-related bill, and that could prompt a brief Senate return shortly after. The Pittsburgh negotiations could result in another amendment, which can be added to the bill relatively quickly, Blake said.
The measure would still need approval from the House and Gov. Tom Corbett to become law.