Officials of the city of Johnstown and Franklin Borough will be in court hearings later this month, hoping to convince a three-judge panel that they should be allowed to increase the earned income tax because of their distressed status.
Franklin officials will appear before the panel – made up of Judges Timothy Creany, Patrick Kiniry and Linda Fleming – at 1 p.m. Jan. 22.
The same panel will hear testimony from Johnstown officials at 1:30 p.m. Jan. 28, according to information from the office of Prothonotary Debbie Martella.
Both petitions are part of the Municipal Financial Recovery Act.
The petition filed by Solicitor David Andrews maintains that the city needs the additional $400,000 in projected revenue in order to continue to pay for basic services.
In approving the 2014 budget of $36.12 million two weeks ago, city officials said the money will go directly toward hiring two new police officers.
The increase also should allow for the hiring of a codes enforcement officer and addressing some pension obligations.
Requested as part of the recovery plan for 2014 is 1.50 percent of the earned income of residents and 1.10 percent of nonresidents
If approved, the increase will amount to hikes of one-half percent, or about $60 more per year for residents, and .10 percent for nonresidents.
“The plan recognized the fact that the city’s revenue limitations continue to strain its ability to pay for basic services, including infrastructure repairs, public safety and other vital services, and that the city is responsible for providing basic services to both residents and nonresidents who utilize the city’s infrastructure,” Andrews wrote in his petition.
He termed the proposed increase an essential element in the city’s 2014 budget.
In the petition filed on behalf of Franklin Borough, attorney Nicholas Banda is asking the court to again approve an increase in the earned income tax on borough residents to 1.40 percent and nonresidents working in the borough to 1.30 percent.
“The proposed increase in the earned income tax rate in the (recovery) plan for 2014 is the same as that which was imposed for 2013,” Banda wrote in his petition to the court.
The recovery plan recognizes that Franklin has had an operating deficit since 1992 and that successful real estate tax assessments appeals have resulted in more than a 37 percent loss of real estate tax revenue.
A 2014 borough budget of $142,219 is based on earned income tax revenues of $2,300 from residents and $13,000 from non residents, the petition states.
Kathy Mellott covers the Cambria County courthouse for The Tribune-Democrat. Follow her on Twitter at twitter.com/ kathymellotttd.