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January 31, 2014

Judges approve city tax

EBENSBURG — A panel of Cambria County judges has unanimously approved a request by  Johnstown to again impose the earned-income tax on nonresidents working in the city this year.

The tax, commonly referred to as the “commuter tax,” places a levy of 1.10 percent on people driving into the city for work. The tax is needed, city officials say, to continue to provide basic services of fire, police and highways.

The order signed by President Judge Timothy Creany, Judge David Tulowitzki and Senior Judge F. Joseph Leahey cites testimony presented by city officials earlier this week calling the tax “absolutely critical to balance its budget.”

The order quoted James Roberts, Act 49 recovery coordinator for the city, who told the panel Wednesday that without the tax, which generates $450,000 annually, services will be significantly impacted.

“He opined that the city has done its best to control the budget and has substantially reduced payroll employees over a 20-year period,”  Creany wrote.

Roberts told the judges that the city has lost 65 percent to 70 percent of its population and most of its industry since the 1960s.

A reasonable alternative to the city’s making deeper personnel and service cuts is the tax, which costs the average nonresident about $50 a year, Roberts said.

City finance director Carlos Gunby said the city  has cut staff by 15 positions over the past few years and Johnstown continues to battle a loss in assessed valuation impacting the tax base.

City officials said that employee wages, health care and other benefits account for 75 percent of the city’s general fund budget.

“This court finds due cause for the petitioned increase and will approve the continuation of this tax for a period of one year,” the order stated.

Officials of Franklin Borough were in court asking for similar approval to tax nonresidents. As of Friday, an order had not been filed in the prothonotary’s office.

Kathy Mellott covers the Cambria County Courthouse for The Tribune-Democrat. Follow her on Twitter at twitter.com/ kathymellotttd.

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