Franklin Borough and the city of Johnstown made their annual petitions to increase their respective earned income tax rates – the so-called commuter tax – on Tuesday.
A three-judge panel, consisting of Patrick Kiniry, David Tulowitzki and Timothy Creany, immediately approved Franklin’s request following a brief hearing at the Cambria County Courthouse.
The judges likely will issue a ruling in Johnstown’s case within the next few days.
The city’s request for an increase has never been rejected.
“Typically, in the past, they waited to issue the decision,” said Johnstown Solicitor Dave Andrews. “It’s been a week or so. We’ve not received a decision, ever since I’ve been up here, on the spot.”
All Pennsylvania cities, boroughs and townships are allowed to levy a 1 percent earned income tax. Johnstown and Franklin can petition the court system for a higher rate because of their participation in the state’s Financial Recovery Act 47 program for distressed municipalities.
Johnstown entered the program in 1992. Franklin joined in 1988 and started petitioning for the tax increases in 1997.
This year, Franklin received the right to increase its rate to 1.4 percent for nonresidents, with 1 percent going to workers’ home municipalities and four-tenths to Franklin. The rate for residents will be 1.3 percent.
The percentages are the same as they were in 2012.
“(The judges) are all aware of the financial condition of Franklin Borough and the struggles that we’ve gone through to get out of this distressed status,” said Franklin’s solicitor, Nicholas Banda.
The increases are expected to help Franklin raise an additional $15,000 in revenue throughout 2013.
“That’s what keeps us afloat,” said Banda.
Johnstown will retain its residential EIT at 1 percent.
“We have not raised it on the residents,” said Andrews. “The city does not want to tax its residents any more than absolutely necessary.”
The city wants to increase its rate on nonresidents from 1 percent to 1.1 percent, which would put an extra $450,000 into its coffers this year. “It’s extremely important because without that, we don’t balance the budget and we don’t have a lot of options,” Andrews said.
Without the increase, Johnstown would see a shortfall in its projected $31.4 million total budget.
“Right now, as we sit here looking at the 2013 budget, I see no other alternative (than asking for the increase),” said Jim Roberts, Johnstown’s Act 47 coordinator.
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