Scranton officials return to court next month for permission to continue imposing a tripled, annual local services tax of $156 on most who work in the city.
The city filed a petition in Lackawanna County Court on Tuesday for the tripled local services tax, of the action published Wednesday in The Times-Tribune.
As expected, the petition seeks approval to maintain this year a local services tax of $156, or $104 higher than the city’s prior LST of $52 a year imposed before 2015.
A tripled LST — allowed under a 2014 revision to state Act 47 law under which Scranton has been labeled as financially distressed since 1992 — remains a plank of the city’s recovery plan but requires annual approval from court.
The city received court approvals for an LST of $156 for each of 2015, 2016 and 2017.
If the 2018 petition is approved, the tax would continue to be $3 a week, or $156 a year per worker. The Local Services Tax previously was $1 per week, or $52 a year per worker. Under law, LSTs above $52 a year contain exemptions for those earning less than $15,600 a year.
The city’s 2018 budget anticipates a tripled Local Services Tax of $156 to generate $4.8 million in revenue for the city.
The completion of various recovery measures, including monetizations of the parking and sewer systems, does not preclude the city from continuing to seek the tripled LST. The recovery plan anticipates the city levying an LST at $156 a year annually through 2020, the petition says.
“The Local Services Tax being levied at $156 represents a vital aspect of the plan as well as a key role in bringing about meaningful change to Scranton’s economic status,” the petition says.
While the city’s LST petitions for 2015-16 had no opposition, the 2017 petition was opposed by eight residents and their attorney, John McGovern. They contended the city violates a cap on a certain group of taxes allowed under state Act 511, including the wage tax, business privilege/mercantile taxes and the Local Services Tax, among others.
However, visiting Senior Judge John Braxton of Philadelphia dismissed the opposition as misplaced when he approved the city’s 2017 LST petition in February. His order noted the objectors could pursue a different legal avenue. They did just that, by filing a lawsuit in March against the city claiming it violates the Act 511 tax cap. That lawsuit remains pending.
McGovern said Wednesday that he expects the city’s 2018 LST petition to generate opposition. He thinks objectors now would hold a stronger hand, because the tax cap lawsuit survived with some preliminary, favorable rulings that did not dismiss the case, as the city wanted.
“Here we go again,” McGovern said. “The difference, is we do have those rulings, which changes this a little bit.”
Contact the writer: jlockwood@timesshamrock.com; 570-348-9100 x5185; @jlockwoodTT on Twitter
What’s next?
Scranton seeks permission from Lackawanna County Court to continue imposing a tripled local services tax of $156 a year, up from the typical LST of $52 a year, on anyone who works in the city and earns above a certain low-income threshold.
Anyone wishing to file a response to the city’s LST petition must do so by 4 p.m. Feb. 6, at the clerk of judicial records office, civil division, North Washington Avenue and Spruce Street.
A copy also must be served by the deadline at the city’s Law Department at City Hall at 340 N. Washington Ave.
The court scheduled a hearing on the city petition for 9:30 a.m., Feb. 13 in Courtroom 2C at the Lackawanna County Administration Building, 200 Adams Ave. in downtown Scranton.