The Greater Scranton Chamber of Commerce is conducting an online survey of its membership to gauge reaction to the city's plan to revive a commuter tax.
"We want to take the pulse of their feelings on the commuter tax," chamber President Austin Burke said of the group's 2,000 members. "We're doing it so we can inform the city council about how businesses feel about the tax. Anecdotally, we've heard from some businesses that it (a commuter tax) will make it more difficult for them."
Such concerns include that a commuter tax could hamper recruiting if prospective employees seek to be reimbursed by the employee for the new tax; and that a commuter tax could become an annual recurring tax, Mr. Burke said.
The chamber survey asks two questions:
-âIs your business located in the city of Scranton?
-âHow do you feel about the city of Scranton's proposal to impose a commuter tax on nonresidents of Scranton who work in the city? (I oppose the proposal; I am neutral about the proposal; I am in favor of the proposal.)
The chamber asks members to reply to the survey by the end of business on Monday, Mr. Burke said. Results then would be compiled and sent in a letter to city council, which was expected to be in advance of second and third readings of the commuter-tax ordinance that are required to adopt it.
However, council on Thursday night introduced, seconded and adopted a 1 percent earned-income tax on nonresidents of Scranton who work in the city.
A commuter tax is one of the city's key alternatives to property tax hikes under its revised Act 47 recovery plan adopted Aug. 23.
The council ordinance would propose to increase the nonresident earned-income tax from the current 1 percent to 2 percent, while maintaining the earned-income tax of 2.4 percent on city residents, the public notice states.
A 1 percent commuter tax is expected to raise $2.5 million next year and $4 million in 2014 and 2015, city officials have said.
In a study done for the city's financial recovery coordinator, the Pennsylvania Economy League, and published in August 2010, the Institute for Public Policy & Economic Development at Wilkes University found 41,764 people worked in Scranton as of the 2000 census and 23,718, or 56.8 percent, lived outside the city. The study estimates the city could collect at least $4 million from the commuter tax.
The city last imposed a commuter tax in 1993-94, when a 0.6 percent tax was imposed. That tax was challenged in county court, where a panel of county judges who rejected the city's request to levy the tax cited city witnesses who blamed the need for the tax partly on "irresponsibility and mismanagement on the part of the (city's) political establishment." The judges said they had the right to apply "a judicial brake" to the city's taxing power if they found it unnecessary.
However, the city appealed and won in state Commonwealth Court, and opponents failed to convince the state Supreme Court to hear a further appeal. The commuter tax survived, but was discontinued by the city after 1994.
This time, Scranton would have to pass a more rigorous, three-pronged test to get court approval. This hurdle legislated in 1996 by former Rep. Frank Serafini requires the city to show it has "substantially implemented" other parts of a recovery plan, including: raising taxes and fees on city residents; taking steps to gain required approval from other groups such as courts, voters or unions; and showing that additional city tax revenue isn't enough to balance the city's budget.
Contact the writer: jlockwood@timesshamrock.com