An overwhelming majority of members of the Greater Scranton Chamber of Commerce who responded to a survey oppose the city's plan to impose a 1 percent commuter tax.
In an online survey of 1,650 business members over several days during the past week, nearly half - or 713 -members, responded. The survey's questions and responses were as follows:
n Is your business located in the city of Scranton?
-Yes: 66.6 percent; 473 respondents
-No: 33.4 percent; 237 respondents
n How 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: 84 percent; 599 respondents
-I am neutral about the proposal: 7.9 percent; 56 respondents
-I am in favor of the proposal: 8.1 percent; 58 respondents
All respondents answered the latter question, while three skipped the first question.
As a result of the survey, the chamber's board of directors has adopted a position of urging Mayor Chris Doherty and City Council to abandon their plan to revive a commuter tax, said chamber President Austin Burke.
A response from 713 members to the commuter-tax survey was "unprecedented," because typically the chamber receives around 100 responses to the half-dozen surveys it conducts per year, Mr. Burke said.
The commuter-tax issue apparently has struck a nerve with a business community concerned on several fronts, Mr. Burke said. Those include that a commuter tax: would make it more difficult for businesses to compete, thrive and survive; could hamper recruiting if prospective employees seek to be reimbursed by the employee for the new tax; would become an annual recurring tax; and could drive businesses out of the city, which would result in an overall lowering of tax revenue.
In a letter issued today to the mayor and council, Mr. Burke wrote: "Scranton business members of the chamber believe the imposition of the commuter tax will make it more difficult to recruit employees and more expensive to keep them. This impediment would add to the other hurdles to doing business which are unique to operating in Scranton - business privilege, mercantile and parking taxes primary among them.
"These hurdles will hurt Scranton businesses, which must compete with businesses in the surrounding communities. The inability to compete from a Scranton location will impede recruitment of new employers to Scranton, impede expansion of existing Scranton operations and may actually drive businesses and their employees out of the city.
"This, in turn, will adversely affect Scranton's commercial core, the Scranton retailers, restaurants and service firms for which our commuters are daily customers. The ultimate effect will be the reduction of the City's tax base and future revenue streams. For these reasons, the board of directors of the Greater Scranton Chamber of Commerce urges you not to impose an additional earned income tax on commuters."
Noting that many constraints hampering the city stem from state laws, Mr. Burke also informed the mayor and council that the chamber has joined a coalition of chambers across the state to advocate for reforms.
The city needs approval from Lackawanna County Court to impose a commuter tax. Council on Thursday - acting on an emergency basis - introduced, seconded and adopted a 1 percent earned-income tax on nonresidents of Scranton who work in the city. This legislation allows the city to petition the court for approval.
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 proposes 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.
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.
Council President Janet Evans said during Thursday's council meeting that the tax would be in place only for the next three years.
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 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