The Pennsylvania Municipal League and Pennsylvania Economy League have published a new study that demonstrates how the current local taxation structure developed in 1965 does not meet today’s municipal revenue needs. Pennsylvania’s municipal tax authorizations have failed to keep pace with modern realities, and municipalities need more flexible revenue options just to keep the lights on.
Much has changed in the landscape of local government since 1965 – population shifts, aging housing stock in older core communities, increased cost of municipal services, increases in tax-exempt properties receiving services. Currently, new tools are only available to communities that have become fiscally distressed. Municipalities need access to these proven tools before fiscal distress sets in.
Tools should be optional to allow each community to decide the best mix based on the make-up of the community such as: eliminating or raising the rate caps on the Earned Income Tax; perform regular property tax assessments; allow flat taxes, such as the Local Services Tax, to grow with inflation; and offer local/regional revenue options to all municipalities – such as a county sales tax, drink tax, payroll tax or non-resident tax.
Case studies for this report include: Cities of Altoona, Bradford, Hermitage, Lancaster, Lock Haven, Pittston; Upper Chichester Township and Indiana Borough.