A three-judge panel described Johnstown’s so-called commuter tax as “an unfortunate need” when granting the city permission to levy it again in 2013.
Cambria County Judges Patrick Kiniry, David Tulowitzki and Timothy Creany gave the approval earlier this week. Because of the ruling, Johnstown can impose a 1.1 percent earned income tax rate on nonresidents, as opposed to the usual 1 percent allowed by law without a special exemption.
The one-tenth percent increase is expected to help the city generate an extra $450,000 in revenue this year.
Residents will be taxed at 1 percent.
The city can petition the court for the increase because it participates in the state’s Financial Recovery Act 47 program for distressed municipalities.
Johnstown has been granted permission to tax above the 1 percent limit each time it has made its annual appeal.
“City officials are once again urged to increase their efforts to strengthen community and economic development, and to examine means by which they can bring a long-term solution to the city’s financial issues and become independent of Act 47,” Creany, the county’s president judge, wrote in the ruling.
The money will help the city balance its projected $31.4 million total budget.
“We appreciate the judges and appreciate this ruling because it’s essential to the city,” Johnstown Solicitor Dave Andrews said.
City Council already has approved using the 1.1 percent rate, pending court approval.
Franklin Borough, which is also a distressed municipality under Act 47, was granted its petition to tax nonresidents at 1.4 percent and residents at
1.3 percent on Jan. 28.
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