EBENSBURG —
Officials from Johnstown and Franklin Borough will be in Cambria County court on Jan. 20 for back-to-back hearings on requests by the two financially distressed municipalities to once again enact a commuter tax.
Judges Timothy Creany, David Tulowitzki and Patrick Kiniry are scheduled to hear the requests.
The city’s is first at 1:30 p.m., followed by Franklin’s at 2.
The judges’ review of the tax petitions is limited to whether the financially distressed municipalities have shown the need for the continued tax.
Although dubbed the “commuter tax,” the special tax on earned income – available only to financially distressed municipalities in Pennsylvania – is paid by both commuters and residents of the two communities.
Both the city and Franklin are proposing to levy the tax at the same rates as this year.
Solicitors for both municipalities said that revenues from the tax are necessary to help pay for essential services.
Johnstown is seeking to keep the tax in 2011 at 0.10 percent on the earned income of nonresidents and 0.30 percent for residents.
A commuter earning $30,000 annually would pay $30 to the city, while a Johnstown resident with the same salary would pay $90 under the levies.
Franklin’s rate is 0.30 percent on nonresidents, and 0.40 percent on residents’ earned income.
The tax for a nonresident at the $30,000 level would be $90, and for residents, $120.
David Andrews, city solicitor, said that the tax is expected to produce $1 million in revenues – $500,000 from residents and $500,000 from nonresidents for Johnstown.
The city’s $29.5 million budget is scheduled for final adoption today by City Council.
Andrews said in Johnstown’s petition that the city is showing a deficit of about $400,000 this year. Council, in an attempt to reduce costs, has laid off four police officers, two parking employees, one tax office employee and five public works employees and also eliminated the assistant manager and recreation director positions, he said.
The city solicitor said that the city’s amended recovery plan – which has been approved by state officials
– recommend that the tax be continued not only for 2011 but also the following two years.
But the city would have to return to court each year for approval to continue the levy.
Nicholas Banda, Franklin’s solicitor, said the tax is expected to produce $15,300 in revenues – $13,000 from nonresidents and $2,300 from residents.
The revenue is needed to balance the borough’s proposed budget of $142,173 for 2011, Banda said.
The borough, which had been hit a decline in real estate revenues over the years, has experienced an operating deficit since 1992, Banda said.
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Johnstown, Franklin to argue for commuter taxes
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