10.23.12

UPDATED: Harrisburg City Council Passes An Increase in the Earned Income Tax

This article has been updated since its earlier version. It now includes an explanation of the EIT Joint Stipulation Resolution passed by City Council.

In a 5-2 vote by Harrisburg City Council, the ordinance to increase the Earned Income Tax (EIT) on City of Harrisburg’s citizens passed, and with that action, the process immediately begins. Notices will go out to employers in the City  and the move towards increase begins without delay.

The tax increase, imposed only on those who are employed and live in the City of Harrisburg, goes from 1% to 2%. As a stipulation the increase will only be in place for one year and any revenues collected from the increase will go to health, safety, and welfare of the City’s residents.

Those conditions are one aspects of a “deal” that various City Councilors referred as did City Councilor’s attorney Neil Grover, who stated, “The deal made, strikes a balance.” However, several times, Councilors alluded to the fact that they could not disclose the exact details of the certainties arrived at after multiple sessions with the Office of the Receiver.

That being said though, along with the ordinance increasing the EIT, City Council also passed a resolution outlining the “Stipulation of the Parties.” This agreement is the result of negotiations among City Council, the Office of the Receiver, and the Office of the Mayor. It lays out “common ground.” Aside from the conditions that the EIT increase will only be in place for one year and that revenues will go to City services (and not debt service), the agreement also states that the Mandamus action against City Council ends and that City Council will not appeal the decision.

Additionally, all parties agree there will be no real estate increase in the 2013 Budget.

The stipulation declares that moving forward, City Council, the Office of the Receiver, and the Office of the Mayor will “further agree to cooperate in efforts to meet and confer on issues arising under the current recovery plan, any proposed or approved modified recovery plan, or other issues that may arise regarding the provision of vital and necessary services to the City of Harrisburg.”

This Stipulation Agreement will be filed with the Commonwealth Court.

City Councilors Brad Koplinski and Susan Brown Wilson opposed the increase and voted no.

Read: Joint Stipulation Agreement