One of the bills state lawmakers sent to Gov. Tom Corbett last week is meant to get Pennsylvania cities, boroughs, and towns out of financial rehab – but its supporters acknowledge it won’t address how municipalities got there.
Municipal rehab in Pennsylvania goes by the name Act 47, named after the 1987 law establishing a recovery program for severe financial problems. Entrants are often hollowed out, with a dwindling tax base and massive obligations.
Corbett is expected to approve the legislative changes to the program — deadlines meant to prod towns toward progress, early intervention, a promised first look for state grants.
But the root causes of urban distress — population decline, a concentration of tax-exempt properties and aging infrastructure — will remain.
Sen. John Eichelberger managed expectations for the proposed changes right before they passed a final vote on the state Senate floor.
“It’s not meant to be a fix for all the ills of government,” said Eichelberger, R-Blair. “It doesn’t address the problems that get them to Act 47.”
Sen. John Blake said that’s the next step, and something lawmakers should be thinking about for the next two-year legislative session beginning in January — how do you cure what ails cities?
“They need more investment. They need the opportunity to rebuild their tax base. They need more vitality,” said Blake, D-Lackawanna. “And we need to be a better partner in that.”
Greater taxing authority is also given to Act 47 municipalities under the approved legislation. All but one of the cities in the program would have the ability to triple their local services tax in lieu of raising their earned income tax.
Pittsburgh is exempt. The exclusion led some Senate Democrats to suspect House Republican lawmakers representing the city’s suburbs wanted to shield their constituents from higher taxes. The local services tax would be levied on residents as well as people who merely work in town.
“They just want to stick it to Pittsburgh, and it’s disappointing,” said Sen. Jay Costa, D-Allegheny.
But Republican supporters say Pittsburgh has already given up the specific taxing authority that the local services tax increase is meant to replace.
The Act 47 overhaul bill’s sponsor, Rep. Chris Ross, R-Chester, has said that the local services tax is intended to replace an earned income tax increase, something Pittsburgh “has already given up.”
Costa said Pittsburgh should not be punished for having relinquished taxing authorities.