In life, there are certain convenient lies we tell ourselves.
Frozen yogurt is good for me.
I can afford to put this new suit/dress/iPad on my credit card.
Harrisburg’s earned income tax hike will last only a year.
Last year, a reluctant City Council agreed to raise the EIT from 1 to 2 percent, but only after receiver William Lynch assured members that the increase would be just for a year. He also said it was a necessary step to show creditors that Harrisburg would make serious sacrifices to try to resolve its financial crisis — and that he now expected sacrifices from them.
A majority bought his pitch.
“If we do the EIT tax, it will only be for a year,” stated Council President Wanda Williams in explaining her “yes” vote.
Fast forward to today: Lynch now is asking for a four-year extension of that one-year tax hike, until 2017. Council is slated to introduce the ordinance at its meeting tomorrow.
In October 2012, when council voted to double the EIT, two members remained firm against the increase. Brad Koplinski and Susan Brown-Wilson both warned that believing in a one-year hike was self-delusional — that, once passed, the new rate would be here to stay. Brown-Wilson specifically warned that the state would return asking for more sacrifices this year.
“They’ll be back again and again and again,” she said at the time.
So, should we trust, this time, that the EIT hike actually will expire in 2017? I wouldn’t. The receiver’s team is looking out until 2017 only because that’s when its recovery plan is expected to be fully implemented.
However, lurking just out of sight of that plan, several other Reed-era debt bombs are set to go off in the 2016-17 timeframe, including an anticipated surge in medical benefits for retirees from city government (Reed granted lifetime medical benefits to many union employees — and their families) and the terrible consequences of a horrible loan financing on the Verizon tower in Strawberry Square.
During last year’s debate, Brown-Wilson said city residents had already made major sacrifices. She added she’d be more willing to vote for an EIT increase if she saw willingness by the city’s creditors to share some of the pain.
At tomorrow’s meeting, council will begin to consider other elements of Lynch’s financial recovery solution. It will introduce a resolution to sell the debt-ridden incinerator to the Lancaster County Solid Waste Management Authority and two others to modify labor agreements with the police and non-uniformed employees unions.
So, scoring the sacrifices: residents have made many, with multiple property tax, income tax and fee hikes. Two of the city’s three labor unions are now making concessions, as well (only the firefighter’s union has resisted so far).
That leaves the city’s creditors, who were complicit in burying the city under a mountain of debt. How many sacrifices will other people have to make before they’re impressed enough to begin to consider some of their own?
