Harrisburg residents should pack city hall to make their voices heard on Tuesday night during a public hearing on the city’s Act 47 exit plan, the mayor said today.
Mayor Eric Papenfuse implored city residents, as well as people from surrounding municipalities, to speak out on the draft plan proposed by the state Department of Community and Economic Development (DCED).
In particular, Papenfuse urged people to oppose the state’s proposal to more than double the city’s property tax over the next three years, making up for proposed reductions in the earned income tax (EIT) and local services tax (LST).
“The city cannot withstand, the tax base can’t withstand, that high of a [property tax] increase,” he said. “One-hundred percent would be devastating.”
Act 47, the state’s program for financially distressed municipalities, enabled Harrisburg to double its EIT in 2012 and triple its LST in 2016. The increases now total nearly $12 million a year in tax revenue, making up about 17 percent of the city’s annual general fund.
Harrisburg’s current Act 47 plan expires soon and, with it, its ability to maintain those tax rates. A proposed, three-year exit plan would return those rates to pre-Act 47 levels. However, to make up for the lost revenue, the city may need to raise its property tax by 105 percent over the next three years, according to the state’s draft exit plan.
According to Papenfuse, the property tax increase would drive out residents who are already dealing with a hike in school property taxes, as well as high waste, water and parking rates.
“It would be a huge mistake to substitute $2 a week [in LST] from people who can afford it for a 100-percent property tax increase,” he said. “And that’s sort of what we’re talking about right now.”
With all parties opposed—the administration, City Council and residents—Papenfuse said he doesn’t see how the proposed plan could be adopted.
“Perhaps that is an argument for coming out and speaking and seeing if the plan can be amended in such a way that it would provide the support of City Council,” he said.
Papenfuse listed two routes that Harrisburg could take to get back on its feet while exiting Act 47. First, the state’s exit plan could be changed based on input from the city and residents. Secondly, and more likely, the state legislature could take action, allowing Harrisburg to retain its elevated LST and EIT rates, thus eliminating the need to raise property taxes.
“Ultimately, it requires legislative action, and we’re not going to know what [state legislators] are going to do until September,” Papenfuse said. “What I’m recommending for now is the public certainly make their voices heard and and get on the record and come out and talk about the plan.”
The Act 47 exit plan hearing is slated for Tuesday, July 24, in City Council chambers, 10 N. 2nd St Harrisburg, starting at 5:30 p.m. To view the Act 47 plan, visit harrisburgpa.gov/act47.
