Local service tax would triple under Harrisburg budget proposal

HARRISBURG, Pa. (WHTM) – Harrisburg plans to triple its local services tax on people who work in the city.

Mayor Eric Papenfuse said the proposal will be presented to City Council at its meeting Tuesday night.

Early in 2015, many inside the Papenfuse administration discovered a major dilemma: a $6 million budget gap.

Following the State of the City address a few months ago, Papenfuse said the Harrisburg Strong Plan was overzealous in its revenue projections, mostly tied to parking revenues. He said this, as a result, left a multi-million dollar budget deficit and another challenge to cover the hole without raising earned income taxes.

Papenfuse said then and confirmed on Monday that he plans to ask Council to approve tripling the local services tax from $52 a year to $156 a year. Currently, anyone who works in the city and makes more than $12,000 a year pays $1 a week.

“It seemed like a fair way of raising the additional revenues that were needed in order to make up the sort of deficit that the Strong Plan gave us,” Papenfuse said.

The low-income exemption of anyone earning less than $12,000 a year would have the tax capped at $10 a year.

Papenfuse said the budget proposal also includes additional positions within the sanitation department to improve service, which he hopes residents would see as an offset to the tax increase. The mayor will present the budget to the council Tuesday at 6 p.m.

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