Harrisburg considers options as Act 47 deadline nears

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‘HARRISBURG, Pa. (WHTM) — Mayor Eric Papenfuse says the city may not be ready to exit the Act 47 recovery plan it entered into nearly five years ago.

Papenfuse says the city’s Act 47 coordinator indicated that Harrisburg is stronger now, but may not be strong enough to stand on its own.

The mayor says the program allows the city to increase its taxing authority, but if it opts out of Act 47, the earned income and local services taxes would drop and that would create a financial hardship for the city.

“We are not asking for a new taxing authority and we are not asking to raise taxes,” Papenfuse said. “We are asking to keep what we have because it is working.”

City Treasurer Dan Miller supports a three-year extension. He says there are financial consequences that the city may not be able to absorb by the end of the year.

“Once we get out of Act 47, our EIT (earned income tax) goes to one percent, which is about $10 million that we lose,” Miller said. “Our LST (local services tax), which is $156, will drop nearly two thirds, and that is several more millions in revenue that we will be without.”

Council President Wanda Williams says their goal is not to stay in Act 47 and continue to tax people.

“We want to make sure the city is prepared to stand on its own,” said Williams. “We don’t want to increase property taxes. All we want to do is become financially solvent.”

Williams says state officials will present recommendations to a judge at the end of March. The council will hold public meetings in April before making a final decision.

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