A legal battle over the ability of a state-appointed receiver to force Harrisburg to increase taxes played out Thursday in the Commonwealth Court of Pennsylvania.
Receiver William Lynch wants to force the City Council to increase the state capital's earned-income tax by 1%, to 2%. The council opposes such a tax.
Justice Bonnie Brigance Leadbetter has two weeks to rule.
The city's debt, estimated at about $320 million and rising, is largely tied to cost overruns at an incinerator retrofit project. One state official said earlier in the week that Harrisburg faces a $12.6 million budget gap for the year and could run out of money before Oct. 1, regardless of whether the court imposes the tax.
But Lynch, speaking during a midday break outside the Harrisburg courtroom, said the judge should nonetheless rule in his favor.
"If it's not implemented now, when would you do it, a year from now? If it's implemented now, we have some reasonable expectation of figuring out a stable financial future for the city. If it's not, it just puts off an inevitable issue," Lynch said.
The tax increase was part of a financial recovery plan that Lynch's predecessor, David Unkovic, filed with the court and Leadbetter approved. The City Council, however, has balked at the tax. A majority of its members call for a more regional solution, such as extracting more concessions from major incinerator creditors.
Unkovic resigned on March 30.
"I think the judge should implement her own order from back in March," Lynch said Thursday. "The numbers that we're using are the numbers that the judge approved back in March. We're not here to rewrite those numbers."
Council member Brad Koplinski said Harrisburg taxpayers should not shoulder the brunt of the recovery burden.
"We don't think that the people of Harrisburg played a role getting us into this fiscal crisis in the first place, so they shouldn't have to pay the tax to help get us out," he said.
Koplinski sees the case as a test of the state's powers over cities.
"How far will they go to make us increase taxes on the city of Harrisburg?" he asked. "Will they put us in contempt of court? Will they send us to jail? Will they remove us from our positions? I mean, how far will the commonwealth go?"
Neil Grover represented the council in court. Mark Kaufman led a McKenna Long & Aldridge LLP team representing Lynch.
Judge Leadbetter also considered a motion by Lynch to restore the $75,000 annual salary of Mayor Linda Thompson's communications director, Robert Philbin. He has been volunteering since the council cut his salary from the budget.
