Judge Voids Scranton, Pa., Commuter Tax

A judge has struck down the commuter tax for nonresidents in Scranton, Pa.

Visiting Judge John Braxton ruled Tuesday afternoon in the Lackawanna County Court, one day before the 77,000-population city was to enforce the tax.

"It is clear to this court that there is no authority for the city to impose an earned income tax under Act 205 exclusively on nonresidents," Braxton said in a written ruling obtained by the local Times-Tribune newspaper.

The city was looking to plug a worsening pension gap with the Act 205 commuter tax, which would have been a 0.75% earned-income tax on people who work in the city but live outside it.

Moody's Investors Service had called the tax a credit positive for Scranton.

The city has struggled with its finances in recent years. In 2012, short on cash, Scranton paid all its employees minimum wage for two weeks after it missed a parking authority bond payment and the credit markets shut it out.

A month ago, state Auditor General Eugene DePasquale warned that Scranton's pension fund could dry up in five years.

A message seeking comment was left with city business Administrator David Bulzoni.