Harrisburg's City Council may allocate $7,500 for its defense of a lawsuit the city's receiver has filed to force it to triple its earned-income tax, the Commonwealth Court of Pennsylvania ruled.
Judge Bonnie Brigance Leadbetter limited the fees to the defense of receiver William Lynch's petition for a writ of mandamus to order the council to hike the tax to 1.5% from 0.5%, as part of his proposed recovery plan for Pennsylvania's capital city.
The council opposes the increase, saying local taxpayers should not assume an undue burden in the city's recovery. Harrisburg has a $310 million bond debt burden that it cannot pay, and could run out of money in October.
Lynch, acting on behalf of the state Department of Community and Economic Development, had denied the City Council's request for funds to pay Neil Grover, who recently took on the case after Mark Schwartz resigned. Schwartz said the city had yet to pay him.
Leadbetter postponed a hearing on the matter from Aug. 14 to Aug. 23 in Harrisburg.