Harrisburg’s City Council is approaching a court-ordered deadline to approve a doubling of the city’s earned-income tax, with some council members prepared to risk a contempt charge by voting against it.
The council introduced a measure Tuesday night to increase the tax to 2% from 1%, which state-appointed receiver William Lynch wants as part of the capital city’s financial recovery plan. Last week the Commonwealth Court of Pennsylvania said Lynch was within his powers to compel the council to vote for the tax.
Legal experts see the dispute as a test for whether a receiver can force a locally elected body to approve such a measure.
Most of the seven councilors oppose it. The council has scheduled a legislative session for next Tuesday, the final day to vote on the tax hike under Judge Bonnie Brigance Leadbetter’s directive.
“If the vote were held today, I’d vote no,” said council President Wanda Williams. “Speaking with our solicitor, we’re not sure whether she can really file contempt charges on us as elected officials.”
The council’s attorney, Neil Grover, has asked Leadbetter to clarify her ruling and for a deadline extension. Leadbetter, who gave the council 15 days to approve the measure, said the tax increase would last a year, though Lynch could request an extension.
She also ruled that no revenue from the tax increase would go toward the city’s incinerator bond debt, now estimated at more than $320 million.
Lynch, who has said the city could run out of money by the end of September, has yet to decide whether the city will make $3.4 million worth of general obligation bond payments due Sept. 15.
The city missed $5.4 million in GO payments in March.
“If I were in your shoes, I would vote no. I would do it as an act of civil disobedience because the decision is a deplorable one,” former mayoral candidate Nevin Mindlin told the council.
The council in December approved a 0.8% increase in real estate taxes, which Lynch’s predecessor, David Unkovic, had sought. Harrisburg’s school board in June approved 2.5% hike in its property tax rate.