Possible Sales Tax Increase for Lackawanna County

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SCRANTON -- Scranton's plan to pay off debts is raising eyebrows all across Lackawanna County because it could affect everyone who spends money there.

The city's recovery plan could lead to an increased sales tax for all of Lackawanna County, but lower county property taxes.

Politicians said that the county sales tax is just a possibility at this point and wouldn't take effect for a few years, but still officials in the city of Scranton are counting on the tax to get the city out of its financial hole.

Last week, Scranton city leaders laid out a road map of numbers, a recovery plan for how the city will pay back its debts, and it could change how everyone in the city, and Lackawanna County, is taxed.

There are a lot of hypotheticals in the recovery plan, including a county-wide one percent sales tax increase. Along with benefiting the county, the sales tax would net the city more than $5 million a year if the state government approves it.

Lackawanna County commissioners also must sign off on it. Commissioner Jim Wansacz said he supports it, and the sales tax is close to reality.

“We've just started meeting on this, working pretty hard. What we want to do is start working with the largest counties in the northeast to get them on board. So far, everyone's been on board,” said Commissioner Jim Wansacz.

Scranton's recovery plan also calls on non-profit organizations. There are about $160 million worth of non-profit properties in the city of Scranton, and Scranton hopes to make more that $2 million a year from donations from those organizations.

Since non-profits like churches, three colleges, and the Scranton Cultural Center don't pay taxes, Scranton will start asking for more financial support as early as next year. Something the director for the American Red Cross wasn't happy to hear. He said non-profits have trouble paying their own bills, and shouldn't have to pay for Scranton's.

For county residents whose sales tax dollars may also go to pay Scranton's bills there is something in it for them. Commissioner Wansacz said a sales tax could cut your county property taxes in half.

“It would be beneficial to everyone in the county, all the municipalities, and the taxpayers, because with it, the legislation that is proposed now, we're looking at a 40 to 60 percent cut in your property taxes,” said Wansacz.

Commissioner Wansacz also said since the sales tax still needs state and county approval it will likely not take effect until 2014 meaning the city of Scranton won’t see that revenue until two years from now.