SCRANTON — The city council in Scranton is set to vote this week on a tax to raise money for the city’s struggling pension fund.
It would be a tax paid by people who don’t live in Scranton but work there.
The city of Scranton has tried to pass a so-called commuter tax in recent years but it was turned down by the courts. Mayor Bill Courtright says the latest tax he’s proposing wouldn’t need court approval because it would go directly into the city’s pension fund which the mayor says is one of the most poorly funded pensions in the state.
When Mayor Courtright rolled out his financial plan for the city last week he said everyone would have to share in Scranton’s financial recovery.
His first move is asking city council to approve a tax on people who work in Scranton, but do not call it home.
“If we were going to go with just property tax, I would have to raise property tax upwards of 119 percent. I can’t in good conscience raise property taxes 119 percent when there’s other options out there, such as act 205,” Mayor Courtright said.
Act 205 is a state law that allows the city to tax commuters without court approval so long as the money feeds Scranton’s broken pension system that supports police, fire, DPW, and other unions.
The city of Scranton’s pension fund is labeled “severely distressed” one of the worst in the state. But the city needs that designation in order to levy this tax against people who live here.
One of the city’s largest employers is the University of Scranton and many of its employees, like Caitlyn Hollingshead of Plains, already spend money getting to and from work every day.
“Especially, being a commuter, coming to Scranton a half hour each way every day, it’s a lot of little things that add up that you don’t even factor in,” Hollingshead said.
Commuters don’t really have a say in sharing the city’s financial burden. If all goes as planned, the mayor says it could be imposed before the end of the year.
It would be a tax of .75 percent, or about $375 a year for someone with a salary of $50,000.
“If everyone chips in a dollar, for everyone, for every person, it’s not going to hurt each person but it’s really going to accumulate when you have thousands and thousands of people here. So, I would say it’s overblown, $375 a year,” said Neill Ackerman of Scranton.
Mayor Courtright says if the tax on commuters is passed by city council, the state will decide how long it will have to stay in place to get the pension fund out of the red.
The mayor estimates the commuter tax would raise $5 million a year.