Watch Live: THON 2018

Scranton Asks Court to Triple Local Services Tax

SCRANTON -- The city of Scranton was in court Tuesday asking a judge to continue a tripled tax on people who work within the city limits. City officials said the tax is necessary for Scranton to shed its financially distressed status.

For the past three years,  Scranton has imposed that tripled local services tax on people who work in the city. Those people pay $104 more than most people in the state. Scranton's attorneys are asking to extend that tax in 2018.

Jenna Illing is from Wyoming County, but she and her husband chose Scranton's Courthouse Square for their new business, Blue Bee Bistro.

"We live two different lives, in the country and here, but the taxes didn't really bother me at first. It wasn't enough money that it's really irritated me at all," Illing said.

Because of their location, Illing and her employees pay an extra $104 every year for something called the local services tax.

The idea is that while you're at work you rely on that community's police and fire services.

For the past three years, people who work in Scranton pay three times as much as most.

"I don't have a problem giving back a couple of dollars to get what I get from the city," Illing added.

The local service tax affects 30,000 people who work within the city limits. City officials tell Newswatch 16 it helps to spread the tax burden to people who may not necessarily live in Scranton and pay property taxes there.

Each year, the city needs court approval to collect the tripled tax which raises close to $5 million per year. Attorneys for Scranton were back in court Tuesday making arguments to keep it.

"The LST is critical. The LST is another revenue source that you don't rely on property taxes, or other taxes. It spreads the tax burden more evenly. Those people who use city services do pay a portion of that charge, and it helps to balance the budget," said Gerald Cross of the Pennsylvania Economy League.

The Pennsylvania Economy League is the state organization that oversees Scranton's finances because it's labeled financially distressed.

Cross tells Newswatch 16 that Scranton is poised to shed that label in 2021. It then will no longer be allowed to triple the LST.

There were not any workers in court Tuesday, but Scranton resident Marie Schumacher was. She is worried about what happens when the distressed status and the tripled LST goes away.

"My concern is, after all this time, nobody has been able to say how this tax, losing this tax, as we will in 2021, how that hole is going to be filled," she said.

The judge who heard the city's arguments to keep the tax will make a ruling later on. But during the hearing Tuesday, he applauded the city's efforts to get its finances under control.

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