By Richard Fellinger
The Lebanon Daily News (Pennsylvania)
Copyright 2006 Lebanon Daily News
All Rights Reserved
HARRISBURG, Pa. — Lawmakers are trying to devise a plan to make an unpopular $52 job tax easier to swallow.
Changes to the Emergency and Municipal Services Tax, which is deducted from many workers’ paychecks in one lump sum in January, could be approved this week.
The changes would require employers to collect the tax in a series of small deductions from paychecks instead of a one-time lump sum and would exempt low-income workers from paying it at all.
For the past two years, municipalities have been allowed to levy the tax up to $52 on people who work in the municipality, and lawmakers have been hearing complaints from workers who are bothered when a big chunk gets deducted from their pay all at once.
The revenue pays for police, fire services and local roads in most cases. In 2004, lawmakers approved the $52 ceiling for the tax, which had previously been capped at $10, after some municipal officials argued that rising costs for emergency services left them cash-strapped.
Local municipalities that levy the tax include the city of Lebanon; the boroughs of Palmyra and Myerstown; and North Londonderry, South Lebanon and Union townships.
A House-Senate conference committee is eyeing the bill to change the way the tax is collected. The conference committee was expected to sign off on a plan today, and the Senate is expected to follow suit, said Erik Arneson, chief of staff to Senate Majority Leader David J. Brightbill of Lebanon County.
One expected change would require employers to deduct the tax during every pay period. Under that scenario, a worker paid bi-weekly would have $2 deducted from every check.
Another change would be a mandatory exemption for workers earning less than $12,000 a year. Current law allows municipalities to exempt low-income workers but does not require it.
The changes would go into effect in January in most municipalities.
“We’ve consulted with employers and accountants, and everybody assures us the computers can handle this in January without an issue,” Arneson said.
Lawmakers are also planning to change the name of the tax to the Local Services Tax to clear up confusion over what the revenue may be used for.
The conference committee was formed because the House and Senate have been unable to agree so far on how to change collection of the tax. The two chambers have passed different versions of the bill.
“It’s not like there’s a fight between the House and Senate,” said Steve Miskin, spokesman for House Majority Leader Sam Smith, R-Jefferson. “There is some technical stuff that needs cleaned up, and the way to get it done is a conference committee.”