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Latrobe urged to raise earned-income tax

Tuesday, Nov. 26, 2013, 12:01 a.m.
 

In an effort to raise revenue, Latrobe council members discussed raising the earned-income tax instead of continually drawing from the city's general fund.

City manager Alex Graziani said during Monday's council agenda preparation meeting that the budget gap this year may be about $182,000, which would leave the city with about $350,000 to $380,000 in its coffers for 2014.

The earned-income tax is currently set at 1.13 percent.

Councilman Richard Jim said if the tax, which is levied on all workers by withholding a percentage of their income through employers, was increased to 1.4 percent, the city could generate an extra $380,000 per year.

“If that were the council's method of increasing revenue there probably would not be any need for increasing real estate taxes, and I think we could eliminate the need for one of the nuisance taxes like the $5 per capita tax,” he said. “I certainly would like to see that put on the agenda.”

The tax is “elastic” based on the income of workers within the city, which varies, so Graziani said his estimates used about $825,000 for a ballpark figure.

Graziani estimated a 0.1 percent increase in his preliminary budget draft, but Jim said he would like to see it increased to 1.4 percent.

“That ought to put us in good stead to hold personnel, to keep the city viable and also maintain most of our programs,” Jim said.

Councilman Mike Skapura said he estimated that someone earning $50,000 per year would have to pay about $68 more per year, if the tax were increased to 1.3 percent.

Because of the timing, the taxes could not be recouped by the city until July 1, said solicitor Jim Kelly.

In other business, council discussed advertising the vacancy that will occur once Councilwoman Rosie Wolford takes over as mayor at the Jan. 6 meeting.

The seat, with a two-year term, would be advertised and a new council member could be appointed Jan. 6, after Wolford resigns her council seat when she is sworn in as mayor.

The vacancy must be filled within 30 days, so if it is not filled at the Jan. 6 regular meeting, a new council member must be appointed at the January agenda prep meeting or a special meeting could be called, Kelly said.

Stacey Federoff is a staff writer for Trib Total Media. She can be reached at 724-836-6660 or sfederoff@tribweb.com.

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