Murrysville Council approves 1st tax hike since 2007 on earned income, real-estate transfer taxes

Murrysville Council voted unanimously Wednesday to bump its share of the earned income tax from 0.5 to 0.7%, and its share of the real-estate transfer tax from 0.5% to 1%. It is the first municipal tax hike since 2007.

Finance Director Diane Heming said she anticipates the move will bring in roughly $1.6 million in additional revenue, and will serve as a much more stable revenue source than the traditional route of raising property taxes.

“Property tax stopped being our main source of revenue in 2012,” Heming said.

In emphasizing his opposition to council increasing the taxes, resident David Nader asked how much time council members spend trying to decrease costs.

“Fourteen years, I’d say,” said Councilman Loren Kase, referring to the last time council raised taxes of any kind. “At least 14 years.”

Both Heming and Murrysville Chief Administrator Jim Morrison have briefed council over the past year or so about a need to identify new revenue sources in order to provide its current level of services.

Council President Dayne Dice said no one on council is happy about raising taxes for the first time in 14 years, “but I believe we’ve been forced to a binary choice: raise taxes or cut services.

“The Pennsylvania Legislature has created a tax system where local property owners bear the brunt of every tax increase — and we have an opportunity here to divert a little bit of that from those property owners.”

Nader felt a traditional property tax was the best, most fair way to raise revenues. He accused council of discriminating against wage earners.

“If our municipality has a shortfall in its budget, then the municipality should make up for it,” Nader said. “Not a subset of the municipality. That’s discrimination, and I can’t believe no one on council sees it that way.”

Dice and other council members have consistently pointed to Murrysville’s sizable population of senior and fixed-income residents.

“I don’t feel that it’s discriminatory,” said Councilwoman Jamie Lee Korns. “I grew up in Murrysville, and I’ve benefited from the folks who helped build this community. I have no problem knowing that I’m not going to be contributing to pricing our seniors out of their homes.”

Councilman Mac McKenna said the council is making the move while looking toward Murrysville’s future.

“It’s not a knee-jerk reaction to things happening now,” he said. “It’s: How do we set Murrysville on a path to have the correct tax base to utilize and maintain the services we have? We’ve received some opposition, that you can count on one hand, but I think it’s overwhelmingly right for the community.”

The earned income and real-estate transfer tax hikes will begin on Jan. 1.

Chief Administrator Jim Morrison said the earned income bump in particular “is a fundamental change for the municipality.”

“The increases in the earned income tax each year compensate for the increases we see in overhead expenses,” Morrison said. “It’s a way to raise revenue and keep pace with costs that are beyond the control of municipality.”