Lehigh Valley

Caution flags raised over proposed commuter tax

Easton considers commuter tax

EASTON, Pa. - A group of people who work in Easton but don't live there warned of dire consequences Tuesday night if the amount of earned income tax they pay is increased.

In turn, city council and the mayor warned the consequences could be even more dire if they did not impose the so-called "commuter tax," which would help meet the city's 2012 pension fund payment of $3.5 million.

Council members listened to the members of the public for more than an hour and then responded to their concerns.

At the end, none of them fully endorsed upping the rate from 1 percent to 1.75 percent -- the same rate paid by city residents. But several seemed to be leaning that way, despite saying that raising the tax would be "a tough call," "something I will really struggle with" and "a decision you don't like to make."

Mayor Sal Panto seemed to sum up the mood when he said, "I'm not totally sold on this, but it's the tool -- the only tool -- that the state gives us."

Officials say almost 10,600 people would be affected by the change, with the average worker paying about $130 more a year. They say the tax increase would raise about half of the money needed to fill an expected $3 million hole in the 2013 budget.

Adrian Shanker, a Bethlehem resident who helps run Wolper Subscription Services in Easton, said the higher tax would make it harder to recruit people to work in Easton and be a "disincentive" for his business to remain in the city.

Other Wolper employees, including a woman who relocated from Harrisburg in January, also spoke against the proposed hike. One of them predicted that workers would curtail eating lunch and shopping in the downtown and attending shows at the State Theatre. Another complained that commuters "would not have a voice in how the money is spent."

Armand Christopher, of Stockton, N.J., whose business in Easton's Alpha Building employs about 15 people, said the commuter tax amounts to a pay cut for his workers. "The last four years have been very difficult," he said. "We're struggling to survive." Then he added, "My corporation has no ironclad reason to remain in this city."

Easton resident Drew Anderson had a different take on the tax question. He told council and the mayor they have "not been assertive enough" in getting telecommuters to pay taxes. He said, "The telecommuter should be taxed where he lives, where he sleeps and where he sends his kids to school."

He said a telecommuter tax "is an SOB to collect, but it can be done."

City Administrator Glenn Steckman said the council could raise the earned income tax .5 percent, increase property taxes 5 mills and lay off 25 workers and still be $400,000 short in meeting the 2013 budget.

The mayor quickly added, "We're not talking about layoffs yet. Of course, I don't know what things will look like on Oct. 1."

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