The Herald, Sharon, Pa.

December 17, 2013

Higher EIT considered

Raising tax to 2% may help city exit Act 47

By Meghan Keely
Herald Staff Writer

FARRELL — Farrell council met in special session Monday evening to consider an increase in the Earned Income Tax.

An additional tax of 0.2 of 1 percent on income earned by city residents and on net profits of businesses conducted by residents was accepted on its first reading by all council members except one.

Councilman Eugene Pacsi said the increase from the current 1.8 percent would attack the working people of Farrell.

“There is a small percentage of working people in our city and this will cause a bigger burden on them,” Pacsi said of raising the tax to 2 percent. “I understand other areas have a higher tax but I think the state needs to look at other alternatives and change laws for distressed cities.”

Farrell is an Act 47 community, meaning it has been declared financially distressed by the state.

“In order for the city to exit from Act 47 we need this recovery plan,” said City Manager Michael Ceci. “We need to slowly raise the earned income tax over two years and match our neighbors at 2.5 percent. If ever a time to do this, the time is now. I have presented a budget with no other tax increases. We can keep track of the money gained this way and how it helps.”

Jonathan R. Ingram of The Novak Consulting Group is the city’s Act 47 coordinator and he suggested the city take the opportunity that is available now.

“This is how to get the city to where it can exit Act 47,” Ingram said. “My recommendation would be to increase the Earned Income Tax.”

Ceci said the tax would amount to $60 a year for a resident making $30,000 a year.

The second reading of the tax ordinance and final vote will be Dec. 23.

An adjusted budget to reflect the change if it’s passed will then be presented at council’s January meeting.