We hope events in Harrisburg aren't an omen of what's to come for Altoona as it tries to emerge from distressed status.
Commonwealth Court Judge Bonnie Leadbetter on Monday ordered Harrisburg City Council to enact within 15 days a temporary additional 1 percent tax on earned income to fund city services.
The additional tax will be in effect for one year. But there could be petitions to extend it.
This isn't the way tax decisions should be made.
Like Altoona, Harrisburg has a 1 percent tax on earned income, which is split between the city and the local school district. Altoona also levies a 0.2 percent pension surtax on income earned within city limits.
Leadbetter said Harrisburg's additional 1 percent tax to be imposed will go solely to the city to fund daily operations.
The judge's ruling grew out of a disagreement between the council and the receiver appointed by the state Department of Community and Economic Development as part of the Act 47 Distressed Municipalities Program. The receiver had called for the tax increase, but the council refused to enact it.
The receiver then asked the courts to order the tax increase. Leadbetter could not enact the tax increase, but she ruled she had the power to order the City Council to approve it.
Without a tax increase, Harrisburg could run out of money to pay for day-to-day operations in October, a spokesman for the Office of the Receiver told PA Independent. The state's capital city could be $12.6 million in the red by the end of the year if all debts are paid.
A court, like the one in Harrisburg, only serves as a wedge between the public's elected representatives and the receiver who is to try to help guide a municipality out of a near-bankruptcy status. It's better for the community and would seem to pose a bigger chance for success for the two entities to work together.
We hope that Altoona can avoid such controversy as it strives to emerge from distressed status. DCED approved Altoona's entry into the distressed program on May 3 and on June 5 appointed a receiver, the consulting firm of Stevens & Lee of Reading, to develop a plan to try to get the city back on financial footing.
Work on the plan has been delayed by the lack of a contract between the state and Stevens & Lee.
It likely will be a couple of more months before City Council and residents see the plan that Stevens & Lee creates in an attempt to get Altoona back in the black. Such a plan would be due 90 days after the receiver has a signed contract with the state.
Given the nature of such a plan, it's unlikely that all of the provisions will be accepted with open arms by everyone. But with cooperation, the city and its receiver have a chance to avoid winding up in court.
If so, Altoona's path to recovery might not be as divisive as the one in Harrisburg.
