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Harrisburg earned income tax hike may not be temporary

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Harrisburg Mayor Linda Thompson (D) said Wednesday she doesn’t think the recent earned income tax hike should be rolled back, despite members of City Council saying last fall the measure would last one year.

“Right now, going into the next five years, I see that tax being just where it is, and that way people better prepare for their pocketbooks,” said Thompson.

City Council voted in October 5-2 to increase the tax from 1 percent to 2 percent. The measure is part of the city’s Act 47 recovery plan. It was estimated to bring in an additional $5 million this year for essential city services, not debt.

At the time, Council President Wanda Williams described the vote as difficult and had been unwilling to approve the increase for months.

On the night of the vote she said, “I’m asking (the citizens), please, have faith in City Council. And, I can assure the residents of the city that we are really coming to some good terms in the agreement that we have.”

Council members were clear the increase would last for one year.

A city resident making $40,000 per year is paying an extra $400 in tax. The money goes to essential city services, not debt.

Beyond helping the city pay its bills, the tax hike was also meant to bring the city’s creditors to the negotiating table.

City leaders have been saying there’s been significant progress in the closed-door meetings, but the notion of leaving the elevated tax in place has some residents concerned.

“I don’t trust them at all. It’s the game they play. It’s about getting as much money off the poor as they can,” said Naed Smith.

Maurice Poles Jr. said he’s noticed the difference in his paycheck. “Struggling to pay bills, daycare, life in general. We do everything we can do,” he said.

Eric Papenfuse, who’s running against Thompson in the Democratic primary for mayor, said if the concessions from the creditors don’t come, the tax should be rolled back.

“The only occasion in which you would see that rolled back would be if the creditors don’t come to the table, and then you’re going to have a lot more to worry about because then the city is going to be in bankruptcy,” said Papenfuse.

Independent candidate Nevin Mindlin, who will face off against the winner of the primary, said the tax never should have been increased and wants it rolled back to 1 percent.

“It’s not good for Harrisburg. We’re driving people out of the city. We need to be able to bring people into the city. it’s the only way we’ll get beyond our difficulties,” said Mindlin.

City Controller Dan Miller (D), also a candidate for mayor, said Wednesday he would support keeping the tax at 2 percent only as part of an overall solution to the city’s financial crisis. He said it was a mistake to increase the tax, as creditors may ask city leaders to increase it further.

Lewis Butts did not return a call seeking comment.

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