The structural budget issues faced by Lancaster and other Pennsylvania cities are detailed in a report released earlier this year by the Pennsylvania Economy League.
It’s title: “It’s Not 1965 Anymore: State Tax Laws Fail to Meet Municipal Needs.”
It was in 1965 that the state Legislature passed Act 511, a law reining in a tax regime that the report characterizes as “Wild West-like.” It sharply curtailed muncipalities’ ability to levy taxes other than property taxes.
In the nearly six decades that followed, suburban population growth exploded, drawing away the bulk of cities’ middle-class households.
“Left behind in the dense urban cores were predominantly lower income residents who were now saddled with the upkeep of expensive public services and fraying infrastructure often used by the entire region,” the report says.
Compounding the problem for cities were their ballooning health care and pension costs.
The report suggests reforms such as regional sales taxes or raising the caps on earned income taxes. The latter are paid by commuters where they work, rather than where they live.
In the meantime, however, cities must work within the framework they’re given.
