Rick Gray
Lancaster Mayor Rick Gray and mayors from 20 other Pennsylvania cities hope speaking with one voice will help them be heard in Harrisburg.
Gray joined mayors from across Pennsylvania and 16 borough managers, council members and other municipal officials in the State Capital building Monday afternoon to call for municipal tax reform.
The group, assembled by the Pennsylvania League of Cities & Municipalities, seeks to give counties the option to levy a 1 percent sales tax. If such a tax is approved by the General Assembly and county commissioners, half of the tax revenue would be used to lower local school taxes. The remaining half would be split between county government and cities.
Many cash-strapped cities, including Lancaster, have been forced to raise property taxes and lay off personnel to deal with lower tax revenue and increased costs.
The mayors also are seeking state compensation for tax revenue lost to nonprofit organizations — government offices, hospitals, universities, churches and social service agencies — within their cities. Those nonprofit groups pay no real estate taxes to the host municipality. In Lancaster, as much as a quarter of all property is owned by nonprofits.
Although Lancaster is in better financial shape than most cities in the state, Gray said "everybody is struggling."
"I think sooner or later, you're going to see a municipality really go into bankruptcy in Pennsylvania," he said.
Eighteen cities, including Reading and Pittsburgh, have sought support under the state's Act 47, which allows state officials to take some financial control.
Yet, Gray said, that just buys time for distressed cities.
Real, systemic reforms need to be made.
Those reforms should also consider state requirements for city spending. State law dictates municipal spending on pensions and services, such as requiring them to have paid fire departments.
"I don't think people know that the majority of money spent in Lancaster (city government) city officials really have no decision on," said Gray.
Although spending was not the subject of Monday's news conference, Gray said mayors are talking about it and that it's another facet to the issue that the General Assembly must address.
"We can't just continue to increase taxes without addressing expenses," said Gray. "If we continue to increase taxes, we just keep kicking the can down the road."
In addition to the 1 percent sales tax option and compensation for nonprofits, the mayors also called for receiving a local share of increased state sales tax revenue. Gov. Ed Rendell has called for sales tax exemptions to be lifted on many goods and services. The mayors are asking for a cut of that additional revenue.
They are also calling for the option of levying a 10 percent drink tax on alcoholic beverages served in bars and restaurants. Such a tax already exists in Philadelphia and Allegheny counties. Proceeds from this tax would be used to fund police and ambulance costs associated with alcohol consumption.