Doylestown Borough, Doylestown Township Pass Sterling Act Resolutions

DOYLESTOWN BOROUGH, PA — Doylestown Borough and Doylestown Township officials have taken action in support of legislative efforts in Harrisburg to amend the Sterling Act.

On Monday night borough council voted unanimously to pass a resolution supporting the amendment, known as the Commuter Tax Fairness Act. And earlier this month, the Doylestown Township Board of Supervisors voted to do the same at its meeting on May 5.

"We want to get back some of the money that taxpayers who live here, but work in Philadelphia are paying to the city through its wage tax," said Barbara Lyons, who chairs the Doylestown Township Board of Supervisors. "We want to get a portion of that back," she said, noting that residents who pay the city wage tax are exempt from paying the local Earned Income Tax (EIT)."Over the years we're talking about millions of dollars that have not been paid to Doylestown Township," she said.

The legislation, introduced by Bucks County State Senator Frank Farry and recently passed by the state senate, would amend the Sterling Act by requiring the City of Philadelphia to return up to one percent of the non-resident Philadelphia Wage Tax to the municipality where the employee lives.

The legislation next goes before the Pennsylvania House of Representatives where it is expected to face an uphill battle and stiff opposition from the City of Philadelphia.

The change would not impact the amount of taxes shelled out by workers, but it would redirect one percent of the 3.44 percent Philadelphia wage tax back to their home municipality if their home municipality has an Earned Income Tax (EIT) in place.

“As a formal municipal official, I know how difficult the financial challenges are for local governments and first responders. Because of Philadelphia’s City Wage Tax, millions of dollars are diverted from the municipalities where our residents live —resulting in higher taxes for basic services like fire, police, and emergency medical services,” said Farry, who represents 14 suburban municipalities in the 6th Senate District, including Warwick and Warrington townships in Central Bucks.

Enacted in 1932 to assist the city during the Great Depression, lawmakers said the Sterling Act made sense because the counties surrounding the city consisted mainly of farmland with few government services and the residents in the adjacent counties visited the city on a regular basis to shop, dine and avail themselves of businesses and services not available in the adjacent counties.

Since then, the suburban landscape surrounding the city has changed dramatically.

"As times have changed, the needs and costs to deliver governmental services have changed during the almost century since the Sterling Act was first adopted," said Bensalem Township Solicitor Joseph Pizzo during a March public hearing on the legislation. "Now, more than ever is the time for the legislature to consider and adopt changes to the Sterling Act so as to alleviate, if not eliminate, its negative impacts on the suburban communities surrounding the City of Philadelphia.”

Northampton Township Manager Robert Pellegrino said the money is needed in his township and others in Bucks County to foot the bill for the increasing costs for emergency services.

“Many suburban Philadelphia communities are also dealing with a lack of volunteer firefighters and are transitioning to full-time paid fire services that will require a significant financial investment in personnel and equipment,” he said.

During the March public hearing, Senator Farry revealed that Bucks County municipalities are shortchanged close to $10 million annually as a result of the act. That includes Bensalem Township, which is losing $2.5 million in EIT revenue; Northampton Township, $1.1 million; and Middletown Township, $685,000 annually.

If the legislation is approved, Doylestown Township stands to recoup $162,100 a year in lost EIT revenue to the City of Philadelphia while Doylestown Borough would realize an additional $65,351 a year. In Doylestown Township, 377 residents pay the tax to the city at the non-resident rate of 3.448 percent while in Doylestown Borough 161 residents pay the city wage tax.