Bill To Keep Taxes In Bucks County Passed By Senate

MIDDLETOWN TOWNSHIP, PA —Bucks County is losing millions of dollars to Philadelphia's city tax, State Sen. Frank Farry said.

Farry, (R-6), is aiming to keep more tax dollars in Bucks County with his Commuter Tax Fairness Act, which received state Senate approval Wednesday and now heads to the state House of Representatives for consideration.

“Because residents who live in surrounding municipalities but work in Philadelphia pay all of their local income tax to the city rather a portion to their home municipality, the tax burden is greater for non-Philadelphia workers of those municipalities,” Farry said. “My bill would keep a fair share of tax dollars local. Your local tax dollars should be used to help your community.”

The city wage tax of 3.44 percent is imposed on salaries, wages, commissions, and other compensation paid to employees working for a Philadelphia employer. Non-residents —even those who work remotely —are forced to pay the full Philadelphia City Wage Tax if their employer is based in the city.

The Sterling Act, enacted in 1932 to assist Philadelphia following the depression, is Pennsylvania’s first local income tax enabling legislation and grants the City of Philadelphia broad taxing authority.

With the passage of the Commuter Tax Fairness Act, the city wage tax for non-residents would remain at 3.44 percent but 1 percent could be remitted to the workers’ home municipalities for municipalities that have an earned income tax.

This would put Philadelphia in line with more than 2,500 other local governments.

“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 municipalities in his 6th Senate District.

Farry represents Bensalem, Warminster, Warrington, Middletown, Warwick, Upper Southampton, Lower Southampton, Northampton, and Wrightstown townships, and Ivyland, Penndel, Hulmeville, Langhorne, and Langhorne Manor.

During a March public hearing at the Middletown Township Municipal Building, Farry revealed that Bucks County municipalities are shortchanged close to $10 million annually.

That included Bensalem Township at $2.5 million, Northampton Township at $1.1 million, and Middletown Township at $685,000 annually.

Bensalem Township Mayor Joseph DiGirolamo testified in March that Bensalem wasn't "asking for anything unfair."

“While every other municipality in the Commonwealth must reimburse earned income tax revenues collected from non-residents to the home municipalities of those non-residents, Philadelphia is alone in its ability to keep for itself, both the earned income tax of its residents and all of the non-residents who work in the city, without having to remit any portion or percentage of those non-resident revenues back to the home municipality of those non-residents,” DiGirolamo said.

Joseph Pizzo, Bensalem Township's solicitor, stated in his testimony, “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, 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.”

Robert Pellegrino, Northampton Township manager said, the money is needed in his township and others in Bucks County for those trying to foot the bill 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.