HARRISBURG, Pa. (KYW Newsradio) — Efforts to change how Philadelphia handles wage tax collected from people who work in the city but don’t live there are once again underway in the Pennsylvania Senate.
Pennsylvanians who don’t live in Philadelphia but work there pay the city a 3.4% wage tax. Unlike every other municipality in Pennsylvania, none of that collected tax goes back to the municipality where the person lives.
There have been numerous attempts over the years to change that situation. The latest, from Republicans Frank Farry of Bucks County and Tracey Pennycuick from Montgomery County, would have Philadelphia play by the same rules governing every other municipality in the state. The city would send 1% of a worker’s wages back to that worker’s home municipality.
“I have a township that is $2 million alone,” said Farry, “so what that means is that municipality has to make up that $2 million on the back of their local taxpayers.”
Farry said the bill would also stop the city from charging remote workers of Philly-based companies the 3.4% wage tax.
“I have one specific constituent right now who I guarantee you is working from home, and he's paying 3.44%,” he said. “What he should be paying is 1% to his home municipality, and that other 2.44% should be going into his bank account when he gets paid.”
The bill moved out of the state Senate Finance Committee on a 7-3 vote. Chester County Democratic state Sen. Katie Muth joined all Republicans to vote in favor.
It’s estimated the legislation would take $70 million annually from Philadelphia. Democratic state Sen. Nick Piscottano, the Finance Committee’s minority chair, voiced concerns about how that would affect the city.
“I think our opposition to this bill today is more that we just didn't have enough time to kind of quantify some of these issues,” Piscottano said, “not because we're not sympathetic to the bill itself and your motivation, but because we just haven't had enough time to fully work our way through all the details.”
According to Farry, the issue has been at play for several years. The state Senate passed a similar bill last session, but it died in the state House.