HARRISBURG, P.A. (KYW Newsradio) — The Pennsylvania Senate passed a bill on Monday that would significantly reform Philadelphia’s collection of wage tax from commuters that work in the city, but Democrats in Harrisburg say that’s as far as it will go.
Bucks County Republican Frank Farry’s bill would not eliminate the 3.4% wage tax non-city residents pay if they work in Philadelphia, but it would require the city to pay back some of the collected tax to the employee’s home county.
“This has nothing to do with repealing the wage tax. You can charge your 3.44% to commuters that come down there and actually work in the city,” said Farry. “All we're asking for is every municipality in this Commonwealth be treated the same, and that Philadelphia remit, through the earned the equivalent of the earned income tax back to the home municipalities.”
Farry cited Bensalem as an example, and said the county loses “roughly $2.5 million annually” that residents pay to Philadelphia in wage tax.
“That is money that, quite frankly, should not be in Philadelphia’s coffers,” he said.
The required pay back would not apply to commuters from New Jersey or Delaware.
The bill passed the Senate largely along party lines, with three Democrats, including Bucks County Senator Steve Santisiero, voting in favor and one Republican Senator — Northeast Philly’s Joe Picozzi — voting against the measure. It passed out of committee back on June 10.
Philadelphia Democratic Senator Sharif Street said the potential revenue loss for Philadelphia because of the bill would lead to significant service cuts to the city.
“Which could hurt businesses like Comcast and Aramark, universities like Temple, LaSalle, Drexel, and the University of Pennsylvania, all of which drive economic resources to the Commonwealth,” said Street. “It is a bad idea. It is a bad bill.”
The bill now heads to the State House, where Democratic leaders say it has no chance of passing.