TAX NEWS - JUNE 2010

Pennsylvania Tax: Fight over bylaws of tax collection committee nearing compromise

The nascent Lackawanna County Tax Collection Committee remains at a standstill while members work toward a compromise regarding the controversial weighted vote system that gives a majority of the power to Scranton and several school districts.

So far, the group has missed the April 15 deadline to pass bylaws because of a boycott led by representatives of several smaller municipalities upset about the state-mandated weighted vote system. If they do not select a countywide tax collector by January 2012, wage taxes cannot be collected for any county municipality or school district.

The tax collection committee is one of 69 throughout the state created under Act 32. Eventually, the committee will have to choose a single collector to gather and distribute wage-tax revenue for all the municipalities and school districts.

Act 32 set up a system wherein each municipality and school district gets a weighted vote on a committee based on population and wage tax revenue.

In Lackawanna County, Scranton and its school district control 44 percent of the committee's vote. Officials in smaller municipalities say the weighted vote system does not allow them a fair say.

The state Department of Community and Economic Development has been working with the group to come to a compromise regarding the weighted vote system, and another closed-door meeting is scheduled for next week. Although other tax collection committees - including those in Luzerne and Wayne counties - have had issues with the weighted vote, Lackawanna County is the only committee where DCED has gotten involved in helping to reach a solution.

Although he declined to give any specifics about proposals on the table, Steve Fishman, chief legal counsel for DCED, said he believed they were close to a compromise.

"A lot of progress has been made in clarifying everyone's positions," Mr. Fishman said, adding that the committee could start meeting again as early as late June.

Not everyone is as hopeful, however. Mayfield Mayor Al Chelik has been leading the fight against the weighted vote and said he will continue to meet with mediators to come up with a solution.

"I feel like more people are listening to us than ever before," Mr. Chelik said.

Several state legislators also are keeping tabs on the situation in Lackawanna County. State Rep. Ed Staback, D-115, Archbald, was one of several legislators who introduced House Bill 2412, which aims to change the weighted vote to a one-delegate, one-vote system.