SUNBURY — A public hearing to maintain an increase of the tax levy and earned income tax on the residents of the city of Shamokin will be held 11:15 a.m. Dec. 4 in Courtroom No. 3 of the Northumberland County Courthouse, Second and Market streets.
The city claims in a petition to the court that a levy of 35 mills, which is 5 mills in excess of the rate the city can impose on its own without court approval, is required to balance the 2019 budget.
The court has approved city petitions to maintain the 35-mill real estate tax for 10 consecutive years and the two percent earned income tax the past four years. City officials have said that both measures generate revenue for the city, which has been under the state’s Act 47 program for fiscally distressed municipalities since February 2015.
Increasing real estate millage is expected to generate approximately $115,000 for the city since one mill is equivalent to $23,000. Hiking the earned income tax from one to two percent will result in an additional $840,000 in revenue for the city.
City Administrator Robert Slaby stated during last year’s hearing that “drastic measures” would have to be taken if the petition was not approved by the court.
“We would run out of money in September or October and would have to cut services or positions to make it to the end of 2018. The tax increases will keep us operating and enable us to stay in the black,” he said to presiding Judge Hugh A. Jones.
In the current petition, the city states the increase in earned income tax for fiscal year 2018 has enabled council and Mayor John Brown to prepare a proposed balanced budget for 2019.
“City council and the mayor carefully considered alternative means for raising the necessary revenues to protect the safety and welfare of its residents, but there was no alternative but to request that the increase in the millage and the increase in the earned income tax remain in place for the fiscal year 2019,” the city states in the petition. “If the city of Shamokin is unable to levy and assess the additional milage and the percentage increase of the earned income tax, it will find itself unable to balance its budget for the fiscal year 2019 and thereafter.”
Shamokin was declared a financially distressed municipality by state Department of Community and Economic Development (DCED) Secretary Alan Walker on June 16, 2014. On Feb. 23, 2015, city council unanimously adopted a financial recovery plan containing 128 initiatives.
Financial distressed municipalities normally remain under Act 47 for five years, but they could be granted a three-year extension by the state, depending on their circumstances.