A panel of three judges Wednesday rejected Scranton‘s petition for a 1 percent wage tax on the nearly 23,000 nonresidents who work in the city but live elsewhere.
The city may make up the resulting budget shortfall next year by borrowing more next year than had been anticipated or selling an unspecified city asset, Mayor Chris Doherty said.
In their 50-page ruling, Lackawanna County Judges Terrence Nealon and Robert Mazzoni and visiting Pike County Judge Harold Thomson stated the city failed to prove its case for a 1 percent earned income tax on the 22,655 nonresidents working in the city.
The city failed to pass a required hurdle of having “substantially implemented” a revised recovery plan, by failing to fulfill two revenue generators in that plan. Those included failing to obtain a commitment from a lender for a lease-back borrowing measure to be undertaken next year; and failing to obtain commitments from nonprofit entities for significantly increased donations, according to the ruling.