Johnstown Village Council on April 21 voted 4-1 to repeal the income-tax credit for most of its residents.
Johnstown's tax rate is 1 percent for all residents who live and work in Johnstown. The rate is 0.5 percent for residents who work in and pay taxes to another municipality, according to village finance director Dana Steffan.
Effective July 1, those who work outside Johnstown and pay municipal income taxes to another municipality no longer will receive credit for paying taxes elsewhere.
The tax-credit repeal is expected to generate an estimated $246,000 per year, according to information from the Regional Income Tax Agency.
The tax-credit elimination will affect 1,665 residents, or 71 percent of the population, according to 2013 RITA filings.
Village officials have said the revenue is needed partly because of the elimination of the estate tax, the reduction in local government subsidies from the state and employers moving out of the village.
The additional income is planned to be used for reconstruction of Concord Road and Jersey Street, installation of a left-turn lane on U.S. Route 62 and other capital improvements.
Mayor Sean Staneart said the decision was necessary so the village doesn't miss out on opportunities to alleviate traffic and road problems.
"I want people to move here, and they won't move here if the roads are falling apart and we can't maintain our village," Staneart said.
He said he would have preferred to take an income-tax increase to voters in November, but the need for income was too great to wait.
More than a dozen residents attended the council meeting to voice their opposition, calling the decision unfair.
Johnstown resident Steven Snyder said he lives in Johnstown but works in Whitehall.
"Don't chase people like me away," he said. "That's not how you get growth."
Resident Rob Clemens said it doesn't seem fair to raise taxes on only some people.
"I'm trying to raise a family, and I hope you can find another way instead of taxing the heck out of people," he said.
Councilman David Keck said he welcomed the public discussion and that he hopes residents would see the results of the increase.
"At this time, we don't know of a better way than this for us to get the income we need," Keck said. "Without this, the rest of your roads will look like Concord Road."
Councilman Bill Van Gundy, who cast the only dissenting vote, said council members have scrutinized the figures for many months, trying to make it work.
"This is a tough decision that has weighed heavily on me," he said. "We have lost revenues from other sources, and now we have to do what is best for everyone."
Steffan said residents may begin to pay by adjusting their 2015 tax estimate by contacting RITA or by logging into their account online.
When residents file 2015 taxes in 2016, half of the 2015 income will be taxed at the current rate, and the other half of the year will be taxed at the new rate.
Jim Lenner, village manager, said he shares the view that the village needs the money now. He said the meeting brought about a good dialogue, and he was happy that people were sharing their thoughts.
"I appreciate and encourage the discussion," Lenner said. "I'm glad people took time out of their evenings to give us their input and share information with us."
In other matters:
* Council voted unanimously on a 5-percent water and sewer rate increase, effective Jan. 1, 2016.
Each year, council will re-evaluate the water and sewer rates to determine whether an increase is necessary.
Staneart said previous rate increases have not kept up with the rate of inflation.
With the increase, a typical monthly bill of $29.50 would be increased to $30.98.
* The village agreed with RITA to distribute a $175,000 refund to Atrium in three installments May 1, June 1 and July 1.
Steffan informed council Feb. 17 of a significant portion of funds that Johnstown would have to pay back after yet another tax mistake gave the village money it should not have had.
According to Steffan's council report, Atrium, a screen-printing company based in Johnstown's business park, has an unpaid tax refund of $175,000 from last year.
* Bids for the Raccoon Creek pedestrian bridge will be opened Thursday, April 23.