PITTSBURGH -- With no word yet from the Legislature on new taxes for Pittsburgh, Mayor Tom Murphy filed a request Monday with the state Department of Community and Economic Development to have the city classified as "distressed" under Act 47.
"I cannot be sure when Harrisburg will act (on the request for tax reform)," Murphy said. "I must use every tool available to us to proect our citizens and our stakeholders."
Murphy said the city will have a $39.3 million deficit in 2004, even if $40 million saved this year in job cuts and the closure of some city facilities is made permanent. He is required by law to balance the budget, but he said it can't be done because the city has already "cut to the bone."
The mayor wants to raise the $10 occupation tax on commuters to at least $50 and institute payroll taxes on all companies. He said the changes are necessary because Pittsburgh's tax structure is based on a city that no longer exists in the same form as it did years ago.
Designating Pittsburgh as a distressed community under Act 47, also called the Municipalities Financial Recovery Act, would clear the way to restructure the tax base and reopen union contracts for negotiation.
The state Department of Community and Economic Development must review Murphy's request and decide whether the city is financially unable to pay employees and creditors and provide necessary services to residents. If so, then the DCED would draft a financial recovery plan, subject to approval by Murphy and City Council.
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