Langhorne Borough Enacts Earned Income Tax

Langhorne Borough has joined a long list of municipalities across Bucks County and Pennsylvania that have an earned income tax.

Before a standing-room only crowd packed into the small meeting room at Borough Hall, the council voted 6-0 at its Wednesday night meeting to enact a 1 percent EIT. Council member Kristen Farry was unable to attend the meeting.

After listening to more than 10 audience members voice their objections to the new tax, council members took turns explaining in detail why they felt it was needed and then voted to enact it with an effective date of Jan. 1.

It will be be levied on working borough residents and also non-residents working in Langhorne with a few exceptions. Those earning less than $12,000 a year will be exempt, as will borough residents who work in Philadelphia and New York City and residents living on pensions, Social Security and other forms of retirement income.

Earned income tax paid by borough residents to municipalities where they work will now go to Langhorne, and that will mean extra annual revenue of about $100,000 for the borough, according to an estimate by Keystone Collections Group, which collects the EIT for municipalities in Bucks County. There’s no firm estimate yet on the total amount of additional revenue the tax would bring, council President Paul Murdock said.

Before the vote, audience members complained about what they felt was a lack of transparency regarding the possibility of an earned income tax.

“We weren’t informed very well,” one resident said.

There were other objections as well.

“To enact this during a period of high inflation and when the economy seems headed for a downturn, the timing just seems ridiculous,” another resident noted.

“This will have a negative effect on my family,” another said.

Council members said an earned income tax has been discussed at meetings for the last three months and that notice of Wednesday night’s meeting was legally advertised, though they added that they wished they had more staff to enable them to better communicate with residents. An EIT would provide revenue to help with that situation, council members added.

And it’s needed for many other reasons, they said. The borough needs more money to bolster its police department, attend to needed repairs and projects, provide pay raises for employees and for several other reasons, council members said.

The borough has been “running on a shoestring” and is too reliant on grants, they added.

“I understand where everyone is coming from,” Murdock said. “But this is not something we want to do, it’s something we need to do.”

He added that council did not favor hiking property taxes – which he said have not gone up since 2014 – because of the effect it would have on retired people with fixed incomes. Also, revenue from an EIT will grow more than property taxes because of rising salaries, Murdock said.

“If we raise property taxes $100, in six years it won’t really be $100 anymore (because of inflation),” he noted. Murdock added council chose a 1 percent earned income tax instead of a lower percentage in case the Neshaminy School District at some point decides to claim its one-half share of the borough’s EIT,

While there is currently no plan to lower property taxes, council members said they will look for opportunities to either reduce property taxes or the EIT percentage in the future if the new tax bolsters revenue to a point where it’s possible to do that.

“I’ll be the first person to make a motion to lower property taxes,” council member Kathy Horwatt said.

“If it ends up being too much money and the school district never comes to get its share, we can reduce it,” said Murdock, who will be paying the new EIT along with several other council members.

Many Bucks County municipalities have an earned income tax, including Langhorne Borough neighbors Langhorne Manor Borough, Penndel Borough and Middletown Township. Just before Wednesday night’s vote in Langhorne Borough, council allowed a second round of public comment and some residents said they felt better about the new tax after the reasons for it had been better explained.

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