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Staff report outlines implications of proposed earned income tax exemption for low-income residents
Summary
City staff presented an initial report on a possible earned income tax (EIT) exemption up to the state ceiling of $12,000, estimating administrative costs, refund mechanics, and potential revenue shifts that could result in an overall city outlay exceeding the tax revenue foregone.
City staff presented a preliminary report to the Finance Committee on July 1 analyzing a potential earned income tax (EIT) exemption for lower-income Lancaster residents.
The report, requested by Councilor Hirsch, reviewed how the city’s EIT functions under the new home rule charter: residents currently pay a 1.1% city EIT plus a 0.5% school district levy (1.6% total). Staff advised the state sets a maximum exemption ceiling at $12,000 and recommended analysis focused on that ceiling.
Staff said the exemption must…
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