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Township briefed on state proposal to raise local services tax; manager estimates $1.6M potential revenue
Summary
Manager Carolyn McCreery briefed the board about House Bill 2488, which would raise the local services tax from $52 to $156 annually with a $15,600 exemption; she estimated Montgomery Township could receive an additional $1.6 million if the board chose to adopt an increased rate under the state law.
Manager Carolyn McCreery provided an informational briefing on proposed state legislation (referred to in the packet as House Bill 2488) that would raise Pennsylvania's local services tax from its current maximum of $52 per year to up to $156, with a proposed $15,600 exemption (current exemption $12,000). McCreery emphasized this tax is collected by payroll withholding from individuals who work in the township and that municipalities would need to choose to adopt a higher rate locally to realize additional revenue.
McCreery said the township collected $806,056 in LST in 2025 (with $606,936 allocated to the general fund and $199,120 to the fire services fund) and estimated that raising the local rate to $156 could produce an additional roughly $1,600,000 for the township if adopted. She noted that at least 25% of LST revenue must be used for police, fire and emergency medical services and that the bill is still moving through committees in Harrisburg. The presentation was informational; no board action was taken.
