'Historic moment:' Lancaster city adopts home rule charter to create new government
Lancaster is officially a home rule city after voters Tuesday approved adopting a charter that will create a new form of government and give officials greater taxing power.
Home rule shifts governing authority away from the state and into the hands of local officials and residents, though the new charter won't change too much about how the city functions.
With 31 of 40 city precincts reporting at least partial results Tuesday night, the charter had 69% support, a slightly smaller contingent than the 77% of city voters who overwhelmingly approved creating a nine-person commission to study home rule in May 2023. With Tuesday's decision, Lancaster joins 23 other Pennsylvania cities, including Reading and Altoona, under home rule.
City Council, the mayor's office and most city departments will not change, but the city can now lift state-mandated caps on existing taxes. The charter, to be enacted in 2025, also increases requirements for public transparency. Mayor Danene Sorace called Tuesday a "historic moment" for the city but acknowledged the lengthy process it took to get to this point.
"While people would consider this a victory, and I do, it is also extremely frustrating that our Legislature doesn't give more options to governments (to raise revenue)," Sorace said.
Sorace launched the home rule process nearly two years ago, arguing the city needed a new way to generate revenue. For years, the city has been limited to raising property taxes, but officials can now rely on other taxes, namely the earned income tax.
Last summer, an elected commission began an 18-month process to research home rule and write a new charter to govern the city. They said city staff and elected officials raised concerns about maintaining the current level of services with the existing revenue structure, prompting their push to change the city government.
"I think this just shows the result of the quality of the work of the commission," commission Chair Brian Adams said.
Many home rule supporters have pointed to new revenue streams as the biggest gain for the city under home rule. Democratic elected officials and party leaders were the leading voices calling for a "yes" vote.
Opponents of the charter argued it would give city officials too much taxing power. Some, too, say the commission's decision not to support district-based council seats made people skeptical the charter would work for them, not just elected officials. In particular, residents in the city's southeast quadrant, who have criticized city government for being exclusionary, were especially hopeful for district seats.
Kevin Ressler, a southeast resident and former CEO of the United Way of Lancaster County, said the charter highlights his neighborhood's concerns that their voices aren't heard as major decisions are made.
"It rings a bell of no taxation without representation," Ressler said.
Read the full charter at lanc.news/HomeRuleCharter. Here are key changes to expect in 2025:
New revenue tools
The city will now start leaning on the earned income tax as its primary taxing source instead of property taxes. Sorace has proposed a .3% or .5% income tax increase under a home rule charter, which would generate up to $4.8 million. She will roll out an official budget presentation Nov. 14.
The benefit of income taxes, Sorace said, is that high income earners will ultimately pay more. Income tax revenue also grows naturally over time without raising the rate as a result of inflation and wage growth.
The average city resident makes roughly $60,000 a year, and a .5% earned income tax increase would cost a person making that salary about $300 more per year.
City Council still needs to adopt a budget before any tax increases become official. A property tax increase is not on the table under home rule.
The city can't create new taxes under home rule, though it also can't place new caps on taxes. Home rule will instead limit tax revenue growth to 6% annually.
Greater oversight
Early budget presentations will become standard under home rule, as the mayor is now required to introduce the official financial plan in October, rather than November. That gives residents and council members more time to offer feedback and criticism.
The mayor also will introduce an annual capital spending plan each summer to keep residents in the loop about major projects on the horizon.
A seven-person ethics commission also will be established to educate and oversee elected officials and city staff. Residents will be able to submit complaints and concerns to the commission for review.
