Commonwealth Court Judge Bonnie Brigance Leadbetter ruled in favor of Harrisburg receiver William Lynch on Monday, ordering the city to raise its earned income tax.
In an early evening ruling, the judge said the Harrisburg City Council must temporarily raise the city's EIT by 1 percent on city residents.
"We hope this will lead to some real cooperation with (the) City Council as we go forward," Lynch said in a statement.
The increase would be for one year, and petitions may be sought for future years, the judge said.
The tax hike would have generated a projected $1.7 million more in city revenue this year had it been implemented by July 1, according to the state. The projection pegged next year's EIT total at more than $5.1 million and nearly $6.9 million each year from 2014 to 2016.
The council has 15 days to approve the increase to 2 percent. If it fails to do so, councilors could be held in contempt of court.
"The court's power to direct the enactment of the tax increase or mandate a budget increase by way of a writ of mandamus against council constitutes a degree of intrusion upon the fiscal power relegated to the legislative branch under basic separation of powers principles and implicates the political question doctrine," the order reads. "However, such intrusion is appropriate under compelling circumstances or where the action or failure to act imperils another branch's ability to function."
Leadbetter said the council has "failed to act to alleviate an emergent fiscal threat to the health, safety and welfare of the citizens and threatened the ability of the city government to function."
The tax increase was part of the court-approved recovery plan, but was not implemented by the council, despite Lynch's insistence. The city school district would continue to receive 0.5 percent, and the city's share would increase to 1.5 percent from 0.5 percent.
The council has favored a commuter tax, which would be levied against people who work in Harrisburg but live outside the city. The tax would still mean higher income taxes for city residents, while adding a nonresident tax.
Neil Grover, an attorney for the council, said he has not discussed legal options yet with his clients. That conversation is expected to take place before or after tonight's legislative session.
Grover, who was still reviewing the judge's order this morning, said he does not expect the council to take a vote on the increase tonight.
In a second piece of the order, the judge said the council is not required to fund the $75,500 position of communications director, which has been held by Robert Philbin.
Cory Angell, a Lynch spokesman, said the office believes the court has the best interests of Harrisburg in mind and realizes the severity of the financial situation in the city.
"Although not everything in the original recovery plan will be implemented, this is a step in helping to reduce the operating deficit that is crucial in providing essential services," he said.