HARRISBURG -- The state Senate last night approved a major change in the way a $52-a-year municipal tax is collected, but people who work in Pittsburgh won't benefit from the new collection method until 2010.

The measure, Senate Bill 157, was approved by a vote of 47-3. It will allow the $52 annual levy to be paid in quarterly payments instead of having the entire amount taken out of a person's paycheck in early January, as has been the case for the past two years.

The change would take effect Jan. 1 for every town except Pittsburgh, which will adopt the new procedure in January 2010.

Pittsburgh was exempted for three years because the financially distressed city, whose budget is still being monitored by a state oversight panel, needs the entire amount as early in the year as possible, senators said. Without that exemption, Pittsburgh's budget would take a $6 million hit next year.

"We don't want that exemption for Pittsburgh to last forever, and that's why [it expires] after three years,'' said Erik Arneson, an aide to Senate Majority Leader David Brightbill, R-Lebanon.

The state House still must vote on the change. The levy is paid to a municipality by anyone who works in that town.

The tax used to be called the occupational privilege tax and was set at $10 per year. Two years ago it was increased to $52 a year and its name changed to "emergency municipal services'' tax.

That name led to confusion because it was called the EMS tax, and people mistakenly thought all the proceeds went to ambulance companies. The new bill changes the name to "local services tax.''

With the change, $1 a week will be deducted from a worker's paycheck. Their employer will send the money to the municipality at the end of each quarter.

Low-income wage earners have complained that it's hard on them to have the entire $52 taken out of their first paycheck of the year, as it has been done.

Workers who earn less than $12,000 a year will still have to pay the $52 tax, but at the end of each calendar year, they can apply to the city where they work to have $42 rebated to them, the amount over and above the original $10 tax.