There's been a surprising development in Harrisburg. It appears as though reform, with an eye toward efficiency and common sense, might actually be possible in Pennsylvania.

The issue advancing through the General Assembly involves tax collection, specifically the earned-income tax now being collected by 560 tax collectors across the state. The new plan, which is part of legislation that passed the Senate last month and the House this week, would create a system of just 69 tax collectors to handle the earned-income tax — one each for 65 counties and four in Allegheny County. No change will occur in Philadelphia, where tax collection already is centralized.

The new plan calls for the appointment of a new tax collector for each of the new, county-based tax-collection districts. But that is one part of the plan worth questioning. Why not just have the treasurer's office in each county set up to collect the tax, rather than appointing a new tax collector?

The idea of centralized tax collection makes so much sense it is surprising that the system wasn't changed decades ago, as it was in most other states. But this is Pennsylvania, where "that's the way we've always done it"is practically the state motto.

Voicing its support for the tax-collection-reform plan, one state newspaper editorial argued that Pennsylvania has had too much bureaucracy and too many layers of government for too long, noting, "In 2008, we live as though it were 1908. Times have changed. Pennsylvania's antiquated system hasn't."

The inefficiency and headaches caused for business was illustrated by the fact that Sheetz convenience stores, which operate in 52 Pennsylvania counties, has to deal with 270 separate tax collectors when proc-essing the earned-income tax data for its employees.

Beyond the inefficiency of the current system and the burden it places on business, there is the issue of "leakage,"which is the term used to describe the amount of money not collected due to a variety of problems related to fragmented collection.

In the case of the earned-income tax, the annual amount owed is about $2 billion, and the leakage — or uncollected amount — has been estimated at $237 million. That's a lot of money not getting to municipalities or school districts across the state, most of which are operating under very tight budget constraints. Now more than ever, they should be collecting every tax dollar owed them — and centralized tax collection would help move things in that direction.

The Pennsylvania Chamber of Business and Industry supports the change to a centralized, county-based tax-collection system. The state Department of Community and Economic Development also supports the plan.

Naturally, tax collectors groups oppose the plan. But despite that opposition, which in the past has prevented common-sense changes to the state's antiquated and fragmented tax-collection system, reform efforts this time appear to be on the verge of becoming a reality.

With passage by the House and Senate, the plan to centralize collection of the earned-income tax appears to be headed for the desk of Gov.Ed Rendell, who supports the proposal and says he will sign it into law.

If that happens, the new law would take effect in 2012.

Streamlining the collection of the earned-income tax is a step in the right direction. But the big money, where no doubt vastly more leakage occurs, is with collection of real estate taxes.

Perhaps the current success of the Local Tax Enabling Act, sponsored by state Rep. Jane Earll, R-Erie, will embolden the legislature to next tackle the inefficiencies inherent in the collection of real estate taxes by 560 tax collectors across the state. Reforming that system would benefit school districts that are highly dependent on real estate taxes and would see their budgets enhanced by a more efficient, less-costly tax-collection system.

For now, though, it's worth celebrating the apparent success of the first small step in reforming the tax-collection system in Pennsylvania.