Today Council voted 11 to 4 to delay the Cohen Working Families Wage Tax Rebate for three years. It was supposed to start in 2010 and is no delayed until 2013. Since the program ramps up gradually, final implementation will be in 2018.
Keynes said that, in the long run we are all dead. Certainly by the time we get to 2018, many of the working poor and middle class people alive today who could benefit from a reduction in their wage taxes will be dead. Whether the Tax Rebate program will ever go into effect is now an open question. Unless we build the political will and find the politicians to support the wage tax rebate, it is not unlikely that every there is a budget shortfall our politicians may well decide to turn to put off the wage tax rebate again.
After the vote, some Council members suggested that we can come back next year and try to move the date up again. We can, and if the circumstances are right, I hope we do so. But it only took 7 votes to stop the delay. So long as John Street is Mayor, it will take 12 votes move it up again.
There are some important lessons to be learned from thinking about the short term and long term reasons we lost today.
Why it Happened
We faced tqo basic problems. First, the Mayor outmaneuvered us and, second, the political system as currently structured gave him the ability to do it.
They Mayor has long wanted to stop the wage tax rebate program, whether because of some personal pique at losing to David Cohen or because he honestly believes that the city cannot afford the program over the long term.
(The Mayor has said to One Philadelphia that the city could afford either an across the board wage tax cut or a rebate program for low and middle income residents. He has not explained why some judicious combination of both is impossible, especially given that wage taxes are supposed to go down once we get revenues from gambling. And, his whole history on tax issues is to temporize and switch from one side to another, without ever trying to lead us to a new, rational tax system.)
How the Mayor Outmaneuvered Us: The Budget Deals
Earlier this year, the Mayor called for repeal of the wage tax rebate. A number of progressives rallied to stop the repeal and met with the Mayor to try to head him off. Some of us thought, at the time, that the Mayor was using the wage tax rebate as a political ploy to block further cuts in the BPT. Others, including me, thought that the Mayor was serious and did a little lobbying. We quickly found that there was no support for repeal and we stopped worrying about the issue.
We didn’t know a delay in the implementation of the program was on the table until after the deal with Council had been struck. Basically council leadership got the Mayor to support some of their priorities, hiring new police offices; keeping open three Fire Department engine and ladder companies; adding more money for emergency services; and adding funds for recreation and health centers. In return, Council agreed to provide $11 million for economic development, for marketing the city, and for Innovation Philadelphia, which is supposed to promote high-tech industry in the city and, along the way, provide some very well paid executive jobs, one of which was supposed to go to Street’s former politics advisor George Burrell. And the final element was that Council would delay the Cohen wage tax rebate for three years.
Our Mobilization
I sent an email to some Neighborhood Networks folks and Jonathon Stein of CLS the day after this deal was reported and we began organizing immediately. Neighborhood Networks had already voted to fight for the program so Stan Shapiro, Sherrie Cohen, and I could act on its behalf.
We quickly realized that the Administration had made a critical flaw. As I reported earlier, they had told Council members that a delay in the start of the wage tax rebate was necessary to balance the Five Year Plan—and get PICA’s approval for it—especially now that the new spending desired by Council members had been added. However, as we have argued, this claim was false. The Administration’s numbers were wrong by a factor of 5 and thus the Mayor had no case for insisting that Council members go along with the delay in the rebate program in order to justify new spending.
Why We Were Too Late
But, by the time we had heard about the proposed delay it was too late. If we had known in advance, we might have been able to provide Council members with the arguments they needed to fight off the Mayor’s demands. But no Council member or staff member realized how false the Administration’s claims were and they signed on to the deal.
Council members listened respectfully to us today and some of the—especially Nutter, Goode, and Kenny—pointedly made some of our arguments in questions directed to the administration. But the whole exercise was pointless. Their minds were made up. I knew we had four votes and thought that if we could get two more committments then the third one would come our way. But we couldn’t find the first two.
Immediately after the vote, two council members and one staff member came up to us and said that, after passing the budget last week, they couldn’t go back on the deal they had made with the Mayor. When we pointed that the Administration had, at best, made serious errors in their analysis and, at worst, had mislead them, Council members just shrugged. “That’s what the Mayor does,” said one. The staff member of another said, Councilwoman X believes that a deal is a deal and she can’t break her promise now.”
What Can We Learn from This
What we can learn from this episode is that the process of government in Philadelphia is flawed, both structurally, in terms of the vigilance of our Council members, and in terms of the presence of progressive members of Council.
The Process
I am not so much of an idealist to say that politics should always take place in the open or that deal making is always wrong. Sometimes politicians can only reach agreement by making a deal lets each side achieve its most important goals. And sometimes those deals can only be made in private.
The trouble comes, however, when there is no public scrutiny of the deal. And that takes time. If we had more time to analyze what Council leader and the Mayor had done before the budget was passed there would have been an opportunity for Council members to call the deal they had made into question and reopen negotiations. But in the end of the year rush, this was impossible.
Changing the Balance of Power and Being Vigilant
The second short term lesson is that our Council leadership has not been vigilant enough in challenging the Mayor. How could they let him pull yet another fiscal sleight of hand? Partly the problem is structural: the Mayor has too much authority over the budget and it is too easy for him to attack the priorities of individual Council members. But partly the failure is due to the unwillingness or inability of Council members to force the issue. Would it have really been impossible for an aggressive Council leader to say today that, we have to reopen the issue of the budget—and the deal we made with the Mayor on it—now that we know that the Mayor had mislead us?
We Need A Broader Perspective on Council
The most important lesson is that we don’t have enough Council members for whom the problems of the working poor are a top priority. I can certainly understand district Council members caring about their own district—they are sent to City Hall in part to care about recreation centers and health centers and ladder companies in their district. But those concerns can’t be their only ones. They also need to be concerned with—and aggressive in dealing with—the broader issues that affect people throughout the city. It is harder for a district council person to take credit for a wage tax rebate than a fire station. But it is not impossible if our Council people made a greater effort to focus on the good of the whole city. Michael Nutter showed today—as he has shown through his whole career—that a district council member can be advocate for broad public policies. And, perhaps because so many of her own constituents either would benefit form the wage tax rebate or support it, Donna Reed Miller showed that a council member who focuses on her own district can also see the connection between broad public policy issues and the folks she is supposed to represent.
We have at-large Council members precisely because they are supposed to care about the good of the whole city. So it was particularly disappointing that two of them—Juan Ramon and Blondell Reynolds-Brown—voted to delay the wage tax rebate. One political insider explained to me that they were scared of voting against the deal that was so important to district council members especially because some of the Council leaders, are also ward leaders whose support they need in the 2007. To their credit, Wilson Goode and Jim Kenny did what at-large members are supposed to do.
We Need More Progressives on Council
And that just brings us to the fundamental long term lesson. We need more progressives on Council who work with the broad progressive community. Imagine if David Cohen were still on Council. When he heard this deal coming down the pike, he would have alerted people outside Council. We would have been organized earlier and would have had a chance to stop this travesty.
Until we build a broad progressive political force in this city, one that holds Council members responsible for good government and social justice—we will have district and at-large Council members who focus more on their short term political needs than on the serving justice and the long term interests of the city. And we won’t have the vigilance we need when our progressive ideals are challenged.