Progressive forces won an important victory by building support for the preservation of essential services even if this requires a tax increase. This was a incredibly beautiful and wide ranging struggle with many people playing a role. And Mayor Nutter deserves credit for recognizing that the citizens of this city are willing to bear higher taxes temporarily in order to save services that are so important to us.
Now, however, we have to recognize that fight continues on three sides.
On one side, we want to make the tax increases as progressive as possible. Many of us have concerns about the regressivity of the sales taxes and the danger that the property tax increase will fall too heavily on the poor and working people if it goes into effect without the implementation of a homestead exemption and a broad based and fair revision of property assessments.
On a second side, there are members of council who don’t seem to be willing to raise taxes as much as the Mayor has recommended. The Mayor’s insistence that Council members give up some of their perks–such as cars and the DROP program—has made this more difficult.
And, on a third side, there is the potential for a huge conflict between the administration and the city’s workforce as the Mayor’s proposal not only leaves no room for wage increases and seeks health care givebacks. Given that the rising cost of health care is a largely a national issue on which, we hope, major progress will be made this year, it hardly seems fair to place the blame on our workers. And while major wage increases are impossible under these economic conditions, it is important to recognize that city workers are also our neighbors. They all live in Philadelphia and their wages support the businesses in our neighborhoods. If we undermine those wages, we undermine the economy of the city and tax revenues.
So we are in a difficult and complex situation. We have to fight with Mayor Nutter to insure that enough revenues are raised while also fighting against the Mayor in the hopes of making the tax increases more progressive and in providing enough revenues to relieve some of the pressure on the unions.
I’m not yet sure exactly how we should balance these conflicting demands. I hope that progressives with expertise in city budget matters will be meeting this week to discuss them.
Right now, I just want to suggest that we can find a way to bring these two concerns together.
For example, if we replaced some of the sales and property tax increases with a temporary roll back of some of the wage tax cuts created by casino revenues, we will make a tax increase more palatable to citizens and council members. Similarly, a homestead exemption and assessment revaluation may make the property tax increases more acceptable to both council and citizens.
I also think we should think carefully about the sales tax. Like the wage tax, and unlike property taxes, it tends not to raise a lot of hackles because it is paid in very small increments over time. From our point of view, that’s a good thing. And while sales taxes tend to be regressive in taking a larger proportion of income from people with low than high incomes, our sales tax is better than most in that it does not tax food, clothing, and medicine. I’d like to see the numbers on the impact of these exclusions before I conclude that a sales tax increase is unpalatable.
What is most critical, however, is that the coalition for essential services develop a strategy moving forward that keeps us united. Like the library coalition, the CES is a major new force in the politics of our city, one that can play a long term role in making Philadelphia a better place to live for all of us.
This might work if…
First, can exempt 500,000 of gross receipts under the uniformity clause? When we talked about this idea a few years ago,we could not find an argument for the exemption under the uniformity clause that we thought would pass muster with the PA Supreme Court.
Second, supposing we have that argument, we need to get it to the Mayor. I don’t think Michael Nutter is a right wing ideologue. But I also don’t think he is a policy wonk either. In my experience he, like most politicians, tends to push conventional ideas that fit his goals and does not like to go out on a limb pushing new ideas that raise doubts just because they are new. And right now, he doesn’t have many ideas about economic development beside cutting taxes.
If someone can come up with a good legal argument that meets the first problem, I think I know a political strategy that can meet the second one.
(This is a response to other posts on the topic at YPP)
Some powerful political interests will oppose it–parking lot owners and others who are sitting on valuable land rather than developing it.
But the arguments for land value taxation have been pretty powerful since Henry George first made them. And know we have the data to back them up.
Again, however, we have the problem I pointed to in my response to Stan, we have to get someone in this city to be willing to advance the argument on taxation beyond how high and how low and focus instead on what and how we tax. When I ran for Council in 2007 I argued that the first thing our tax policy had to be was smarter. But it is very difficult to move new ideas in the political class. No one likes to go out on a limb.
I oppose casinos but what’s good for the goose…
If the rest of the state is getting money from casinos, why should Philadelphia turn it down? It’s not like we are rolling in state aid..or even that the state is paying the expenses for our courts that it is legally and morally obligated to pay.
I’ve studied political philosophy professionally for thirty years and I can’t think of any system of morality that would conclude that it is morally wrong to accept a city service paid for by gambling money. Given that money is fungible, your claim would mean that it is immoral to take ANY public service.
On the other hand, I’d might agree if you said it is immoral to work in the gambling industry or the tobacco industry.
But I’d have to keep in mind that the small hotel in the Catskills owned by my family had a couple of slot machines in the thirties. And there are rumors that my mother’s distant cousins by marriage ran the gang that provided them–and warned them before the state police arrived.