Is Phil Goldsmith right or wrong? (The Next Mayor)

There's been a flurry of activity relating to ballot position drawings and candidacy challenges and while I like that stuff as much as the next political junkie, I'd be remiss if I didn't bring up this column by the former managing director and current rabble-rouser, Phil Goldsmith.

In it, he takes issue with the strategy of gradual tax reductions that have been going on since the Rendell era. I'll let some of his words do the talking:

It's time to ask if Philadelphia's middle-class residents are being taken for a ride by the city's long-term tax-reduction strategy, which has provided them with little in return financially but threatens to undercut the city's ability to provide services critical to their quality of life.

Or, to refer to the song from "The Music Man," isn't it time to talk about the pool table in our community?

Since 2000, Philadelphia has forgone more than $1.2 billion in tax revenues. And between now and the end of the five-year plan in 2012, it will forgo another $1.9 billion.

On an annual basis, that means the city will be collecting about $300 million less per year in tax revenues than it otherwise would have.

That's about the combined annual budgets of the Streets Department, Recreation Department, the district attorney's office, Fairmount Park, Licenses and Inspections and the Free Library of Philadelphia.

Now, we can chat about the revenue side of the city budget equation if you want, but I'm equally interested in the expenses side of the equation, which Goldsmith refers to here:

While you can always do more with less, rigid civil-service and city-charter rules and strict union provisions hinder the type of flexibility needed now.

And, so far, there has been little discussion by the candidates on how they would eliminate these structural impediments.

This is where I miss the short-lived candidacy of Jonathan Saidel. Remember him? He's the guy whose spokesperson took me to task for my review of his one and only policy paper. During my exchange with Mr. Fee he let on that Saidel had been in conversation with the heads of the city worker unions to figure out a way to deal with these healthcare and pension costs. I was anxious to hear what the result of those conversations would be since it's becoming clear that those going to be the two most important issues faced by the next mayor.

More important that murders? More important than good schools?

Yes. If only because if these long-term budgetary issues are not addressed quickly, there won't be any money for the cops, the schools, the asphalt for the potholes, the planning department, the rec centers, the park, probation officers, health inspectors, code enforcers, new trash trucks, tree planting or any of a number of things that we've come to expect or want from the city.

Is raising taxes, or at the very least, keeping tax rates at their current levels, an option? Mr. Goldsmith raises a good point. Philadelphia Forward and others have the other side. The candidates (and John Dougherty and Jonathan Saidel) have spoken on at least one tax.

What do you think?

Oh and to see another good debate going on about this, check out this post started this morning by Dan U-A over at YPP.

Comments (1)

Dave

I don't have the answer, but here are some thoughts:

1) The city's tax revenue has increased, even as the tax rate has decreased, largely because more people with higher incomes are moving to and staying in the city. I'm pretty sure these people (with the higher incomes) tend to pay more attention to tax rates than people with lower incomes.

2) I firmly believe that a pretty significant sum of money can be saved in the city budget. Redundant and/or useless social services organizations is probably a good place to start. Funding should probably be cut for a large number of small non-profits that are pretty much run by councilpeople's friends and supporters, and increased for organizations that are actually making a difference (the result could well be a significant reduction in the city's budget for social services and, in the longer term, a more healthy city).

3) I think reducing the BPT would be easier and possibly provide better results than reducing the wage tax. It's frustrating that city hall has been so loath to reduce business taxes, even though they only account for something like 9% of the city's general fund budget (much less if you count federal and state aid not included in the general fund).

Those are some of my non-expert thoughts on the subject.

Posted by Dave | March 14, 2007 5:43 PM

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