Michael Nutter has published his plan for how he'd deal with the city budget, called "An Honest Budget Now."
It's part his philosophy for how to manage a city budget, part statement of priorities (developing affordable housing gets a shout out) and part swipes at the other candidates for failing to be specific about how they'd fund their plans. (The term "phantom revenue sources" is used.)
Here are a few highlights of the plan:
*Nutter says he'd continue wage tax cuts to get the tax to a rate of 3.25 percent for both residents and non-residents by 2015.
*He'd gradually reduce the deeply hated gross receipts portion of the business privilege tax over a five-to-seven year period. He says he'd also gradually reduce the net income portion of the BPT to the current rate of the wage tax, meaning businesses in Philadelphia would pay the same "income tax" as individuals.
*He wants the city to move toward full-value assessment of real estate -- as long as the millage rate then goes down. In real English, that means that we'd base tax bills on the actual value of homes -- but lower the tax rate so that the city wouldn't see a giant windfall. However, the move would certainly change bills for individual homeowners.
*He also supports a complete reassessment of city real estate, as long as "safeguards" are in place "that ensure no Philadelphian is forced to sell their home because of an increase in property taxes."
*He would modify the 10-year tax abatement (the tax break that people get for building or rehabbing new homes) to encourage development beyond Center City, especially of affordable housing. He'd also put 10 percent of the abatement's value into a trust fund dedicated to the provision of affordable housing throughout the city.
*He commits to establishing a Rainy Day Fund, a pool of money the city can draw on in hard times.
*He'd establish a formal debt issuance policy, to spell out what we borrow for -- and what we don't.
*He said he'd base his budgets on a realistic estimate of future revenues. (Thing is, right now we underestimate revenues -- which beats the reverse, but is not smart budgeting and can lead to easy funding of pet projects.)
*He pledges to "focus on outputs not inputs." (Which means, tie performance to spending, aka "outcome-based budgeting.")
*He'd direct city agencies to look for grants and other non-tax funding opportunities (A 2005 study identified nearly $500 million in potential grants that the city is not pursuing)
*And he'd create public participation in the city's budget process.
As to the actual crisis looming in the city budget -- the dramatic growth of pension and health care costs, and the drop in the general fund -- Nutter defers. He wants to "convene a Commission to devise and implement a fair and responsible solution to Philadelphia’s growing pension and benefits costs."
However, that's probably realistic -- I don't know that we can expect a candidate to walk in with an answer to a crisis that's devastating governments and corporations across America right now. The only thing is, that commission better get started -- quickly.
Comments (3)
It seems to me Michael Nutter is the only one with decent ideas about moving the city forward. Everyone else is running on charisma.
Posted by philly on the rise | April 17, 2007 3:55 PM
In other words, if we want more police, better schools, garbage off the streets, housing for all AND a growing economy with a competitive advantage due to lower taxes, we'd better elect Nutter.
No one else has a plan to pay for it all. (others have some ideas to do some things, but ultimately, they don't get the big picture)
Posted by Liz | April 17, 2007 4:05 PM
I recommend that folks read the actual document. I have no background in economics and at first I thought I’d pass on this, but to my surprise found Nutter’s plan clear and readable. So all you other English major types out here, this really is something we can get through.
I like Nutter’s point that the public needs to be more involved in the budget process. His plan contains a clear explanation of how the process works—helpful whether you agree with Nutter’s specific proposals or not.
Posted by karen | April 17, 2007 8:11 PM