Great Expectations

Without question the City must continue, and accelerate, the move towards greater tax parity with the suburbs and other large cities. Reductions in city services is a legitimate concern, but this more reflects the unwillingness to do things differently than any underlying fiscal restraint. Privatizing select services, pooling employee health benefits, and switching to 401(k) retirement benefits could all more than make up for steeper tax cuts.

Similarly, the property tax abatements more than anything reflect the City's unwillingness to confront the self-serving agendas of the building trades unions. Hey, let's not take on the real problem (artificially inflated construction rates), just offer a tax abatement to balance things out. Please. If I want to build in my city, can anyone give me a legitimate reason why I shouldn't hire whomever I want to do so? Especially since it's obvious most union members don't even live in the City.

Great expectations aside, everyone knows what really has to be done to move the City forward. We're not stupid after all. The real challenge is fighting the tough battles against entrenched interests. Here's one Philadelphian who will strongly back Nutter in doing so.

Cutting the BPT and Wage Taxes should be a priority. I have recently left my job and am in the process of launching my own company. The business plan calls for anywhere from 25 to 35 people the first year, with an average salary of $80,000. Why should I put my company inside city borders?

Philadelphia is my desired location, but I am extremely hesitant given the significant tax burden. The planned tax reductions, and the election of Michael Nutter, have very much put the city in play as the location for my new, global firm. However, it is by no means a certainty. I'll probably have to choose a temporary location in the next month or so, then get a permanent location sometime around March.

I am looking for Michael Nutter to not only reaffirm the current tax cut plans (which he has), but to also announce a new, bold inititative that will make Philadelphia a truly competitive location. Otherwise, I will simply have to get comfortable with words like "Radnor".

Too many people in Philly associate "cutting taxes" with giving the rich a free ride. Philly needs more jobs and high taxes are an impediment to job creation. It is very important that Philly stays competitive and attracts as many business as possible. I think the wage tax is minor compared to the business taxes. I think most Phildelphians forget about the wage tax after a while and thus it may be more critical to reduce other tax burdens even if that means ending the reductions in the wage tax.

The 10 year abatement was a great idea and it needs to be modified. More has to be done to encourage renovations and new construction outside of the Fairmount Ave to Washington Ave corridor. Nutter's idea to shorten the abatement in CC and expand it in other places makes sense to me. All the people who complain about it fail to realize that the abatement has helped replace blighted lots or homes with new homes filled with middle class or upper class taxpayers. That is a good thing. To end the abatement would be foolish. If anything a similar strategy should be used for new companies that form within the city limits. Why not offer a 10 year abatement on the BPT to any new firm in the City? Why not offer a 5 year abatement to any firm that relocated to the City? These are simple, common sense incentives that would work.

We have to be competitive with the surrounding counties on business taxes. That's it, end of story, if you want jobs in the city. Business creates jobs at an exponentially higher rate than government.

The only reason people attending the forum didn't comprehend this is that the people who do have a basic business and economics literacy are not always able to get to these forums!

The Ink has gotten better, but seems to still have a blind spot on basic business and science literacy, and the populace that relies on the Ink for info reflects that.

Ok, let me give an example in today's paper:

Mon, Nov. 26, 2007

"Nuclear foes scarce in Salem County"

By Geoff Mulvihill, AP

"ELSINBORO, N.J. - The columns of white smoke visible when you look downriver are a constant reminder that one of the nation's biggest nuclear power plants is just a few miles away from this rural town in South Jersey."

Editors should never have let that lapse in basic science and economic literacy slide.

That's not smoke. That's steam. Only steam. Nuclear reactors don't produce any kind of smoke. They dont' even have smokestacks.

It's really deplorable that forums are chock full of people whose education, because the paper is where it's at, has effectively stopped.

How can you be mayor of a city where people just want to keep repeating the same canards, the same mistakes, over and over, no matter how badly bludgeoned they get?

Satullo's piece above is a good treatment of the subject locally. Tax cuts will work (where taxes are higher than surrounding competing zones or areas).

Tax cuts are not the province of one party or ideology. Where democrats have used them, those democrats rose to national prominence for visionary economic and social revitalization in areas that were written off. Think Clinton as governor of Arkansas.

Satullo is right that we are not taxing 19th century fat cat robber barons, but the small businesses that create most jobs in the US, and we are sending them right across City Line Avenue in a visible exodus.

We've gone too far, in other words. Moderation in all things means that we have to mimic the surrounding areas that have no BPT, and no wage tax if we are ever going to be on an equal playing field.

Not only do we have to continue to decrease the BPT and wage tax -- we have to abolish them to compete with the surrounding counties that house one of the world's premiere economic powerhouses, with the city in the center like an empty donut hole.

The answer is that socialists have to stop demonizing capital. Everything the local socialists (government must pay for us cradle to grave) call for is provided by private capital.

Jobs. Opportunity. Growth. Health insurance. Development. Building on formerly vacant lots, fixing up empty shells, and doing so in such an appealing way that people fight to buy them and pay the property taxes on those houses that funds decent schools.

Socialists who want a European style or British style socialism have to realize that this is never going to be how the US does things. If our competitors, the surrounding metropolitan area, won't create a BPT or wage tax, we have to get rid of ours to compete with them.

Realize that the EU and Great Britain are revising their socialism to a more market based, market comprehending methodology, and the Euro tells the story of how effective that has been.

Philly residents have always relied on the kindness of big Dems in the federal government to pay for jobs, housing, health care. But even the most likely to win next time are not going to have the luxury to do a HOPE giveaway, funding millions to a housing authority for everyone who is on the wait list.

The Dems who win the presidency are centrists. Clinton signed Welfare reform. Few of the audience members at these forums, even if they received or still get TANF even realize this.

It will be the private capital economy that does most of the work, with its incentives created, and its healthy competition, the reasons the government version failed in many ways. (Scattered site PHA housing, anyone?)

The RDA has to sell its huge inventory of properties so the private market can use them. SO does the city, which has thousands of properties that are just vacant, unused sources of blight.

Street's NTI failed because it depends wholly on government and ignores that the private market will build these lots and shells with new, better than code buildings that provide safe, comfortable housing.

But the city has to stop being a government funded real estate holding company. It is decimating the property tax base that pays for schools. The city doesn't pay itself property taxes, and the property taxes that the city could get if the blight held by the city were gone would increase real time revenue now.

Schools need a privately capitalized market.

Property taxes which schools depend on in turn depend on a robust private market of private property. PHA doesn't pay property taxes for schools and infrastructure. Neither does the RDA, nor the city.

We have to prioritize selling this property openly, competitively, and USING the money to fund the mandates of the organizations holding this property.

The taxes lost from abolishing the BPT and wage taxes can easily be compensated, and schools funded at the level of our competing neighbors so that kids can enter a modern workforce as productive adults.

All of the health of Philly citizens depends on realizing that the system in place depends upon a private market, and the state and feds are not going to fund our schools when we can do it ourselves provided we start using the same tax system everyone else does.

Collect fair property taxes in full, on time, no exceptions, no nepotism, no political "favors." Abolish the wage and BPT using casino and property tax revenue to compensate.

There is no other way to have real schools you want to send your kids to and neighborhoods you want to live in.

We can't afford to have 20%, 1/5th of all residents:

1. Not paying a wage tax because they don't earn wages,

2. Not paying property taxes on property they own to market values,

3. Not paying a BPT because they don't have a business,

4. Living in housing that has a landlord that pays no property taxes, such as PHA, certain Section 8/Housing Choice Voucher apartments.

That means that tens of thousands of properties are not contributing to the tax base at all.

That means no money for roads, bridges, libraries, schools, trees, police, safety, after school or after curfew programs.

We have to start thinking outside the box and making every citizen contribute to the cost of their own footprint in a way that is fair and also builds citizenship and responsibility.

Street tried to be "nice," Sylvester Johnson tried to be "nice," but when you have two sets of rules you end up with a completely bifurcated society of those who do for themselves and those who don't have to, so they watch Maurie for the answers to their own lives.

"You ARE the father" of this mess. Let's not just keep doing the same old.

Philly can't keep letting out anyone convicted of murder who is obviously not a good candidate for being on parole. This guy below killed someone in 1988, got out (early -- thanks early releasers like Rendell) and what'd he do?

Of course, he found some vulnerable woman, moved in, demanded money, didn't get it, and violently ended her life. He also tried to end the life of the son who defended his mother.

This guy is still loose, too. How does it feel to have a city that is owed $500 million in overdue taxes, but no politician who is smart enough or fair enough to collect it to pay for adequate prison/parole/probation capacity? By getting rid of wage taxes and the BPT you'll have more property owners living here (the commute is too terrible). These people will pay property taxes in line with the rest of the region.

We don't have to "protect" every owner who won't pay their fair share that forces us to have to let out every bugged out killer. People have to get used to paying property taxes for schools and safety, and not just driving out jobs with stupid taxes on those who do work or create jobs and build a business.

What galls me is that this killer thinks someone has to give him money. Where does this entitled mindset come from? Entitlements?

"Murder suspect sought -- According to police, an argument over money prompted the deadly stabbing of a woman, while her teenage son was sliced across the chest."

By Lorraine Gennaro South Philly Review
November 22, 2007

"A convicted felon on parole allegedly stabbed his girlfriend to death and cut her teenage son inside the home the three shared on the 2000 block of Mercy Street, police said.

Jerome Finch, 44, was on parole after serving almost 20 years for a March 15, 1988, homicide in the 17th District, according to court records.

The victim in Saturday’s attack, Deidra Burkett, 42, was stabbed several times in the chest and pronounced dead by a medic at the scene at 11:25 p.m., about 10 minutes after police arrived at the home.

“The motive was money,” Homicide Sgt. Bill Gallagher told the Review, adding Finch had asked Burkett for cash — for what and how much, police don’t know — and then slayed her in an ensuing argument. Investigators did not recover the blade.

The victim’s 15-year-old son was slashed across the chest when he tried to intervene; he was treated and released from Children’s Hospital of Philadelphia.

Monday, the sergeant believed Finch was probably still in South Philly. In addition to murder and related offenses for Burkett’s death, an attempted murder charge and related offenses will be tacked on for the son, Gallagher said.

To report information, call the Homicide Division at 215-686-3334/5."

I cringe with regret everytime I read one of these:

"FDA approves Immunicon’s test kit for colorectal cancer"

By Linda Loyd INQUIRER STAFF WRITER

"Immunicon Corp., Huntingdon Valley, said today its cancer test kit received Food and Drug Administration approval to monitor patients with metastatic colorectal cancer. The CellSearch Circulating Tumor Cell Kit is already approved for monitoring breast cancer.

The test kit, designed to allow earlier disease detection and more accurate monitoring of patients with cancer that has spread, is marketed by Veridex L.L.C., a Johnson & Johnson company in Warren, N.J.

The test uses a blood sample to identify and enumerate tumor cells in the blood.

Shares of Immunicon, a cancer research and diagnostic technology developer, were up 4 cents, or 3.95 percent, to $1 on the Nasdaq."

Here's a business that could very well be in Philly, but isn't. It's an offshoot of J&J, and those tech transfer businesses usually originate around the top universities' research.

How much do you want to bet that UPenn has a hand in this company? Yet how much do you want to be that they are too smart to try to start up a high tech business in a city with a wage tax and a BPT?

Forget "decreasing" or "continuing to cut" the wage and BPT.

Every day that goes by with this anti-good job taxation makes it impossible for me to continue to interview for the best jobs in one of the nation's largest cities, surrounded by a high tech health care industry.

The only time it's smart to live in the city is while you are in school. No one wants to try to have any reason to hold their new business back by not being able to attract the best talent. The best talent is not going to cut their pay by 3-4%. That's not chump change.

If the wage tax was 1% it would still be too much. Just having an accountant hear that your business is in the city will cause him to estimate the work for your business filings at a higher rate.

Everything, everything, about Philly from idiots who answer the phones at the agencies tasked with taxation to the fools on Council who can't figure out why King of Prussia now has all of Philly's pharmaceutical businesses when all those peoplke used to be here, everything, is running Philly down.

Nutter is going to have to go against the idiot grain, apparently.

Every time I go to one of the community meetings where jobs come up, some trapped in the resins of time folks jump up and want "factories again, so we can't change an 'industrial zoning' to 'commercial' zoning." Or, they want more port jobs.

What kind of simple folk live here, I wonder? The jobs where growth is nationally as well as here are in services and health care. From active living/assisted living centers with onsite care, to nursing/rehab, to tourism, to pharmaceuticals, to the new phases of health care, Philly has to allow these businesses who want to be here to come.

Nutter must have a head of Economic Development that really has business experience, and credibility in the business community.

Right now, Street's economic development is nepotism, cronyism, and tax, tax, tax, borrow, borrow, borrow, and spend, spend, spend for any idea that doesn't involve measurables or benchmarks.

Every time I go to one of the community meetings where jobs come up, some trapped in the resins of time folks jump up and want "factories again, so we can't change an 'industrial zoning' to 'commercial' zoning." Or, they want more port jobs.

What kind of simple folk live here, I wonder? The jobs where growth is nationally as well as here are in services and health care. From active living/assisted living centers with onsite care, to nursing/rehab, to tourism, to pharmaceuticals, to the new phases of health care, Philly has to allow these businesses who want to be here to come.

Nutter must have a head of Economic Development that really has business experience, and credibility in the business community.

Right now, Street's economic development is nepotism, cronyism, and tax, tax, tax, borrow, borrow, borrow, and spend, spend, spend for any idea that doesn't involve measurables or benchmarks.

The Great Expectations project encourages Michael Nutter to get tough with the non-uniform city unions during contract talks this year on the issue of health care as a way to hold down labor costs. (To keep vital tax-cut vows, cut labor costs, November 26, 2007) Somehow, Great Expectations seems to blame the unions when it asserts that “Benefit costs are up 64% during the last five years, five times the inflation rate.”
Nowhere within these seven short paragraphs does it mention that since 2000, employment-based health insurance premiums have increased 87 percent. Nor is there any discussion about why prescription drug costs continue to climb precipitously when this industry is already flush with profits.
Wouldn’t it further the city’s interest for the next mayor (and other mayors) to hold no-nonsense negotiations with insurers and pharmaceutical companies over health care costs rather then jeopardizing the health of those workers who provide the city with clean water, trash removal, and other vital services.

This process is a farce if you feel free to completely override the majority opinion of participants because you believe you're smarter than everyone else. Tax cutting has not only proven a false prophet of growth at the federal level but at city and state levels of government as well. At best the tactic is controversial. Who is the "we" that feels empowered to override other intelligent opinion on this issue?

Outrageous.

Stan - There's nothing secret about Great Expectations. Having attended G.E. events, you know darn well yourself who is leading the project. And this Web site is an exercise in transparency. We show the work that led up the answers, not just the answers.

We don't do polls; we do dialogues. I couldn't tell you whether anti-tax-cut sentiment is a majority or a minority. It's a significant theme, though, pushed tirelessly and eloquently by people such as yourself. So we acknowledged it, even as we endorsed the other viewpoint.

As you can tell from the other comments here, not everyone agrees with you. When opinion is divided, the writer of an agenda such as this has to make a call based on what evidence and what analysis seem most persuasive. That is what we've done. Just look at what's happened in the city, and to city revenues, over the last five years. It's a pretty strong case.

But the responsibility incurred when you undertake civic engagement is to also report, respect and credit the reasonableness of the opposing citizen views, and to try to explain carefully why you don't feel they should carry the day.

That is what we're trying to do right here on this blog, and in the issue pieces you can find on the project Web site. Why don't you wait to see how the discussion goes before passing judgment?

-- Chris Satullo

I don't actually think what you're doing is transparent at all, Chris. You've put together what you call a "Citizens" Agenda, but some Citizens are clearly more equal than others. I don't see anywhere on your website where that's explained in a clear way at all, nor how it was determined who gets to be a member of the elite deciding class. If it is explained after the final version of the Agenda is produced, then I'll be happy to recant. However I expect that the confusion, one which will lead most readers to believe that what you've produced is some kind of consensus document, will be entirely unrelieved.

Phila does need to reform its tax structure...but you know what city has even higher taxes? New York - yet NY doesn't seem to have an issue attracting new businesses.

Taxes are not the only issue. Knowledge and creative workers will want to be in a lively walkable city with clean streets, good services, and a thriving arts and culture sector, as well as decent schools for their kids, access to power centers like NY and DC, and the freedom from the punishing commute that is the norm in other cities. These businesses can pay their workers to compensate for the wage tax.

Businesses like manufacturing are more affected by taxes, as they have to make their product as cheaply as possible to be competititve. The high-skilled jobs are not going to hire people without a college education, but they will persuade our college students to stay here and start forming a real tax base...which in turn can improve our schools and offer a better future for all the children of the city. The "coated in resin" folks need to wake up and realize that good jobs for people without college educations are a thing of the past, and stop holding the city back.

Wanted to underscore this recommendation:

Public budgeting:
Invite meaningful, timely taxpayer input on budget priorities and trade-offs. Work with civic groups such as the Economy League to create plain-English budget documents that connect dollar figures to real-life outcomes. Nationally, innovations such as online budget games and “Budgeting for Outcomes” hearings abound; try some of them.

Its a great idea - more people need to understand and show interest in the city budget and also understand how budget decisions impact their lives and their children.

In addition, as I have noted in other spots, two essential questions should be asked before every budget decisions (1) What is the impact of this decision on children and (2) How will this decision impact the city poverty rate?

This kind of "impact assessment" is done in other places and some would add a 3rd question, "What is the impact of this decision on the environment?"

With these kinds of assessment tools in place, decisions can be made that are not only expedient for the present but bode well for the future health, well-being and prosperity of the city. Without tools like these, politics, trendiness, expediency and pandering are all too common.

In all my decades of community involvement, from the Philadelphia Council of Neighborhood Organizations in the 70's to the present, I have never heard citizens express a vision for Philadelphia like Chris Satullo’s in Monday’s Inquirer (“To keep vital tax-cut vows, cut labor costs”): no taxes on business, cuts in wages and benefits for one of Philadelphia’s largest employers and limiting city services. Sounds more like Dicken’s England, pre-New Deal America or the Voodoo economics of Reagan and his Republican successors.
If Great Expectations honestly reflected community activists’ sentiments we would be talking about how to achieve progressive taxation so those who are making the big bucks pay their fair share and government’s mission is to promote the common good: assuring decent living conditions, good education, health care and a living wage. Jobs need to be created by investing in rebuilding our cities, creating green cities, expanding public transportation, child care, building affordable housing, etc. not in the discredited notion of trickle down economics as the engine for job creation.
Contracting out city services? means workers don’t earn enough to support their families and aren’t accountable. I don’t want to follow the example of contracting out the military to Blackwater. At the citizen forums I attended, noone said their goal was to destroy unions. A Citizens Agenda for Philadelphia’s Future needs to figure out how all working people can enjoy the benefits unions have fought so hard to win.
We need to build a vision that faithfully reflects citizen thinking and input in the Great Expectation process (not the prescription of the Chamber of Commerce) so that Philadelphia will become a great place to live for all its citizens.

Unfortunately, Mr. Satullo's commentary stated that the Bush tax cuts caused fiscal disaster, which is completely at odds with tax revenue figures provide by the Treasury Department. Time and time again, people like Mr. Satullo erroneously label tax cuts as "give-aways for the rich" and "disastrous," when the numbers provided by the Department of the Treasury prove differently.

Case in point: since the 2003 tax cuts, the top 1% of taxpayers (based on income) are now paying 35.7% of federal income taxes, which is up from 30.5% before the cuts. Would someone please tell me how anyone can interpret the cuts to benefit the rich when they are paying more of the total tax revenue AFTER the cuts?

European countries with long histories of high tax rates have, or are moving, toward lowering their taxes on both individuals and businesses. Ireland's success with such cuts is now well-known; it's an economic miracle that happened after tax rates were slashed. Sweden, Denmark, Germany, and France are among the other countries who have either reduced taxes or are considering doing so. They recognize the benefit of reducing taxes far outweighs leaving the status quo.

If Mr. Satullo meant to imply the tax cuts were responsible for increasing budget deficit, he should say that. Nonetheless, he would be incorrect. Tax revenues are vastly higher than they were BEFORE the tax cuts. The deficit (which as a percentage of the gross domestic product is the smallest it's been in 6 years) has grown, in real dollars, thanks to overspending. This was a Republican problem when that party controlled both chambers and the president allowed spending to rise. The Democrats are continuing this practice, regretably.

So don't blame the tax cuts. They have been proven time and time again to be quite effective in generating more, not less, revenue.

One item about the BPT has not yet been mentioned: in the first year of filing city taxes, a company actually pays TWO YEARS worth of taxes, having to double what is owed for the first year. In subsequent years, the prior year's payment is credited, so the company only really pays one year from then on out. However, having to pay two years worth of business taxes after the first year of operation is quite onerous. In addition to lowering the BPT, it would also help to remove that requirement--after all, we don't have to pay state or federal taxes two years at a time. Those levels of government seem to think it's fine to wait until the end of a fiscal year to determine what taxes are owed. Not the City of Philadelphia.