Farnese calls out Council on why sales tax a hard sale

Courtesy of Philly Clout

“No one wants more than I do to help Philadelphia succeed as a world-class city – but right now, we all must tighten our belts and make sacrifices,” said Farnese.

Farnese noted that approval of the city's request will require backing of legislators from other parts of the state.

“City Council needs to take a hard look at whether continuing DROP for elected officials sends the right message in Harrisburg,” said Farnese. “In these tough economic times, eliminating DROP would demonstrate a commitment to government reform, and would go a long way toward fostering the public’s trust.”

Meanwhile there is that PICA report comparing across the board cuts under Plan A (if we can still get it) to a 10% increase in Council's budget. Courtesy of Heard in The Hall.

Most every department has made deep cuts: Commerce is down more than 35 percent, Records down 30 percent, the Mayor's Office down about 15 percent, and so on. Even most offices run by independently elected officials - such as the controller and the district attorney - are down between 8 and 10 percent.

And then there is City Council.

Despite one of the worst budget crises in recent history, despite the worst recession in decades, City Council is on track to increase spending from 2008 to 2010 by 10 percent, making it one of a handful of city spending obligations that would actually go up over that time.

And Rep. Mike O'Brien still does not seem to have a mental grasp on the legal limits of state gaming legislation (which you would think he would know by now as the state rep from Fishtown). He thinks the city can use new gaming revenue which won't come online for 2 years to close its severe budget gap now, even though a.) its not enough, b.) its too late, and c.) state gaming law prohibits the city from using it for anything other than wage tax relief till we hit that magic 2% trigger to allow wage tax boosts to eat the gaming revenue. In other words O'Brien likes yelling at Mayor Nutter for things only he as a state legislator can fix which would be a neat political trick if it didn't simultaneously make him look like a flaming idiot. Courtesy of Philly Clout again.

The city's share of state gaming revenue is currently earmarked for wage tax relief. Under state gaming law, the city could raise wage taxes if city tax collections have dropped by more than 2 percent. In May, city Finance Director Rob Dubow said that revenues had dropped by 1.94 percent, just shy of the necessary amount.

Also, the city cannot impose a new tax increase once the fiscal year has started. The current fiscal year began July 1, so a wage tax increase is off the table for now, anyway.

I'm going to go way out on a limb here and suggest that when and if firefighters and cops in his district start receiving pink slips that Rep. O'Brien might get a more reality based understanding of the difference between "I'm more pro-build the casinos dammit" posturing and bad policy decisions that effect real people's lives. Until then, keep bellowing, I guess.

BTW, if you actually are a city worker laid off

under Plan B or Plan C, you might want to send copies of your pink slips and thank you notes here, amongst other places.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Maybe - despite what Newsweek says - this recession hasn't yet

been wasted.

Council's continuing to rob the City through DROP's loophole when libraries, health centers, rec centers, and -- let's call it what it is -- public safety are all on the line is insanely selfish, crooked, and stupid.

Even by Philadelphia's standards.

Bully for Larry and everyone who calls on Council to do the right thing.

There's still time to be heroes, folks.

Just stop being crooks.

And now an op-ed in the Inky

http://www.philly.com/inquirer/opinion/20090809_Council_must_show_Harris...

The timing suggests that it is the Senator's opinion that the gesture might help the case for helping end Pileggi's blockade on a vote on the budget approvals the city needs. DROP legislation for electeds would grandfather in anyone already enrolled and its dubious anyone elected new in 2011 would not run specifically pledging to not take it so fairly it is the smallest although admittedly symbollically significant gesture to ask for from Council considering the "budget armageddon" the city now faces.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Evidence of a connection?

Wouldn't it be more convincing if one of the non-Philly state legislators holding the City hostage said that they cared about DROP?

I don't speak for the guy - at all

but I imagine as the State Senator of Philly's First District (and all that implies) and if I am not mistaken the only Philly State Senator on the Appropriations committee that his opinion on the matter is influenced by conversations with key colleagues in the State Senate.

If average Philadelphians gripe profusely about DROP and Council perks at the drop of the hat when you even mention the very real possibility of core city service being cut and police layoffs, how easy is it for Senators from suburban counties or deep in the "T" to grab onto the same thing. The reality is that Council's entire $17 million budget and eliminating DROP for everyone (not just electeds) not already enrolled tomorrow would be a small portion of the huge budget hole Philly faces without the sales tax approval. But its a small portion that packs a huge symbolic wallop. If Council wanted to prove whether or not DROP would matter in terms of severing the city's local budget approvals from the state fight, I suppose the best way to prove it would be to travel to Harrisburg and meet with members of the State Senate themselves. Lord knows the Mayor been making that trip a lot, lately.

There is a real question about why Council has largely not stepped up to the plate in terms of doing everything in its power to avoid the "doomsday budget". Merely taking the elevator down and stepping outside for the Mayor'r rally might have been a start, I suppose. I guess they didn't quite feel "invited" enough. Well Sen. Farnese's op-ed would seem to be an open invitation for action from the body Council most needs to worry convincing if the city is to avoid that "doomsday budget".
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Already strapped

The United States' economy is not good anywhere and additional sales tax is always going to be a hard sale. Especially since everyone is already strapped. online casino

Look, I own a struggling retail business

I'm a member of the local business association. Noone on it is half as worried about the sales tax increase as the disaster for police, health and public safety if it is not passed. And why would a local tax that does not effect a single person out of Philadelphia be a problem for someone from Altoona? That does not make even a lick of sense.

Yes all taxes are a tradeoff but part of the reason Council went with sales taxes was because it polled well with Pew. There is litte doubt that if it were a straight referendum - sales tax increase vs. laying of 700 cops, 200 firefighters, 3000 city workers in all, closing libraries, rec centers, health centers that the sales tax would pass easily in Philly.

The issue is with Council doing enough to convince the rest of the State Senate (HB850 already passed the state House with significant bipartisan support) that they are taking their share of lumps to get the approvals.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Leveraging this moment

I still don't see any evidence of this. Why all of a sudden would anyone think that the hostage situation is based on principles rather than politics? Where is the evidence that the Senate would pass HB850 if Council takes its share of lumps?

Indeed, all indications from the Senate are that they care about gaining leverage over the Philadelphia Delegation to negotiate the state budget. If we want to put pressure anywhere, it seems to me it is best placed on all Senators (including ours) to bridge the impasse. Every piece of evidence suggests that it is that impasse that is holding up Philly's sale tax.

One idea is to join with citizens in Republican leaning districts near Philly to call for a bi-partisan open forum with legislators of all stripes. All legislators should feel the heat and then they might be more likely to reach agreement.

I'm wondering whether both parties might be to blame for this crisis. If so, then both constituencies are also to blame. Do both constituencies elect legislators who are more focused on politics than on good public policy?

It would be interesting if we use this moment to make a public appeal for people of integrity, intelligence and good will to step up and become candidates in the next election cycle. Couldn't hurt. There's nothing like a contested election to motivate our politicians to do a better job -- which, in my book, means achieving results.

But they passed a bridge budget

Indeed, all indications from the Senate are that they care about gaining leverage over the Philadelphia Delegation to negotiate the state budget. If we want to put pressure anywhere, it seems to me it is best placed on all Senators (including ours) to bridge the impasse. Every piece of evidence suggests that it is that impasse that is holding up Philly's sale tax.

Without state worker's breathing down their necks, the state budget impasse could - no exageration - stretch to October. Meanwhile when the House voted on the Philly approvals separately it passed easily on bi-partisan support, breaking if anything on western PA anti-Philly vs. eastern PA lines rather than party lines.

And again if Pileggi and Farnese are both on the Appropriations Committee where the action is and Farnese is suggesting that the symbolism of DROP is something he thinks could help him get things unstuck, I 1.) want things unstuck, 2.) am not a fan of DROP for electeds myself and 3.) fail to see how taking Farnese's suggestion costs Council anything they should care about losing anyway, considering the dire circumstances.

Also speaking frankly, as a CFP supporter you might possibly be a little free and easy about state budget solutions popular with Senators of both parties outside of Philly for "non-tax revenue streams", considering past history.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Not sure I understand

I'm not sure I understand your final paragraph. Surely I am not advocating for the expansion of predatory gambling (in fact, I advocate against it). I don't perceive any inconsistencies in my position. I'm not making a substantive argument about how much of the solution is new taxes vs. program cuts, I am just seeing politics all around. To me, that means much of the blame falls on the electorate. I realize this is a larger point that speaks to government in general.

As to the bipartisan vote in the House, I'm guessing that, given that the House has a majority of Democrats, that it was somewhat easy for many of the Republicans to vote for the bill. Might as well try and appear bipartisan if the party leadership tells you that the bill will be bottled up in the Senate. I'm not sure the vote in the House on the City bill (or the failure to vote in the Senate) is based on policy, it's based on politics and leverage. That said, a vote is a vote and I agree that the vote was bipartisan.

You are right the problem in the Senate is partisan

Really the idea of municipalities having flexiblity to self-govern in times of crisis would conceivably be something conservatives would be all over, sort of "states rights" in miniature. But if you are working on undermining the bludgeon of partisan unity with borader arguments about self-governance, having something to offer to erode away that partisan unity in terms of extra accountability might be helpful. In any case I'm inclined to give the guy with the front row seat as it were the benefit of the doubt on what might and might not help.

If DROP means nothing to the State Senate, the best thing Council can do to prove it would be for all 17 of them to go to Harrisburg and individually lobby all 50 members of the State Senate personally as far as I am concerned. That option B would be a perfectly fine alternative.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

yes, I agree with three tiers of taxation

It seems to me that all 3 levels of government (federal, state and local) should be have full authorization to impose taxes independently of each other. I haven't considered the benefits of other models, and there may be some, but my inclination is to have 3 tiers, since each of the three provides services and, via elections, is accountable to the electorate.

See below

I believe Pileggi is writing himself a political escape hatch with DROP reform and god bless the insufferable bastard, its not the worst thing to give him.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

OK here's the deal and why DROP matters

DROP across the board, not just for electeds, is speeding up the draining of the city's severely depleted pension fund. Basically while you are in DROP you are taking money 4 years early out of the pension fund, denying the fund's ability to use your pension money to earn dividends to pay the next guy's pension. And on top of that, the money taken out of the pension fund and put in the DROP account earns a guaranteed 4.5% annual interest which while the stock market is down is better rate of return than the pension fund itself is earning, thereby doubling the damage.

If Senate Republicans are going to let go of Philadelphia's budget as a state budget political bludgeon, they need to feel they need to be able to go their districts and say they got significant "reform" from bad old Philly on the pension problem - which is a problem not just for here but cities across the Commonwealth. Basically its something they need to be able to say they got something.

But its a "something" that is without a question actually helping imperil the city's fiscal health, its not a benefit that was awarded in collective bargaining but rather a Rendell-era retirement managment tool that got out of control, and it makes lots of Philly voter shopping mad.

Evidence? Pileggi put out a press release asking PICA for more time to consider the Philly budget proposals.
In it he cites concern over the pension fund proposal, not the sales tax as to why he needs more time.

He quotes Sen. Pat Browne, another R on Appropriations,

"Philadelphia's pension fund, over the long term, has serious problems. We have a chance to make some important reforms not included in the current version of House bill 1828 which would ensure the system's long-term health. We should not squander that opportunity."

Let me be perfectly clear here. I don't think Browne or Pileggi give a flying freak about actual reform to Philly's pension fund. But it would give them something to grab onto as a "victory" as they let go the stranglehold on Philly's city budget. And as a B.S. "victory" to give them, its something that would actually help the city's fiscal health long term. Win-win. Good politics. And I say that as someone who has come to genuinely despise Pileggi's B.S. through all this.

Lets give them that escape route, for all of our sakes.

City Council, get cracking.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Deduction

"Excellent! I cried. "Elementary," said he.

Yes, if this interpretation is correct

This could be a very smart escape hatch to give them, provided Council is indeed smart enough to grab a lifeline when its offered to them - and provided the timing is not so down to the wire that its too late to end this stupid game of chicken and we are all screwed anyway (still a very real possibility).
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

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