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The Germantown Budget Bonanza
Submitted by Dan U-A on Thu, 02/19/2009 - 10:12am.
Last night, along with about 500 other people, I participated in the Penn Praxis/WHYY City budget workshop. Nothing like a little sim government, baby! It was the first time I have been inside the walls of Picket Middle School Mastery Charter School since I was about 6 years old and learning how to swim.
In a couple of parts, I will run through the night as I can best describe. I am going to start with the criticisms first, because I am going to send this to Chris Satullo in hopes that some things may be changed in the upcoming sessions. And the sooner the better, since more sessions are coming.
The basic set up of the forums is this: You break out into groups of 20 or so, where you are given a list of proposals that earn you ‘points,’ either by cutting services or raising taxes. The goal is to get to 100, which I suppose is a billion dollars. It is sim government.
The biggest problem with this, as was mentioned to me when I walked in by Adam Lang, and then demonstrated throughout my breakout session, and then confirmed by many people afterwards, was the way the project bundled proposals together.
For example, I think it is unfair, inhumane and bizarrely stupid that we have about 1,000 people in jail (at a cost of more than 30k per year per prisoner) who are accused of non-violent offenses, who are deemed not to be safety risks, but who cannot afford the nominal bail that is set for them. If you or I were ever accused of a crime like low-level possession, someone would come forward with the couple hundred bucks and bail us out. But if you are poor, you sit in jail, and we as a City pay for it. It is just so dumb. Yet, that proposal was bundled together with inhumane options, such as overcrowding our jails. So, a small majority voted no, because they didn’t want more overcrowding. If the proposals were separate, we would have easily earned ‘points’ and advocated for a humane policy. Many things like that came up throughout the session. (Also, it was a little funny screaming about the jail thing when Deputy Mayor for Public Safety and voice of sanity Everett Gillison was sitting in on our group.)
Second, the points themselves may not be accurately tied to how much money each proposal raises. For example, after much deliberation, my group saw the obvious: that the only way we would close the gap without decimating services was to come up with revenue somewhere, and raise taxes. And so we did, and raised the property tax rate by 4 mils, with a low-income rebate that we wrote in ourselves. According to the scorecard, each mil that was raised got us five points. However, according to Bill Green/Patrick Kerkstra, that appears to be based on an incorrect assumption about maintaining the current 60-40 split of the tax to the school district and city. (In other words, we can raise the City’s portion only.) And so, if he is right, if we raised our tax rate by 4 mils, we would have actually immediately ended at least half of the deficit. (Which, after the pension magic, should be 80 points, not 100 points.) (Note: My mistake. The workshops appear to actually have this right. See the comment below.)
There is also a more fundamental issue, which is, whether participation in of itself makes this a ‘wonderful’ thing, as our moderator said. I think participatory government is a great thing, but, it would be pretty hollow if it didn’t mean anything. And, I hope the goal isn't just to show us how hard it is, which our moderators also didn't stop talking about. We know it is hard!
As one of our civic leaders said, who was also in the session with me… We will see.
More soon.
Property Tax May Be Right After All
According to Patrick Kerkstra, he thought the same about the 60-40 split, and asked the City, and they said the numbers are correct as they are given in the budget workshop, and assume the city would get 100 percent of the funds.
Property Tax Millage Rates
There are separate rates for the City and School District.
My Public Education Reinvestment Ordinance(found below)lowered the City rate and raised the School District rate which left the property tax liability the same for the taxpayer, but created a 60-40 split of all revenue that favored the school district.
We could have just raised the school district rate and not lowered the City rate, but that would have increased the property tax liability for the taxpayer.
Either rate can be changed - or both - but the City revenue is only generated from the City rate.
§19-1301. Real Estate Taxes.
(1) For each of the following years, a tax is hereby levied at the following respective rates on each one hundred (100) dollars of the assessed value of taxable real property returned by the Board of Revision of Taxes in the year immediately preceding the stated year:
Year of Tax Tax Rate
* * * * * *
2003 [and each year thereafter]
through 2007 $3.474
2008 and each year thereafter $3.3056
* * *
SECTION 2. Section 19-1801 of The Philadelphia Code is hereby amended to read as follows:
§19-1801. Authorization of Tax.
* * *
(2) For each of the following years, the tax imposed by the Board of Education of the School District of Philadelphia shall be at the following respective rates on each one hundred dollars ($100) of assessed value of taxable real property as returned by the Board of Revisions of Taxes as the assessment made in the year immediately preceding the stated year:
Year of Tax Tax Rate
* * * * * *
2003 [and each year thereafter]
through 2007 $3.115
2008 and each year thereafter $3.2834
WWGjr
How about this?
Here's my preference, of course:
AN ORDINANCE
Amending Section 19-1301 of The Philadelphia Code, entitled "Real Estate Taxes," to authorize the City of Philadelphia to impose a tax on real estate within the City of Philadelphia, and to amend the tax rate on land and improvements to increase the tax rate on land and to decrease the tax rate on improvements, under certain terms and conditions.
THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1. Section 19-1301 of The Philadelphia Code is hereby amended to read as follows.
(1) For each of the following years, a tax is hereby levied at the following respective rates on each one hundred (100) dollars of the assessed value of taxable real property returned by the Board of Revision of Taxes in the year immediately preceding the stated year:
Year of Tax Tax Rate
1974 to 1976 $1.975
1977 to 1980 $3.275
1981 to 1982 $3.475
1983 to 1984 $3.90
1985 to 1988 $3.505
1989 to 2002 $3.745
2003 through 2007 $3.474
2008 $3.305
2009 $6.9472 Land Rate
$2.1688 Improvement Rate
Joshua Vincent
www.urbantools.org
www.ourcommonwealth.org
Phree Philly
Property Tax Points Incorrect
I confirmed with the budget director at the event in South Philadelphia tonight that the points for raising millage were not correct. Steve Agostini said it is closer to 12 than the five points given. That is, raising 1 mil is worth almost $25 million, not $10 million. But it still only means the same $51 per year per household advertised. This would have made a huge difference in peoples assessment of their willingness to accept cuts they did accept or raise other taxes they raised. It is a very large blunder.
That being said, it was great to see people engaged in the same exercise council will soon undertake and hear what they think is important. In three nights of this so far, the groups are reaching very similar conclusions.
Bill
That's a big difference, Councilman Green
Thanks for clearing that up.
In real terms, that makes property taxes seem even more like the least harmful place, overall, to seek new revenue, if seek new revenue we must.
Unlike business taxes and the wage tax, clearly and consistently cited by employers who have left the city as a reason for their leaving, our property taxes are not high when compared with our neighbors'.
If?
We are long past any reasonable use of the conditional on this subject.
My experience at the budget forum left me unsure
that we need to raise any of the major taxes.
It certainly didn't convince me that we don't need to raise them. But it didn't move me to looking at the budget your way either.
I take your dismissive tone re: not raising taxes as a reaction to the Nutter administration's dismissive tone re: raising taxes. That makes sense.
I don't fault you for it, but I just don't agree with it. Not yet, anyway.
I agree that we probably can raise revenue in ways that won't leave the city much worse off (ie, less attractive as a business or residential destination): I got my group to agree to raise the tax on entertainment tickets from 5% to 6%, and my group also agreed to raise the tax on parking garages by 1%.
Still, before I gave the ok to a major tax hike (and I'd definitely look at real estate taxes first; I'd argue that that's the direction that the markets we're in point) I'd want to open up the books regarding the way that we pay police overtime, for example, and see if there weren't managerial decisions that couldn't save a lot of money, while keeping the same number of cops on the street for the same amount of time.
There were a few other rocks that remain to be turned over before I took your position.
The government of the 2d highest taxing large municipality in the U.S. needs to be vigilant, I think, in its attempt to stay out of the cellar.
There's something wrong with that calculation
The real estate tax raises about $400 million a year. $25 million is about 6% of that. So that says to me that the real estate tax would have to go up about 6% to raise $25 million. Part of the problem may be in the use of the word mil which nowhere appears in the City real estate tax section of the Philadelphia Code. That section is worded to impose a tax of $3.305 for every $100 of assessment. But a mil is a mathematical synonym for 1/10th of a percent or .001. As best as I can understand it, one can compute the Code's millage by dividing the legislated rate of $3.305 by 100. That gets you .03305. Every .01 of that result equals 10 mills. Therefore, .03305 equals 33.05 mills. 1 mill is about 3% of that. So a 1 mill increase would seem to get you 3% of the total tax take of $400 million or about $12 million, not $25 million.
Property Tax Numbers
I do believe the below is now correct information. I would not bet on it until the budget office confirms it. Stan is right. 1 mil is 6 points or $12 million. However, its $16 per average household for those six points. So, for the $51 we actually get around $38 million. See below explanation someone at the Henry George Foundation emailed me. I will try to confirm this Monday with the city.
There are 347,724 taxable residential owner-occupied parcels. There
551,820 total taxable properties (commercial, industrial,
hotel/apartment,vacant, mixed use as well as residential).
We just ran the numbers per the BRT data we referenced earlier. Here's
what we have so far.
The estimated city tax increase for a "HOMEOWNER" as stated in "Tight
Times, Tough Choices" (TTTC) is $51.
What we conclude is that owner-occupiers (i.e. homeowners) would see
an increase of about $16 with an increase of 1 mill on total taxable
value for that type of property.
How?
$5,469,845,152 is the total taxable value for homeowners.
An increase of one mill (.001) would yield $5,469,845
The average homeowner tax bill (per property) would go from $520 to
$536. That's a $16 increase.
. . . the higher $51 average as presented in "TTTC" is
probably a figure derived from all types of property. We have found
the average increase for other classes (per parcel) are substantially
different.
That is Correct
We ran the numbers twice, by two different people. Mills is archaic, and confuses the issues; most states do not use that term. .03305 is correct.
Joshua Vincent
www.urbantools.org
www.ourcommonwealth.org
Phree Philly
Working Groups
http://phillyneighborhoods.org/
Thanks everyone for the simple explanations
Bob Shipman
Dan: "If you or I were ever
Dan: "If you or I were ever accused of a crime like low-level possession, someone would come forward with the couple hundred bucks and bail us out. But if you are poor, you sit in jail, and we as a City pay for it. It is just so dumb. Yet, that proposal was bundled together with inhumane options, such as overcrowding our jails. So, a small majority voted no, because they didn’t want more overcrowding. If the proposals were separate, we would have easily earned ‘points’ and advocated for a humane policy."
When this came up in my group last thursday, the moderator kept articulating this idea inaccurately. he kept saying "the first 1200 released will be nonviolent offenders", an we kept responding "NO, the ONLY people released should be nonviolent offenders."
On the way back from canada, we heard a report on NPR that 11 states are considering decriminalizing marijuana because they can't afford to enforce the law anymore. Pennsylvania in general, and Philadelphia specifically, should adopt this policy for the reasons you articulate above, Dan. I realize no one in the legislature has the courage/common sense to propose legalizing, taxing, and regulating the stuff like alcohol, but decriminalization coupled with hefty civil fines would save money while raising [some] revenue.
Oh, and satullo will tell you you're a cynic for questioning the premises of this exercise in Sim government.
Not Even Offenders!
These people are not even non-violent offenders. They are accused non violent offenders who are awaiting trial but can't afford bail. It is the nuttiest, craziest thing in the world.
Your point should be reflected in report sent to city
Hi Dan,
I sat in on a little of the training for the moderators and as I understand it, your example about your group's decision about prisons...
...should be reflected in your moderator's group report which will be forwarded to the city. Some moderators seem to be more comfortable than others with deviating from the script to estimate point values when a group runs into a situation like the one you described. But regardless of whether it would help your group get to the 100pt level, the ideas expressed about letting our non-violent, and non-violent awaiting trial, should make their way back to the city. All of the reports will be posted and if this is missed, make a comment or email and it will be updated.
Satullo and Harris Sokoloff moderated my group
and I have to say that I was impressed by the number of times that Sokoloff was willing to rip off a fresh piece of butcher paper and jot down an idea that was not on the prepared program.
He promised to send the ideas to City Hall together with everything else.
I talked my group into the 20% cut in the Vehicle budget and was generally impressed by the thoughtfulness of the assembled citizens and the fairness of the moderators.
It could so easily have devolved, and it didn't. It was more useful than I expected it to be.
(I might even walk down to the South Philly one tonight.)
That said, both the best part and the worst part, from my perspective, is that folks generally were representing their own needs first, and those who weren't represented were the first ones chosen to bear the brunt of the cuts or tax hikes.
So the first tax everyone was willing to raise was real estate transfer, since (I presume) the generally graying folks assembled either already owned their own homes or weren't in the market for one anytime soon. That wouldn't have been true of a younger crowd.
I don't want to make too much out of this. After all, the rise proposed is from 3% to 3.1% or $100 for every $100,000 of property; and again, part of the point of the project is to get the opinions of real citizens, and presumably that would include prejudices and all.
I guess, as in any sampling, one has to take into account the control group.
Interesting, though. Very interesting.
My moderators wrote stuff
My moderators wrote stuff down, too, and they were very willing to listen. But, I think it still left people feeling a little frustrated.
In my group it was the real estate tax. I suspect that the tax everyone picks to fill it will vary, I know my dad's group chose to raise the wage tax.
Also, Councilman Green...
I know he is running for Mayor in some far off time, but, if running for Mayor means a Councilperson attends all these and watches deliberations, I wish everyone were running.
I am happy to see Councilman Goode will be incorporating this stuff into his own process. I think Donna Miller could probably have come and watched what went on in the heart of her own district.
I reached 100 points ...
I reached 100 points ...but as a group of one, there wasn't any disagreement.
I decided to download the exercise and complete it (I also gave copies to staff members).
I dedicated 49 points to revenue enhancements and then 53 points to cuts, totalling 102 points - so I rehired some lawyers and went down to 100 points.
I didn't raise business or real estate transfer taxes.
I didn't touch police, fire, public health, or homeless shelters.
I definitely closed a prison because of the amount of non-violent suspects there simply awaiting trial.
Your position should be forwarded through the process but, at least, I heard you - and agree.
In fact, I discussed it with Councilman Jones, who just held hearings on Community Court alternatives.
I'm not sure if the 100-point exercise is totally valid and precise but it's already creating new dialogue.
WWGjr
Details, Councilman?
As one of your constituents, it would be interesting to see your breakdown of how to get to the 100 point level.
Nice Try
It was an exercise and I didn't base any decisions strictly upon the exercise.
I utilized my experience and knowledge of budgeting and taxation to see if I could reach 100 points or if it was a futile exercise.
It was a difficult exercise but it had some worth.
The upcoming budget process will be my 10th -and my contribution will be based on my nine-plus years of service as well as budget and taxation experience.
I believe that I've probably given you more information in this regard than anyone else who is directly charged with - and soon to be convicted of - making the hard choices. :)
WWGjr
Hey, you can't blame me for trying
And I appreciate this,
But that doesn't prevent me from getting greedy.
So, how's about giving at least some more by way of your general framework for how to resolve the budget problems?
Seriously, isn't it only legitimate for you to lay that out in some reasonably level of detail for your constituents? If we don't know more about your thinking and give you feedback, then how will you, as our representative, know how to represent us?
The framework that I applied to the exercise.
Council's primary responsibility in any budget process is to set an appropriation level that matches projected revenue with a spending plan.
In a budget crisis, we look at both budget cuts and revenue enhancements as options.
In a crisis this severe, we must employ both options.
I started the exercise on the revenue enhancement side and I reached 49 points.
I found at least 51 points on the other side while prioritizing safety and health.
The choices will be broadened as we move through this process but that's how I approached the exercise.
WWGjr
we can't afford our drug laws
when i read posts like Dan's and when i consider just the immediate costs of incarceration, which are around $20,000/year per prisoner (and more if you include health care etc), it becomes clear that we can't afford our drug laws.
We can't afford it in a global sense either. According to CNN, drug violence is pushing our neighbor mexico into civil war. We don't need this on our border.
Furthermore, the cartels are evading customs by setting up shop in the US. the majority of their revenue, surprisingly, comes from pot.
At the very least, decriminalization allows us to use our prisons for actual criminals like thieves, muggers, rapists, and murderers, one of those "efficiencies" the administration likes to talk about. It saves a lot of money. But by coupling it with civil fines, you get some revenue and the city doesn't look like it approves of drug use (just gambling in residential areas).
Thoughtful people know that by legalizing, taxing, and regulating pot, we realize an enormous savings at the federal, state, and local levels and allow police to focus on real crimes that actually hurt people. but furthermore we increase our revenue base not only through sales of pot, but for the long term. Current law prevents anyone who has been convicted of a drug offense from receiving federal student aid, trapping potentially productive citizens in dead end low wage jobs, which may lead to more run-ins with the judicial system.
Our drug laws ruin people's lives needlessly, and are detrimental to our economy.
The Germantown Budget Bonanza
I too was filled with worry about the sincerity of this Sim exercise. For example, on the expenditure side, we were told that cutting the Law Department by 40 lawyers and eliminating all outside contracts would be worth 2 points. Now regardless whether you think this is a good idea (the City does need lawyers to enforce its codes and collect taxes) how does laying off 40 lawyers and ending all outside contracts give you such a small number? If you figure that lawyers cost the City $100,000 each in salary plus fringes (a conservative estimate) that's $4 million. No one seemed to know how much outside counsel costs the City, but I can assure you it's a lot. We were in the overflow room (gym) with Chris S. and Harris S. but got no answers.
On the revenue side, why were the choices so few? Even Tom Ferrick mentioned ending the 10 year tax abatement, yet it wasn't even on the list. When I asked to consider it it was written on a flip chart but left unscored. Surely someone knows how much this would save, yet it's treated like a total mystery.
I'd like to believe, really I would, but these guys make it hard.
BigRich
lawyers and abatements
I think a lot of those law department employees would be happy to know that they make $100,000. I'm sitting here with a few thousands of pages in two huge binders and looking at the salary ranges for various positions in the law department. Assuming that the positions on the block are lower level staff and not the City Solicitor or First Deputy Solicitor ($174,464 and $153,645 respectively) then we're talking about a lot of lawyers who salaries are in the $49,626 to $119,219 range. There are also a lot of clerks, assistants and "analysts" who make anywhere from $28,335 (that's a "Word Processing Operator" which different from a "Word Processing Specialist" which different from a "Clerk Typist 1") to $56,617.
Yes. There are some $100,000+ lawyers but when you leave out the top levels, I don't think there are even close to 40 of them left. And wow... now that I actually dive into this document... there are some pretty ridiculous sounding job titles in there.
As for the abatements... I'm not so sure that those could just be ended next year. Someone who paid "x" amount for a home in Center City with the idea that there were anywhere from 1-10 years left on their property tax abatement would probably be pissed to the point of suing the city if that abatement were suddenly taken away on July 1. That's not to say that such a notion couldn't be brought up, over and over again, as a long term solution.
Sokoloff noted ending 10 year tax abatements
was an idea supported by a majority in my group (I didn't vote for it) and wrote it down to send to City Hall.
He said that if passed now, it would not be an immediate revenue generator. I'll add that the Pew study "Philadelphia 2007: Prospects and Challenges" says that the tax abatements themselves very likely have been big revenue generators, so ending them might be a seductive but bad idea.
Restructuring them for a new and changing real estate market (moribund at the moment) might be a better idea.
As for trimming the suits, I think it's as Dan P. says above; we're not working with as much material as you might expect.
But, if possible, go for it, I say. If in an office of 3 one employee makes $100K and two make $50K, the first question I'd ask is whether we can get by without the boss.
Not to defend City lawyers,
Not to defend City lawyers, but as a future lawyer and all that, did anyone see the article about SEPTA hiring outside counsel? If the City gets sued, or needs to sue to collect a judgment, they need lawyers. If we lay them off, we will have to hire firms, which are not exactly cheap. Firm lawyers don't start at 50k per year...
And, the biggest unit of the law department is the group of lawyers that are tasked to represent children in cases of alleged abuse. As the DHS controversies make clear, we have a lot of those types of cases.
I am sure there are some savings to be made there (and if I recall correctly, someone should look at the work rules of typists, and ask whether they use computers). But, as with much of this, if we cut the law department significantly, and just lay off lawyers, we will be doing some harm.
Lawyering and Mentorship
And, trust me, you don't want an office of only lawyers making 50k. So much of good lawyering is depending on someone who has already been there. The quality of representation will be hurt (and slowed) if you get rid of the people who know what they are doing.
Agreed. When the market is high
and you need someone or something -- as the city does smart lawyers -- you have to pay.
City government should try to wring savings out of legal costs, and contracts with law firms -- especially those with political connections -- should be examined by a City Controller's office hungry to find over-expenditures.
But it's true: it's in our best interests to pay some higher salaries for lawyers.
We'd have to change future abatments
The current abatement-enjoyers would surely sue, and would surely win if government tried to take them away. I brought that up at my budget group, and people accepted that pretty easily.
Understand, I think that the abatements worked to bring development into the city, but the benefit was a privileged benefit, meaning that the builder/developer capitalized the amount of the abatement into the selling price at a time when money was being given away very cheaply. It had a clearly connective impact on higher assessments in the peripheral Center City neighborhoods like Bella Vista. The bubble was inflicted on people who had been in their homes for 40 years. No good.
How about phasing out 10-year abatments at the same time we phase out the tax on buildings - all buildings - to spur construction, but not at the cost of "abatements for me, but not for thee?"
Joshua Vincent
www.urbantools.org
www.ourcommonwealth.org
Phree Philly
Gotta differ on the tax abatements, Sam
They are geared to higher-end developers building high-end conversions in edge of Center City neighborhoods. The paper work is cumbersome an unfriendly to individual homeowners and small scale rehabbers out in the neighborhoods and so only larger scale, higher end developers really take advantage of it.
The idea that by giving a bribe to the rich to move to the city to trap their wage taxes and and real estate transfer taxes might have been a trade-off worth considering in more prosperous times but when folks in the neighborhoods are facing dire, quality-of-life cuts in services, thats a bitter, bitter pill to swallow.
Its well past time to drastically retool the abatement as far as I am concerned. A developer should need to do a little more for achieving community-enhancing planning goals than simply rewarding the rich for living in the city to qualify in my view. Lets aim it, coupled with zoning changes, at developments that bring grocery stores with fresh produce to neighborhoods where access to healthy foods is a real problem, or stimulate big boxes to adapt themselves to a walkable face for struggling neighborhood transit corridors. Lets only give it to developers who sign up for inclusionary housing. Or if its politically doable, look at Joshua's LVT angle just above - which is inherently fairer and "neighborhood-smarter" than the system we have now.
Regardless, the abatement was always a clumsy way to compensate for the fundamental problems with licensing and inspections and permitting in this city generally that made it an unfriendly city to build in, in the first place. Instead of fixing the system so more little rehabbers would comply with a more rational and less bureaucratic building code (and the city would capture more fees in the process) we gave away tax revenue to our cities biggest developers and wealthiest citizens. Bad social policy which didn't address the fundamental problem.
Even if it only begins to positively affect our budget situation going into the future, its time to change the abatement.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
I used to crunch crunch crunch crack vials
on the walk to my office on the 1700 block of Walnut Street in the early 90s, when I was the canvass director for Peace Action.
Center City was a different place then, definitely more desolate, with fewer businesses and certainly a lot fewer condos and rich residents.
There are many reasons why Center City blew up afterward, first in the late 1990s, and then started expanding south, north, and even east (via Fishtown), in the present decade. The national economy and rising regional real estate markets definitely played large roles.
But, let's be honest fellow bitter-pill swallowers, the tax abatements helped. Basil Whiting says in his big 07 Pew study:
Now, have times changed significantly in just the two years since this report was published? Definitely.
I agree, as I say above, that we have to change the tax abatements to change with the realities of the market.
But it's my opinion that as the city with the 2d lowest median income of the top 10 -- and the lowest of any in our region (lower than Baltimore's, lower than Pittsburgh's) -- we still have a way to go before we turn from the task of attracting middle class and wealthy people to move downtown.
It's not like other cities don't cut similar deals. They do. We should learn from the most successful.
But, as far as the abatements go, until somebody has a more workable idea for attracting the kind of development that abatements have already attracted, I say fix it, don't nix it.
Downtown living became more popular across the country
Other cities actually do ask more from the developers they give abatements to in terms of achieving smart development or economic inclusionary goals. New York has phased its program out as the Kerkastra article points out.
People's gut level reaction that its just morally askew to look first for cuts to basic neighborhood services while we give away the farm to the wealthy and our most powerful and connected developers might be a little simplistic but its not all wrong. At core it really is unfair and the upside is oversold by those same developers who typically have no problems getting their voice heard in City Council.
And if you are going to go around reverently quoting from the BIA about how wondrous the abatements are can we talk about how many of these suggestions they have been pushing for years have actually been achieved? If we have to give builders a boost why do we have to go out of our way to only do the part that helps the fabulous wealthy and uber-powerful and chronically neglect the parts that will also help Joe the Neighborhood House Renovator as well?
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
Your comparison cuts two ways
Sure, when Philly gets even into NYC's neighborhood re: the percentage of its population that is rich people living in downtown condos, I'll be the first to advocate retiring the abatements, and it won't have to be in 20% increments, two years at a time, as Bloomberg is doing.
But can we catch up to Baltimore first?
Pittsburgh?
Look, I agree that we need to adjust the abatements, and I certainly agree with the BIA report you link to, that we need to update and streamline the zoning code. That's a big issue for most Nutter supporters.
I actually don't think that there's that much separating our positions.
But if you're suggesting that the project of reviving Center City, and the project of getting more rich people to move into condos, is pretty much over, well then I guess we do disagree.
I quoted the Pew study before (that referenced a BIA report), and I'll reference it again: we're still the second poorest big city in America, and we're the poorest in our region.
We should stop thinking in terms of helping West Philly OR Center City and realize that we have to do both.
I agree we probably are not that different
I just think you might be following a version of the pro-abatement argument that leans in my opinion too heavily on how important it is to lure rich people who realistically don't really care all that much about the abatement in deciding where to live and neglects ballancing its budget costs against the basic quality of life issues that lure and keep the much larger numbers of middle class people that also help to prop up Philly's tax base and more importantly do it more Philly neighborhoods than just Center City ones. Thats why I like the idea of pointing the abatement toward developments that bring jobs and mixed middle class and economically inclusive development to areas where the often lazy big developers are afraid to go. Keep the abatements for now but ask for more from the developers we give it to.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
Definitely get more out of developers
I agree.
I recall a conversation with the mayor in the early days of his campaign in which he said he realized Philly has to feel good enough about itself to ask more from those who want to build in our downtown.
When cities work (better than Philly does at present) thriving downtowns with high end businesses and condo-living millionaires, who are enjoying great quality of life, contribute to the community and specifically contribute revenue that allows for necessary services in residential neighborhoods where quality of life needs to rise.
That's as it should be.
Center City should thrive enough to seriously help pay for services that affect other parts of the city.
Everyone --including Center City developers -- should be rowing in the same direction enough to be aware that spreading middle class living to all Philly's neighborhoods is a goal.
So much, finally, is contingent on education on one end of the equation and jobs on the other. You have to have both.
Anyway, Center City certainly has moved during the past couple of decades towards being that kind of downtown, but it isn't there yet.
To use a Phillies analogy, for the first time in my life, Center City is a place where local sports celebrities want to live, so now Chase Utley and Cole Hamels live not in Voorhees or leafy Chester County, but right down on Rittenhouse Square.
When we get half the lineup downtown, we can probably think about retiring abatements entirely. At that point, high end Christmas shopping won't require a trip to King of Prussia or Suburban Square. My UArts students point out that a more functioning downtown would have a movie theater too. And Coraline in 3D would not require a trip to the burbs.
Those upgrades should help, not hurt -- and come at the same time as -- the goal of raising the quality of life in residential neighborhoods.
When I first visited my current neighborhood in the early 90s
I crunched crack vials a 1/2 inch thick on the way I would now walk to Kingsessing Library that are no longer there. And to the best of my knowledge there are no abated properties on that walk but I have no doubt that cuts to cops, closing our pool and our library could all conspire to quickly hasten the return of those vials.
Perhaps its time to refocus our priorities with the abatement and as you say "fix it."![]()
do.
-Sean
MrLuigi, my cat, actually only types half as badly as I
Sean, I don't know your
Sean,
I don't know your route to the Kingsessing Library, but I do know that many properties in that area enjoy tax abatement and other legal tax relief programs. AND, J Blackwell's district has earned a notorious reputation for safe-harboring property tax delinquents---which results in an "extra-legal" tax abatement program that well over a third of her constituents enjoy.
Its possible the Neighborhood Restorations big rehab project
around 52nd and Springfield, as you suggest, is legally abated because that is a politically-favored, politically-connected developer, but the paperwork is rarely convenient for individual home rehabbers - even if they could in theory apply. As the Kerkastra article points out, the bulk of those recieving the abatement are large developers and commercial landlords around CC.
The point is whether the abatements are really the decisive factor for, as Sam asserts, the Chase Utley's of the world deciding to live downtown - which is an odd assertion because the one pro ball-player interviewed in the story says pretty much explicitly that he could care less whether his condo abated or not. I would tend to agree with that and say it is not, that convenience and quality of life (which severe budget cuts severely threaten) were really the big deciding factor, both in CC and in inner West/SW Philly's resurgence over the last decade.
I would also suggest any economic plan that relies only on the numerically small very wealthy world of pro ball players and uber-developers is probably not as sound as one aimed at the numerically much larger field of plain old middle class people. But that's me.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
Did you read the article about abatements that Joshua linked?
This quote was pretty amazing
And needs to be weighed against the claim that 2/3 of the development was the result of the abatements.
I'm not sure I trust how all these claims are validated. Clearly, it's difficult to quantify all the related benefits from increased development But it's also clear that while it's great that Center City and some of the surrounding neighborhoods are nicer than they were 10 years ago, there's something fundamentally wrong when improvements in those areas have taken place without similar changes in poverty levels, living conditions in the vast majority of the City, better schools, etc.
Point of Clarification on Law Dept. Attorneys
Law Department lawyers starting salary is about $45,000. Anyone making $100k+ is usually a senior management level attorney who has been practicing for many, many years.
Law department costs
I'm afraid i didn't make myself clear. I wasn't saying i agreed we should cut 40 lawyers, I was taking issue with the scoring mechanism. I was saying several things:
1. the proposal was 40 lawyers AND ending ALL outside contracts. It was scored as 2 points. Note it did not say 40 people, or 40 typists, it said 40 lawyers
2. Even if it was all rookie lawyers with a base salary of 45K, that's note their true cost -- you have to figure in pension, social security (employer's portion)and health insurance.
3. My educated guess is that it could come to 100K per lawyer, but maybe it's only $80K or even $60K; the point is that's still close to the total amount of savings scored for this item.
4. the big savings should really be from ending all outside counsel. If you do the math on laying off 40 lawyers, there is little or no savings being factored in for the private counsel who do a huge amount of work for the City.
That's why I am skeptical.
BigRich
Other revenue sources not mentioned at the workshop
At the workshop they said they weren't including the residential property tax abatement because it's hard to value. But that's not the only source of revenue we are foregoing. Not a word was said at the workshop about all those special deals for businesses that threaten to move to the suburbs. Comcast is the one we know about, but PIDC's 2007 annual report says they provided "incentives" to 130 corporations to encourage them to stay in, or relocate to, Center City. One wonders if a company just has to cry wolf? There are other public subsidies for economic development (TIFs, below-market rate loans, etc) that are supposed to pay off in terms of job creation -- but we don't really know what (if anything) the public is getting in return for the millions we DON'T collect in various taxes each year.