- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
Stan Shapiro's blog
First, let me pay my respects. You're looking to take on a challenging job. The problems of the City are tough and especially so if you have progressive values as we do. The City is under fiscal stress, and that means City Council can't do everything we'd like it to do if we could get just a little help from Harrisburg and Washington. But Neighborhood Networks doesn't think we, or the politicians we elect, should throw in the towel on implementing progressive ideals. Maybe Council can't do everything, but it can do lots of things that really do matter. We've even written about how important the job of a Councilperson is. So if you agree with all of that, and if you're interested in NN's endorsement, you should definitely download our questionnaire and return it. We will only endorse candidates who do.
What the heck is a PIDC and why should anyone care? If we're talking about good government, the thing to do is go after those pathetic drones that sit around doodling at their desks while the City goes to hell in a hand-basket. We know where they work too, the Sheriff's office, the City Commissioner's Office, the Streets Dept. etc., etc., etc., the postal service. Fox News tells me that one of those postal workers was caught drinking at a bar, while on duty. Well, of course, what did you expect? They're all like that aren't they?
Thankfully we have a vigilant press to pound on that stuff so that our resentment level at City workers stays high. Here we are jumping as high as our bosses tell us to in the private jobs we pray to God we still have tomorrow, but we know who to blame: those damned public workers who are out there having a good old time until their thieving pensions kick in.
I was with a group of Obama volunteers and Neighborhood Network members Tuesday night gathered to hear the State of the Union. My first impressions were positive. Obama recognized the country needs investments in infrastructure to move forward. He pledged clearly that gays would be openly serving in the military this year. He refused to commit to any cutbacks in social security. He called for eliminating stupid subsidies to the oil industry and for cutting back other corporate tax breaks. And he renewed his call for ratcheting up the taxes of the rich and super-rich.
Our politicians, as usual, have their heads in the sand, which is where they’d like the rest of us to bury ours. Here’s how the Inky last Saturday described the mindset of the Mayor and his Finance Director regarding next year’s budget:
Nutter's message now is that the hard choices of the last two years, along with an improving economy, have stabilized city finances.
Numbers from the first quarter of the 2010-11 budget support his claim thus far, with tax revenue appearing on target. For city Finance Director Rob Dubow, that is "a nice change, after the economy kept falling off cliffs. It's nice to see it stabilizing."
In January, Nutter deactivated seven fire companies, and he had proposed closing libraries and pools. At the beginning of 2010, Dubow asked department heads to present scenarios involving cuts of up to 7.5 percent. The city ended up spending $74 million less than it projected in 2009-10.
For next year's budget, Dubow has asked for plans with cuts of 1.5 percent and 3 percent, but he also offered departments the chance to argue for new "investments" - representing potential increases - in their budgets. Department budget increases would not have been contemplated over the last two years.
So everything is coming up roses. It looks like revenues are doing nicely. We might even be able to increase spending in selected Departments. And since everything’s coming up roses, guess what? There will be no City tax increases next year according to the Mayor. No tax increases, ergo, no worries. Go back to sleep everyone, pleasant dreams. Oh, and btw, there’s a primary coming up in May, so be sure to wake up then and vote to re-elect everyone.
There’s only one problem with this happy picture: it’s ridiculous.
So the question for liberals/progressives (pick your label or Glenn Beck will pick it for you) isn’t: “should we pay attention to business taxes in Philly.” It should be “can we afford not to pay attention to business taxes in Philly?”
We need to face this stark truth: business tax rates in Philly are now a life or death issue. The state is about to take a big knife to city subsidies, and the federal government will be doing the same. There are just no other ways to raise replacement funds that are even slightly progressive (as that term is used in tax lingo) –- other than raising business taxes. As I noted in my Friday post, the wage and sales taxes are both capped under state law, and the real estate tax is applied in an utterly arbitrary and capricious manner. Furthermore, the real estate tax just went up 10% last year and a further increase would face massive, justifiable resistance.
So that leaves us with the Business Privilege Tax. We need to get to know it better.
Progressives have completely missed the ball in dealing with tax policy. Republicans are fanatical about taxes and will sacrifice anything and everything else to lower them for rich people. Just in recent days they’ve said that they will allow nothing, absolutely nothing, to take place in the U.S. Senate unless the Bush tax cuts for the rich are extended. Since then they’ve filibustered a defense spending bill, a bill to pay the medical expenses of 9/11 responders, and the DREAM Act. They previously filibustered extension of unemployment benefits, something they now say they’ll let pass if the rich first get a big holiday treat. They are obscenely fixated on one thing and that thing is giving hundreds of billions of tax breaks to the rich.
Compared to tax policy, progressives are always much more interested in spending. We want money spent for children, the disabled, the poor, the unemployed, environmental investments and regulation, medicare, Medicaid and social security, and lots of other good stuff. We don’t want money spent on wars.
But when it comes to tax policy, we tend to just yawn . . . until very late in the day when we realize that Republicans are here to rob the bank. And by that time, they’re usually out the door with the money.
Why is it that we don’t seem to care -- or even pay much attention to –- where the money that we want to spend comes from?
The Progressive Organizing Workshop (POW) is tomorrow at 1 at Community College. It's sponsored by Neighborhood Networks, and cosponsored by AFSCME D.C. 47, Penn Action, Philadelphia NOW, Philly Progressive Democrats of America, AFT Local 2026, Action United, PeaceAction and Philly for Change. It will take place at Philadelphia Community College, Bonnell Building Auditorium, 16th Street, south of Spring Garden Avenue.
POW is where you should be tomorrow, but only if:
1) you don’t agree when Tom Corbett says that jobless people like living on the dole, and that gas drillers should pay no taxes; and
2) you don’t agree with Pat Toomey when he says that we should end corporate taxation, that global warming may not be man-made, and that, no, women really shouldn’t have the right to control their own bodies; and
Tomorrow morning, at 9 AM, something really important will happen outside City Council Chambers on the fourth floor of City Hall. That’s when the Coalition for Essential City Services (CES) will hold a press conference and rally to unveil a sweeping reform of the Business Privilege Tax (BPT), in particular, a complete revamping of the gross receipts (GRT) portion of the Tax.
The GRT has been successfully demonized in Philadelphia over the past 20 years, and has been directed toward extinction. It has already been cut from a high of 3.9 mills in 1988 to 1.4 mills this year, a cut of nearly 2/3. Starting in 1996 it was cut every single year through 2008. It is scheduled to decline again in 2013 and go away completely in 2022.
The rationale for killing the GRT has been twofold:
- It falls particularly heavily on small businesses because it taxes the first dollar of receipts whether or not a company is profitable; and
- It drives companies out of Philadelphia in order to evade the tax.
The first argument may not be totally without merit. So the CES proposal would exclude all businesses with receipts under $500,000 from the tax. We have discovered that these businesses, 85% of all the businesses paying the tax, account together for only about $8 million of the money the GRT raises. If we structure the GRT correctly, we can do without this money and any burden it puts on small business.
The second argument is largely false. The GRT is paid on all receipts from sales made into the City. Businesses outside the City pay close to 40% of the GRT because they pay the tax on all their sales into the City wherever they are. That’s right, whether you’re located in the City or in Nebraska, if you sell services or goods into Philadelphia, you pay the GRT on your Philadelphia receipts. Obviously those businesses that are outside the City cannot be driven out because THEY’RE ALREADY NOT HERE. And businesses in the City would have to give up all or much of their City business to evade the tax by moving.
So here’s the final reason why businesses will not move due to an increase in the GRT. The tax is little more than a nuisance to large businesses. I said earlier that at its height, the tax was levied at a rate of 3.9 mills. A mill is .001, that is one tenth of one percent. So a rate of 3.9 mills would result in a tax of $3,900 on receipts of $1,000,000. The current rate of 1.415 mills results in a tax bill of $1,415 on that cool million of receipts. And all of that is deductible from federal business taxes.
The CES proposal would take the tax back to where it was in 1996, at 3 mills, almost 25% under its 1988 maximum rate. That rollback from the current rate would cost a million dollar business about $1,600 extra in federally deductible dollars. For that nuisance increase, the City would net $83 million. If the City excluded all small businesses with receipts of less than $500,000 from the tax, it would still bring in $75 million. And that’s the CES proposal.
Of course, in evaluating any proposal, one must consider the alternatives. Should we raise $75 million from a trash transfer fee? A soda tax? A general property tax increase? Should we cut the City budget by $75 million? Now that we’ve finished patting ourselves on the back about how we saved the libraries for a year, should we let them go?
Personally I don’t like any of these alternatives to one that will take 70,000 small businesses out of the GRT and, with little pain to anyone, bring in $75 million. If you agree, please join CES at its rally tomorrow at City Hall. For more info on the rally and the CES proposal, please go to the new CES website and/or to the Neighborhood Networks website. And if you'd like to check out the Facebook page about the rally, and let us know you're coming, please go here.
Four of the six declared candidates showed up, including every Democrat except Anthony Hardy Williams. The church was packed. The feeling was electric, filled with a sense of accomplishment at putting together the first ever Philadelphia debate organized to highlight the interests, needs, concerns and goals of Philly's real people. I'm talking about people coming from all walks of life who have profound, immediate problems, and who need a politics that is real, rather than petty and personal. By their presence the candidates affirmed the importance of these communities of real folks, represented by both the 350-400 people in the room, and by the 90 advocacy organizations that had worked their butts off to make the event happen. The questions were substantive, the answers more or less so, but no one left feeling they hadn't learned a lot about who these people are that want to lead our state.
So the big news was the event, not any one individual. But it was also clear to me that the guy who is most in sync with the diverse and pressing needs of Philadelphians is Joe Hoeffel. Hoeffel repeatedly made clear that nothing good would be coming from the state unless we found ways to fairly raise revenue for the Commonwealth. So he made repeated calls for the kind of progressive tax reform that I have never heard a gubernatorial candidate make in all my years of following PA politics. The list of reforms he advocated included a progressive income tax, closing of the loopholes in the corporate net income tax that make it virtually a voluntary tax, and high, immediate taxes on gas extraction in Pennsylvania with no coddling of that industry. He also was the only candidate calling for recognition of gay marriage, and repeal of the abortion control act. His answers on questions related to prison reform, education funding, housing, AIDS funding and raising the welfare grant were all sensitive and appropriate to the imperatives of those issues, as were those more or less of Onorato and Wagner. (Rohrer, a right wing Republican, was, of course, coming from a different planet.) Yet Hoeffel clearly spoke with more passion about those things, and, given his willingness to raise revenue, much more credibly. He's definitely the guy I want to see sitting in the Governor's mansion in January.
But that's one man's opinion on the candidates. Whoever people may have left the event supporting, the greatness of the evening was that it happened, that so many of those who so often need to scramble just for the slightest recognition by anyone in power, had that power come to them to see their aligned strength. Now if we can keep that force going, the page that was turned last night will be the first page of a great new volume of Philadelphia history. Kudos to all those who had a hand in making this debate truly great, in particular Sherrie Cohen of CES and Gloria Gilman of NN, but including dozens of others who pitched in selflessly and anonymously to make this historic event seamlessly come together.
OUR Gubernatorial Forum, organized to raise the voices of working people, women, the LGBT community and the poor, is happening this Thursday evening at 7 PM. The location is Arch Street United Methodist Church, 55 N. Broad Street in Center City. If you’d like the concerns of regular people to be heard in this campaign, help us fill the Church so that the candidates can see our power. Please come out. We know the weather isn’t great, but being at the great progressive debate of 2010 will warm you up!
Just as importantly, on Wednesday at 12:00 noon, a key rally for health care will take place at Mother Bethel A.M.E. Church, 419 S. 6th Street, just below Pine at Addison Street. The “wise” people in Washington think we’ve given up on quality, affordable health care and that we will give them a pass in November for just letting the issue ride. This rally will say NO to that! Immediately after the rally a march to Washington will take place culminating in a rally there on February 24. Let’s give the marchers a great sendoff that they’ll carry with them all the way.
This is where we get to ask questions, and they will provide real answers. More than seventy local community and advocacy groups, led by Neighborhood Networks and the Coalition for Essential Services, will be holding the gubernatorial candidates' feet to the fire on February 18 at 7 PM at the Arch Street United Methodist Church, 55 N. Broad St. This is the debate you'll want to be at, so put it in your book now. We will be sure the snow stays away so you don't have to.
There are two great coalitions around that are working on City and State budget issues, both with much the same name. There's CES which stands simply for the Coalition for Essential Services. That group is focused on City budget issues. Then there's SEPCES which is the Southeast PA Coalition for Essential Services. Both of these were somewhat successful last year in preventing the worst of proposed City and State budget cuts from being implemented. But, as most of you know, substantial cuts were still made. More State budget cuts were made just a week or so ago by Governor Rendell.
The battle is about to stop even deeper cuts in an environment of shrinking revenue. Here are two ideas for improving how those of us involved with the coalitions might improve our lobbying this year and into the future.
The Democratic Party. One day it lifts us so high . . . remember November, 2008? Of course you do. But then it wins and it tries to govern. And suddenly it gets completely torn between the interests of its grass roots supporters, and those of its corporate, big money sponsors. It tries to walk that narrow line and it falls on its face. And then we get Scott Brown. And then we do the bleeding.
I’m not going to detail here any further what’s wrong with the Party. If, dear reader, you don’t think anything is wrong, I would suggest that you save your time and your eyes, and read no further. But if you are fed up with the right wing drift, lack of coherence, and/or governing incapacity of the donkeys, then here’s what you can do about it this very Spring: BECOME THE DEMOCRATIC PARTY IN YOUR NEIGHBORHOOD.
Well, everyone, Happy New Year. Now buckle up; we’re in for another rocky ride. Here’s the news that you’ve been waiting for according to yesterday’s Daily News:
With the holidays over, city budget season rears its ugly head.
And while the economic freefall of the past 18 months seems to have stabilized, Philly's dark financial days are not over as tax revenues continue to lag and costly union contracts are looming.
It seems that we have this little problem. Those greedy city workers want a salary increase, and don’t necessarily want to let their pensions and health care benefits drown. Wage tax receipts are likely to be down $50 million this year. Every Department head has been asked to come up with budgets that are down 7.5% from this year’s already shrunken totals.
I can't vote for Brett Mandel for Controller. I've said that a few times before on this blog and given reasons. But today I want to explain why Brett can't ever get my vote from a bit of a different angle. And that will require a little digression. I hope you'll bear with me. Because this Controller's race squarely raises the question of what kind of Philadelphia we want to live in.
Brett Mandel wants to cut Philly taxes for all business -- eliminate them really -- because he sees one business as good as any other. He wants to bring as many businesses here as he can, and to assure that once they're here, they stay. I don't.