Recurrent Crises: Budgets

A new day, and a new way and an old crisis. I am sure we've all noticed that Philadelphia's budget problems reoccur every 10 years or so, no matter who is at the helm. A rethink of what should be taxed and how taxed must be at the heart of any and future current debates and policy.

Every crisis puts the most vulnerable programs and people at risk. Why them? Well, they don't have a constituency and advocates with ideas that move beyond traditional nostrums.

How about this idea. Just for thought then action?

Philadelphia's Budget: Everyone's Right

Mayor Nutter’s announcement of today is understandable, yet also avoidable. Understandable because the traditional reaction to an economic downturn in government is to cut services, lay off workers and rethink taxes. Avoidable because all options should be on the table, but are clearly not.

What we learned in this budget round.

We learned some good things.

We learned that Mayor Nutter is not the complete ideologue he often seemed to be while in Council, on the issue of business taxes. Then he tried to mandate into law the complete abolition of the main business tax, the BPT. He did this repeatedly and relentlessly, and fortunately he failed. Now, in his first budget as Mayor, he proposed much more moderate BPT cuts, abolishing the gross receipts portion over 8 years, and cutting the net income portion by 12% over the same period of time.

Even more encouraging, when the Mayor learned that the City had a revenue problem due to the recession, he proposed that Council slow the BPT cuts even more. Council followed his recommendation, so now it will take ten years to reach the Mayor’s target, rather than the 8 years he initially suggested.

Health Centers! Emergency Care! Increasing support for Public Health

PUP members supporting the city's efforts to bring in more Federal funds on 4/14/08

In the present economic downturn, many states have decreased their spending, particularly in the area of public health. That's why it's gratifying to see City Council, the Department of Public Welfare and the General Assembly working together to bring more dollars into the state so we can actually improve care for the Uninsured and Medicaid eligible population in Philadelphia.

Quick Fact! Just because a person has Medical Assistance Health Coverage, that doesn't mean they can find a doctor! Most doctors around here refuse to accept Medical Assistance, that's why the Federally Qualified Health Centers and the City's Health Centers are so important.

Council took the first step yesterday to move a plan that will move millions more dollars into our hospitals and health centers. PUP is especially excited because the Department of Health believes that these new funds should enable them to bring wait times at City Health Centers down to less than 30 days and improve health care by implementing electronic records throughout all city facilities (including jails and youth centers).

More details in the jump!

I'm moving to New Jersey

I spent many of my formative years babysat at the knees of my grandparents and aunts and uncles in South Jersey, and I never once thought I'd volunteer to move there. I love my family don't get me wrong, but I hated how they would always call our city "Philly," and complain about the taste of our water, and were generally down on the urban environment.

But, as much as I love Philadelphia, after 28 years it's finally occurred to me that maybe they were right. Except it's not Philadelphia I find fault with, but Pennsylvania.

New Jersey is a solidly blue state, and they are consistently on the cutting edge when it comes to progressive public policy. From civil unions for LGBT people to liberalized absentee voting laws to a very progressive income tax to abolishing the death penalty, you've got your pick of concrete progressive legislative accomplishments to chose from in NJ.

And yesterday's really topped the cake: New Jersey became one of only three states in the nation to offer paid family leave to its workers.

From the Inky:

New Jersey's version would offer workers up to six weeks' leave to care for sick family members and newborn or adopted children. During the last legislative session, another version of the bill, which would have offered up to 10 weeks of paid leave, failed to clear the legislature.

The current bill would offer workers leave at two-thirds of their salary, up to $504 per week, for six weeks. Workers would pay for the program through payroll deductions, which would cost an estimated $33 per year. Workers would be limited to one leave per 12-month period.

Federal law mandates most employers give workers up to 12 weeks of unpaid family leave, although companies with fewer than 50 employees are exempt.

Paid family leave is an essential plank in a 21st century New Deal for workers. Why?

Because when the first New Deal got started in 1933, many more households contained a full-time stay-at-home member. So when someone else got sick or ill, there was someone available to help.

This is not the case today as any of us who has cared for a sick family member can tell you. In an era where hospital stays are shorter, prescriptions are handed out like candy, and the procession of home care workers into the home of a sick family member can make your head spin, it's necessary to have someone else around full-time.

But without paid leave, when one of the worst aspects of our conversion into a service economy is that vast numbers of workers no longer have sick or vacation days, a lot of people care for their family members in lieu of earning wages, and in some cases, give up their job to do so. Paid family leave addresses this problem.

There are also obviously a lot more women in the workplace today than in 1933, which makes paid family leave an essential worker benefit for any female employee who wants to give birth. Not to mention the fact that starting a family via birth or adoption interferes with work in almost every scenario you can imagine (one parent or two, gay or straight) since we all work a lot more more hours than did our forebearers.

Paid family leave allows families to stay fiscally secure during rough times which, in the long run, benefits our shared economy. It's a shame that states are having to slowly fix this the lack of paid leave in the "landmark" FMLA bill Clinton got passed back in the 90's, but it's heartening that it is happening, and happening right across the river.

In short, I heart NJ's paid family leave.

We need this here too. Dollar for dollar, New Jersey is really setting itself up as a competitor with our region for jobs and residents in a very significant way. Decent home prices, good schools, paid family leave (and for me civil union laws) are all just a PATCO ride away in New Jersey.

And the chances of us getting all (if any) of the progressive reforms they've put in place soon are slim. So unless we decide to secede soon, it might be time to call a real estate agent...

Governor Rendell and the Hidden Costs of Casinos

Governor Rendell has grown increasingly isolated as a politician still openly advocating for the development of SugarHouse and Foxwoods casinos in Philadelphia. Not only has he dismissed and become increasingly hostile to the residents who oppose these developments but he has also failed to provide a solid cost/benefit analysis to back up his claims of the economic benefits of casinos.

Governor Rendell claims that casinos will bring 7,000 new jobs into the city while an independent study by Temple economics professor, Fred Murphy, shows casinos could create net job loss of 5,900 jobs. Rendell has budget only .001% of casino revenue to deal with gambling addiction when it could cost the city up to 2,000 times more to deal with the impact of those new addicts. Many of the studies done to date give no estimate for costs of things like reduction in property values, medical emergency services and other municipal costs, reduction in taxes from businesses that close due to competition with casinos and the opportunity cost of using the Delaware Riverfront for other projects.

These numbers have led many people to believe that the figures that the Governor has been using to promote casinos as a panacea for the economy are grossly overstated and misleading. For the past few weeks, Casino-Free Philadelphia has been on a campaign to create more accountability to the hidden costs of casinos. On April 10th, Casino-Free Philadelphia will be gathering at the Governor's Philadelphia office for a "debate-in," (like a sit-in) and plan to stay at Rendell's office until he agrees to a debate on the costs/benefits of casinos. Casino-Free is inviting any member of the public who wants to come observe the action to show up on April 10th.

For more information go to or contact Lily Cavanagh at

Nutter's first budget

I had been thinking about Michael Nutter's first budget address for the past 24 hours and feeling fine... until I got an email from Brett Mandel this morning with the subject line, "Tax Reformers...This Budget's For You!" I thought we might be in trouble after all, but another review of the Mayor's address, and it seems like we're gonna be ok. That said, there are two things Mayor Nutter has proposed which could become very big problems:
  1. He sets aside a specific amount of money for city contract negotiations with unions--no more--while relying on a bond to deal with city pension obligations.
  2. He proposes cuts to the net income portion of the Business Privilege tax.
The problem with the first point is we don't really know if a bond can work. As the Inky reports today:
"It is a creative solution, and that's a good thing, but there are lots more questions that need to be answered before we know if it'll work, when it'll work," said Uri Monson, executive director of the Pennsylvania Intergovernmental Cooperation Authority, which oversees the city's budget.
We also don't know what the city employee unions are going to be asking for just yet, and without the knowledge, it seems a bit inflexible to name a dollar figure now. Remember, the city is the largest employer, and any drastic change to the livelihood of its employees can have a big impact on our entire region's economy. The problem with the second point--and Jennifer and Dan pointed this out last week--is it is hard to support cuts to the net income tax without knowing how it currently impacts businesses in real numbers. I am sure the Mayor knows of course--since he is privy to data from the department of Revenue that would indicate how the tax is affecting different kinds of businesses--but we, the public, do not.

In the spirit of Mayor Nutter's "new day, new way" approach to open records and transparency in government, Jennifer wrote a letter to the Department of Revenue requesting this data. After all, there is growing evidence that for the very largest corporations, despite a real or perceived high business tax burden here, other factors like proximity to roads, train stations, cultural events, restaurants, etc. have been more important factors in making decisions about business relocation. And, perception often trumps reality when in comes to the free-market, and Nutter sent a pretty strong message that will change the perception of Philadelphia when he said this at a Chamber of Commerce luncheon:
"The doors at City Hall are now open," he said, in a silent nod to the strained relationship prevalent during the Street administration. "You will always have a friend at City Hall."
That's not to say that business taxes do not matter--and I think we all agree that our business tax structure seems uneven at best. But without a public release of the data, it's hard to know how serious of a problem this is, without relying solely on anecdotal information. Despite these potential problems, you have to give credit to Nutter for proposing a budget which:
  • expands single-stream recycling
  • gives $3 million to city health centers
  • $4 million a year to CCP to expand its reach
That said, it is a humble budget, which makes sense for a first budget from a new Mayor. However, I have to express some concern that the entire Jobs and Economic development portion of the Mayor's speech really includes only 3 ideas: arts & culture expansion, tax cuts, and dealing with unions. For a city whose real wages have been on the decline every single year since 1969, and that has yet to produce a real economic sustainability plan for the future--as opposed to piece-meal economic development deals, often at the discretion on Council members--we could do better. However, as Nutter himself said:
We don’t walk into this process under the assumption that we have a monopoly on ideas, but we believe the proposals set forth here today will put us on a course for a safer, cleaner, greener city, where our children are protected and educated, where government performs its tasks in an open, honest and efficient manner and where performance is measured, improvements are made and services are delivered.
And until we see the line-item budget, that sounds good enough for now.

Memo to the Philadelphia Water Department

To: Bernard Brunwasser, Water Commissioner
From: Ray Murphy, thirsty Philadelphian
Re: Bottling our water

Hi! As I am sure you know, it’s budget time. Mayor Nutter will be proposing his budget to Council in just a few weeks. If it’s not too late, do the Mayor a favor—put a smile on his face—and suggest a way for your department to MAKE some money.

Like a lot of us, I like to hydrate, but when I am out and about, I hate carrying those Nalgene bottles (lose them) and I hate to buy spring water (spring water is a waste of precious resource that your department capably provides to all Philadelphians). So lately, I have been going thirsty or searching for water fountains, or every now and again, buying a bottle of plastic Aquafina or Dasnai water.

I hate to choose this latter option because: a) You can’t recycle plastic bottles on the street or in public places b) I hate to pay for what is essentially filtered, tap water.

I wrote a lot more about this a few months ago. Check it out here.

So, I think it’d be cool if PWD bottle the water themselves in returnable glass bottles—I’d love to choose to buy Philly Tap when I am out in public over the corporate choices or spring water. Water is one of the fastest-growing segments of the national beverage market, and since the city of Philadelphia does the bulk of the work in preparing it for consumption, we should also get the bulk of the profit. Not to mention the fact that water should be a public good anyway (as the Sierra Club lays out so clearly here.

I get that it might be easier for you to just tax Pepsi and Coke more for selling our tap water. And I don’t care which you do, but as a taxpayer, I want to see you guys collect the money that’s out there for water consumption, and I want to buy a water product that is guilt-free.

Our city needs all the extra revenue it can get after all. I’m no expert on water taxation or municipal water sales, but I think there’s something to be followed up on here.

What is UP with this guy?

Check out this article in the DN.

Green is trying to roll-back an agreement Mayor Street made with casino developers to allow them a property tax abatement in exchange for an investment in infrastructure--water pipes and stuff. Green says:

I can't see a public policy rationale for providing casinos a tax abatement.

I leave it to someone else to get into the meat of this matter (and it is an intriguing one: it was my memory that Street himself had originally not wanted abatements for casinos either, and somewhere along the way he changed his mind, but Green's point is solid).

But what is UP with Bill Green? Remember last week when he proposed eliminating DROP for elected officials. And the Inky reported this:

[Councilwoman and Majority Leader] Tasco said she liked Green and tried to "help" him Thursday with a resolution that dulled the sting from Green's DROP bill. She called for hearings to examine the larger impact of DROP before considering his action. Some saw that as putting Green in his place.

When you're new, there are a lot of nuances that you're not familiar with, and sometimes it's a wise move to get the lay of the land, get a feel for your colleagues, and get some history of the Council," Tasco said. "So what happened yesterday certainly was not an effort to spank him, but to help him understand that he should get the lay of the land first.

That's a nice way of saying she doesn't really like him.

The Inky already wrote an article in the 1/28/08 Inky article about zany Councilman Green, and how his colleagues are not cazy about him, so I am not so much writing about that.

It's more like I am wondering why this image--this notion of what Green would be like--didn't seem to get communicated during the campaign. I had no idea he would be like quite like this as a Councilman (and it doesn't hurt that he comes to every Liberty City meeting even though the election is over--Councilman Kenney never did that ;). He seems pretty cool so far.

Was I just out of it? Did anyone expect..all this...from him?

EMS Response Times, Dying on the Streets, Tax Cuts and the Controller

Poor, poor Stan Shapiro. He is currently on a vacation, out of the country, when stories with headlines like this come out:

"Butkovitz: Halt tax cuts, fix EMS"

And from the Inquirer, we get this:

Philadelphia's city controller - contending Mayor-elect Michael Nutter should be assessing city services before talking tax cuts - yesterday reported dangerously slow response times on emergency-medical calls.

"Most of the departments we look at, we see gaping holes in service," Alan Butkovitz said at a news conference in which he released a performance audit by his office of the Fire Department's Emergency Medical Services Division. "We're in the midst of this tax-cutting craze."

Nutter has pledged to enact tax reforms, including scaling back the business-privilege tax.

In response to the audit, Nutter's spokeswoman, Melanie Johnson, said "the mayor-elect wants to review the controller's report and will have a more detailed comment after he has seen it. In reference to the controller's recommendation to freeze business taxes, the mayor-elect is committed to improving the business climate while at the same time improving on the delivery of city services."

The controller said the assumption behind the "tax-cutting craze" is that city services are up to snuff. But the performance by EMS ambulances is one example of a service that falls woefully short, he said.

Stan, where are you!?!!?

As far as the EMS specifically, this is unfortunately not anything particularly new. Mike Newall, of the CityPaper wrote a cover story about our EMS problems two years ago, the Daily News did its own series, and Newall followed up last month, and reminded us of some people who likely died specifically because of slow EMS response times:

Danny Rumph, a 21-year-old stand-out guard at Western Kentucky University, suffered cardiac arrest on a Mount Airy basketball court and died after waiting 31 minutes for an ambulance. Ricky Badway, 22, suffered cardiac arrest at his girlfriend's house in Roxborough and died after waiting 22 minutes for an ambulance. Rotan Lee, a prominent education reformer, suffered cardiac arrest at his West Philadelphia home and died after waiting 19 minutes for an ambulance. And a 5-month-old baby girl suffered cardiac arrest in Wissinoming and died waiting for an ambulance that never even arrived.

"And these are just the cases the press knows about," says one paramedic. "This happens all the time. It's a silent epidemic."

We know about these, because they are the extraordinary cases- a local Division 1 basketball player, a prominent Philadelphian like Rotan Lee (Read Seth Williams' remembrance of him here), and a 5-month old baby. But, I think we all understand that for every case that is reported, many, many more go unreported.

So, Butkovitz undertook an audit of the EMS system, and came up with a long list of things needed to be done to fix the system. First, and foremost though, is hiring more paramedics, which will cost money, and appears to be the jumping off point for the first Philadelphia Politician in recent years to utter the phrase "tax-cutting craze" in recent memory.

Anyway, this is a big deal in this whole tax cut debate for a couple of reasons. First and foremost is that the last Controller, Jonathan Saidel, was basically the point man in so much of the debate. And second, Butkovitz is now, by far the highest ranking city official who appears to be getting off the BPT train. Maybe he will fall back in line, maybe not.

I think we need to take a few reasonable steps before cutting taxes:

1) A whole sale evaluation of city services, city departments, etc., to figure out exactly what our budgetary needs are- from EMS, to libraries, etc. This is often proposed by our very own Gaetano. Within that, there will be different levels of urgency- so, we will have to prioritize.

2) Unlike with the Street administration, our more Open-Govt oriented new Mayor should give us some detailed figures from the BPT cuts. What is the breakdown for BPT breaks? There are something like 75,000 payers of the BPT in Philadelphia. What percentage of this tax break goes to the top one percent (750) of businesses and top 5 percent of businesses? What percentage goes to the other 70 thousand or so payers? If the idea is small business job creation, and it only gives the typical small business a hundred bucks a year, then... you know where I am going with this.

At least then, with a little more information under our belt, we can at worst look at the situation, and agree to disagree on where our next steps should lie. At best, maybe we will even agree...

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