Interview with Brett Mandel

Over the course of a few days, Ray and I did an email interview with Brett Mandel. (We offered other candidates the same option, but, it didn’t work out. I will leave out commentary for now, with a little more on the race later this week. But, as you will see, we asked Brett the ‘toughest’ questions, because those are the questions that I have been asked myself about the race. This is long, so, click read more, and check the whole thing out.

YPP: Let's start with the toughest stuff first- Alan Butkovitz's attacks against you. I got a 'letter' from him that was effectively directed at you, in it he went after you both for tax policies as having starved the city of money, and he pulled out quotes from your book, purporting to be from you suggesting that we should set up a BRAC-like commission to, among other things, close libraries. Can you contextualize his attacks on your suggestions in the book?

BM:To make it appear that I favor the closing of libraries, my opponent purposefully misquoted me by deleting portions of the sentence that reference the opening of new facilities. Properly explained, I am for the rationalization of services delivery so that all Philadelphians have equal access to the services we all rely upon.

The language quoted by my opponent comes from my book "Philadelphia: A New Urban Direction," a comprehensive plan designed to make Philadelphia a preferred place to live, work, and visit. The book is still used in college classrooms throughout the region to study Philadelphia government. Since it was published, every mayoral transition team has relied on it to formulate their plans for the incoming administration. From this nearly 300-page book, my opponent has pulled a single sentence that he purposely distorted.

The language appears in a section of the book that discusses the "right sizing" of City government. In recent years, "right sizing" has become of euphemism for shutting down facilities. This meaning is not what I intended. Rather, the section from which the quote appears discusses the fact that many of Philadelphia's facilities were built a generation or two (or more) ago. What makes sense for a 19th-century city does not make sense for a 21st-century city. Many fire houses are still located at the top of hills because horses run faster downhill. With changes in technology and demographics, it is sound policy to periodically appraise the delivery of City services to determine whether certain areas are under-served and certain areas are over-served. My discussion clearly contemplates the opening of new facilities that are presently under-served.

To mischaracterize my position, Alan Butkovitz deleted language from the sentence he quotes that acknowledges our need to consider opening new facilities. The full sentence reads: "The City should create a BRAC-like commission, or endow the City Planning Commission with BRAC-like authority, to examine the City's inventory of physical assets to determine whether certain facilities could be deaccessioned and whether necessary new construction could consolidate two or more function currently housed in separate facilities."

My opponent's purposeful mischaracterization comes as no surprise as its completely in line with the tactics he has pursued while in office. By putting politics ahead of his legal obligations, he has destroyed the credibility of his office. In this time of fiscal crisis, he has denied Philadelphians access to crucial information we need to make decisions about how our scarce tax dollars are being spent.

YPP: How do you make those of us who think you are very qualified to the City's fiscal watchdog, but who disagreed so strenuously with you on tax policy, comfortable that we are hiring Brett Mandel, auditor, not Brett Mandel, tax advocate?

BM: Setting tax policy is not the Controller's job. That is the job of City Council and the Mayor. The job of the City Controller is clearly defined by the City Charter. The Controller must audit every city department annually. I am running because I intend to do this job.

The current Controller has refused to perform his legal obligations. In a recent Inquirer article, Butkovitz justified his refusal, and left a reporter with the impression that “annual audits are more or less a waste of time.” (Inquirer, 4/22/09). As demonstrated by our current budget crisis, audits are not a waste of time. His inaction has left the Mayor and City Council ill-equipped to make crucial decisions.

As City Council and the Mayor spar over the 2010 budget and discuss a hefty increase in Real Estate Taxes or Wage Taxes, the current City Controller has performed no audits of any city department for FY2008. To date, he has performed only six departmental audits for FY2007. Without crucial information about how our tax dollars are being spent and where efficiencies may be found, we are not able to find many solutions to the current budget crisis aside from service cuts or potential tax increases. This is a severe problem and city taxpayers are going to end up footing the bill for the current Controller’s decision to abandon his duties.

With that said, I will address your concerns about my personal advocacy. Philadelphia suffers many ailments. An alarming number of residents live in poverty. Our schools are failing over 50 percent of our children. Our streets are, too often, dirty and unsafe. I believe that the long-term solution for these problems (that are each symptoms of Philadelphia's poverty crisis) is the creation of jobs. To enable the creation of jobs, I believe that Philadelphia must become more competitive in terms of the costs presented to employers -- especially small and growing firms.

YPP: Can you justify the need for the Controller's office as it is currently chartered? (I tend to lump all the row offices together in my head as vestigial organs--I'm not saying that's right, but just sort of where my general thoughts are)

BM: President Obama recently issued a challenge to America's Mayors. He stated: "What I will need from all of you is unprecedented responsibility and accountability on all of our parts. The American people are watching. They need this plan to work. They expect to see the money that they've earned, that they've worked so hard to earn, spent in its intended purposes without waste, without inefficiency, without fraud."

President Obama recognizes that unless Americans trust that their tax dollars are being well spent, the constituency for change he built will quickly evaporate and we'll never be able to achieve crucial policies like universal healthcare. The same principle applies to local government.

Trust is the Controller's job. An active, engaged and impartial Controller is necessary to ensure Philadelphians trust their money is being spent well.

The office is not a row office. Along with the District Attorney, the Controller is intended to serve as one of Philadelphia's two watchdogs. Like the DA, the Controller is elected at the mid-point of the Mayor's term so as to establish a Madisonian tension between the Mayor and the Controller.

However, over the years, the Office of City Controller has been co-opted by Philadelphia's political insiders. We have forgotten the crucial role the Controller plays in ensuring Philadelphia remains progressive.

Ultimately, if we are going to have a progressive government, if we are going to sustain a belief among voters that government can be a positive force in our lives, we must re-establish trust in City government. Trust is a necessary prerequisite for progressive policy action. Trust is necessary for collective action. Regardless of what type of collective action we wish to undertake, taxpayers will not support progressive policies if they do not trust their government officials.

YPP: How do you see the controller's role in corruption and waste interacting (bad word choice, but I think you will see what I mean) with others in the city who potentially have similar duties, ie, the Inspector General, the DA's office, etc?

BM: Concerning instances of crime or fraud, the City Controller and the DA's office should work in concert. I would immediate refer such matters to the DA's office for criminal prosecution.

Concerning instances of waste or inefficiency, my duty would be to report such matters to the public and work with city departments to ameliorate such conditions.

As for the Inspector General, the office is largely a replication of duties that should be performed by the DA and Controller. It was created largely because the officials elected to the DA's office and the Office of the Controller have failed to fulfill the duties of their offices. This replication of duties is in and of itself a waste of tax dollars. If Philadelphia was to elect a DA and a City Controller who would perform all of the duties of their office, the Inspector General would be rendered superfluous.

Because the Inspector General serves at the pleasure of the Mayor, I believe that the office is necessarily a second-best solution. Furthermore, the IG only has authority to review departments under the Mayor's direct control. In contrast, the City Controller answers only to voters and has authority to review the entire city government. Because of the Controller's independence, he or she is insulated from any pressure a Mayor may exert to look the other way when investigations may impact the Mayor's interests. Philadelphians would be much better served if we elected an active, engaged and truly independent City Controller.

To be clear: follow-up with Brett

Hi Brett,

So you say:

the current City Controller has performed no audits of any city department for FY2008. To date, he has performed only six departmental audits for FY2007. Without crucial information about how our tax dollars are being spent and where efficiencies may be found, we are not able to find many solutions to the current budget crisis aside from service cuts or potential tax increases. This is a severe problem and city taxpayers are going to end up footing the bill for the current Controller’s decision to abandon his duties.

Are you saying that via audits you think that the Controller could have found excess costs to cut that would have eliminated the $200 million FY 10 projected budget?

Along the same lines, you did not directly answer the charge from Butkovitz that Dan brought up: the amount of wage and business tax cuts added together is more than our current deficit, correct? If those cuts had not been made, do you think we would have a deficit today?

Are you are doing the math right Ray?

to figure out the budget cost of past wage and bus tax cuts on the current budget you can't add up each each successive year, you have to look at what collections would have been for this year and figure that they also would be reduced by the overall economic slowdown proportionally. I don't think Butkovitz is doing the numbers right if he's saying what you say he's saying.

Honestly, I have not looked at the numbers personally besides a quick glance in newspaper coverage back in Nov. for budget crisis round 1 but as I recall wage tax collections were pretty steady at least so far but biz tax collections were down more significantly due to the economic downturn than as the result of biz tax rate reductions. Roll backs would not have covered the loss due to the overall declining economy as I understood the analysis I read.

Maybe Brett can answer however.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

A math whiz...

i am not.

But yeah I am pretty sure that the wage and BPT reductions added up since 04 would be worth more than $200 million. The wage tax alone has been reduced by like 3/4 of a point. It may be less than that, but the bottom line of Butkovitz's attack is that Brett's advocacy for tax cuts wrought a budget deficit. I am not sure I agree with that. There are some pretty big economic factors in the mix here and the 10, 20 or 30 million allocated toward tax reductions would have probably been spent rather than saved, but it's still a question I would like to hear Brett himself answer.

Well that was exactly what I was aiming at

You can't add up the numbers since '04 to mean anything besides a fanciful case of math creativity. You can reliably say if you adjust a percentage of any particular tax for one year, that for this year and maybe next year you would have have gotten this much more or less revenue. But Brett and other supporters of strategic BPT reductions would argue that those cuts stopped some businesses from fleeing Philly and encouraged others to go ahead take a chance on Philly. As he points out, every year they reduced the BPT actual revenue to the city in terms increased because there was more overall economic activity to tax.

So that one fundamental logical problem with stacking up those biz tax cuts like that. The argument for those cuts says that even beyond the competitiveness it adds to the city, its symbolic value brought or saved more businesses, more biz taxes, more wage taxes. So less cuts would mean a smaller pie to cut a slice from. This argument has gone back forth a million times - but most folks on either side acknowledge that local biz tax cuts do have at least some impact on whether a business locates in MontCo or sticks it out in the city. And if you accept there is any level of connection between local biz taxes and the amount of business being conducted in the city those biz tax cuts would be offset by their compounding positive effect on wage tax revenue, sales taxes, licensing fees, construction permits, etc. Like I said, this argument goes back and forth, but in terms of the concrete analysis of the actual data that is available those cuts did have some beneficial results. Every year they cut them, actual collections increased - not decreased.

Logic problem #2 is its a piece of fiction to suggest that in a real-world budgeting environment that all the extra revenue from XYZ tax or fee would ever be set aside in a proverbial "locked box" each and every year untouched until it gets spent all at once this year. It would get spent some place along the way. I mean if I stopped buying large coffees and saved the 50 cents of buying a small everyday over the course of years theoretically I would have enough to buy the entire coffee shop but thats not how budgeting actually works. Number one the 50 cents gets spent some other way, number two in government budgets you have to keep rebuying that coffeeshop every year in perpetuity. Our budget problem is not just for one year, because next year we still have to try and pay for all the same things and some of them - particularly employee benefits including 5 different health plans and DROP - keeps costing more and more at a rate much higher than the cost of inflation.

Even for purposes of a thought experiment you can't add up a highly debateable estimate of each year's "extra" for five years and spend it all in one year and pretend you are not comparing apples to oranges. This year's money is this year's money and next year's money is next year's money, whether its a surplus or deficit.

You could also argue that over the same times that if the city had replaced every light bulb with compact flouresents and channelled every cent in electrical savings into paying down the pension fund we would have a big giant surplus right now. A quarter of the municipal budget goes into making up lost ground on the pension fund and the fact that we were already behind made the impact of the downturn of the stock market worse. Business taxes, cuts or no cuts, would never have equaled a quarter of the city's revenue. Why not argue that bad financial management of the pension fund caused the budget deficit? Why focus on one anymore dogmatically than the other?

Actually it kind of bugs me that anyone running for Controller would so mix up something as fundamental as total of 5 years of tax revenue and one year's worth of deficit. So yes, Butkovitz is playing logical games with the numbers he knows, or should know, to compare cumulative tax revenue on one tax to a single year's deficit.

Bad math, adding 5 years of apples to equal one year's orange of recurring costs.

-Sean
MrLuigi, my cat, actually only types half as badly as I do.

What the numbers mean

I've been a supporter of sensible business tax cuts over the years where sensible (1)means cutting taxes that actually harm our economy as opposed to cutting for the hell of it and (2) replacing revenues with better taxes than the BPT such as a PIT.

But I would not say we have the clear evidence that cutting the BPT worked.

Or, at the very least, I want to point out that the one piece of evidence that Brett and Sean point to--that BPT revenues kept going up even though rates were cut--is irrelevant.

Of course they went up. The economy was growing. The question is did the economy and BPT revenues grow faster than they would have without the cuts.

People say there is evidence that this is true. I recall reading a study by Inman that provided some such evidence for the wage tax and if I recall correctly, somewhat less convincing evidence for the BPT. I would think that the folks who champion business tax cuts would have this evidence at their fingertips instead of constantly reiterating an irrelevant fact.

Of course, if you want us to believe that growing BPT revenues were due to tax cuts, then you need to accept that the whole BPT tax cutting program has a been a fiasco because BPT revenues have dropped in the last year.

Ah...that you say is the result of the bad economy. Growing revenues are caused by tax cuts. Declining revenues by a bad economy.

Or, in other words, head I win, tail you lose.

For the record

I think you are right, Marc. Ultimately in the real world, its impossible to completely isolate the impact of BPT policy on the city's overall economic health from a thousand other factors simultaneously at play. The real economy of Philadelphia is a complex amalgam of national and local trends. Local factors include tax policy but also perceptions of corruption and an inoperable bureaucracy that only works for those who "know somebody". Lack of an educated workforce, the "how" of licensing and permitting, safety and the level of public services all play a factor. So while I do think the BPT, both its level but also how its structured, play a factor in Philadelphia job loss, I never, ever, ever argued it was the whole picture. Brett's answers above indicate he doesn't think its the only factor either.

Corruption, both real and percieved, doesn't just cost in terms of direct waste but in terms of businesses and jobs it scares off. The mess at the BRT doesn't just mean that homeowners picked up the slack for deals given to the Ritz-Carlton. It means that hundreds of businesses that didn't get the Ritz-Carlton "special treatment" all shook their head and thought "Do I even want to mess with that morass of back-dealing and political handouts?" While the opportunity cost of taxes you can actually call up the Revenue Dep't to figure out are a factor, the opportunity cost of the undeclared "taxes" of needing to maintain "friends" in city politics is far greater because its impossible to quantify. "Is this city department not working because its simply disfunctional or is it because we didn't send the Councilperson/Wardleader/Party Chair a christening gift for their grandkid?"

One on the biggest problems with corruption in terms of economic cost is that it camoflages itself as mundane bureaucratic hassle and needs a constant background of this more mundane bureaucracy to avoid standing out and drawing attention to itself. As a result it makes all the more mundane forms of bureaucratic hassle and inneficiency seem corrupt and malevolent because when you are standing on the outside, its just one big murky mess you would do better to just avoid. A little corruption makes a whole lot plain old inefficiency seem more tainted, more unfixable than it actually is because the whole point of corruption is to not advertise itself.

Which to bring this back to Brett Mandell and the Controller's race is why budget transparency really, really, really matters for Philadelphia to thrive and offer the same or better opportunities for the next generation of Philadelphians as have been there for this generation. In a world where the economy is increasingly globalized, and internet-driven, a city government that only works well for a few that know the secret metaphorical handshake to get it to go is an albatross around the City's neck.

Philadelphia needs a Controller who will work as hard as Brett will to root out waste because Philadelphia has a tremendous perception problem (a lot of it well deserved) to overcome if its going to survive and thrive economically.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Now you are talking

I've always thought the inefficiency and complexity of the city's role in regulating business was more costly than the BPT although, as I've pointed out before, the BPT as currently structured probably makes life difficult for start up small businesses.

And, of course, inefficiency and complexity is not an accident. You can't make political allies and garner campaign contributions if business people don't need political support from political officials to wend their way through the system.

And that's why it's so critical for the Controller and others to keep shining a light on every part of city government on a regular basis.

Brett, himself, answers

Ray:

You asked two specific questions.

Are you saying that via audits you think that the Controller could have found excess costs to cut that would have eliminated the $200 million FY 10 projected budget?

We cannot know because the Controller has completed no departmental audits for FY 2008 and only a handful from FY 2007. The $200 million number represents about 5% of the city budget. Do I think that legitmate audits of city agencies could yield 5% in savings? Yes.

As one example, the current Controller created an Office of Community Affairs in the Controller's Office to do outreach and constituent services and it is headed by the Controller's campaign treasurer who makes more than $90,000 each year. This is waste. The Office of Community Affairs costs us more than $300,000 in salaries and fringe benefits...about 5% of the Controller's Office budget.

Along the same ways, you did not directly answer the charge from Butkovitz that Dan brought up: the amount of wage and business tax cuts added together is more than our current deficit, correct? If those cuts had not been made, do you think we would have a deficit today?

Maybe I don't understand your question, but I think the phrase repeated in the original question ("tax policies as having starved the city of money") is factually incorrect. During the years when the city reduced the Wage Tax rate and the Business Privilege Tax rates, city tax revenues INCREASED, and increased at a rate higher than inflation. The reduction in city tax revenues that has accompanied the international financial collapse has been confined to two taxes...the Realty Transfer Tax and the Business Privilege Tax and the revenue loss is connected to the financial collapse and not local rate changes (the RTT rate has remained the same before, during, and after the collapse; the BPT losses FAR exceeded the rate reductions).

For me, the only compelling reason to reduce tax rates is to grow the tax base and then grow tax revenues so we can invest in the programs that will improve life in the big city...that is exactly what happened for more than a decade of tax-rate reductions before last year. That is why, when the economy collapsed, I supported the move to halt the tax-reduction program (those reductions would not yield increased collections because the tax base had been affected by the downturn).

I hope that helps.

Brett

Brett Mandel
Democrat for City Controller
www.brettmandel.com

Thanks Brett!

Appreciate you taking the time to answer.

Can't reply in detail now

because I'm in transit. I will on Sunday when I'll be back. But I'm glad Brett honestly said this: "For me, the only compelling reason to reduce tax rates is to grow the tax base and then grow tax revenues so we can invest in the programs that will improve life in the big city...that is exactly what happened for more than a decade of tax-rate reductions before last year."

Brett still believes this from the bottom of his heart, that business tax cuts are the key to local economic growth. Anyone who agrees with him on that should vote for him. But anyone who doesn't should expect that Brett will do everything he can to promote that viewpoint in every possible way as Controller. He will also promote that view in every subsequent political office he attains, using the Controller's position as his launching pad. He will do it while assuring us that he shares all of our values. And maybe he does. Unfortunately his policies will allow the City to attrit our services away. So Buyers Beware.

OR if from the bottom of one's heart and from one's experience

one knows the City Controller does not control taxes but does control auditing, one might base one's vote on whether Brett Mandel will audit more accurately and more vigorously the City's Machine than will Alan Butkovitz.

And whether the greater governmental transparency a Controller would bring the City if he were to post the City's expenditures online, as Brett intends, means anything to one.

Yeah much beter to defacto endorse someone "politically attuned"

Or at least that was your choice of words to describe Butkovitz, Stan.

In your travels did you by chance get a chance to read this piece on the Parking Authority, Stan?

Also recent coverage in the Daily News on the Controller's race has been worth checking out a well.

Making excuses for keeping ethically compromised elected officials in office because of concerns over the views of who you admit to be the best qualified candidate on something their office has no legal say in anyway doesn't sound like smart shopping to me. Buyer beware, indeed.

BTW- since your preffered Controller candidate took 30% of his campaign cash from the IBEW, will you be also be endorsing McCaffery for DA? The Ethics Board recently found him to be quite "poltically attuned" as well, I note.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

I'm not rising to the bait Mr. whoever you are

but I'm encouraged that mostly what you do when I post is mischaracterize my statements, make weird assertions about postions you think I take, or assume you know who I'm voting for. In the Controller's race, for instance, there are three candidates and the opportunity for a write-in. If I'm against Brett, a smart person like you undoubtedly knows, that doesn't mean I support your favorite candidate to be against.

I'll say more on the Controller's race on Sunday. But if you feel like you want to make me the issue some more in the interim, go for it. I'm sure that will have a great impact on the voters.

Btw, although it's tiresome to correct your stupid assumptions about me time after time, Neighborhood Networks endorsed Seth Williams for D.A., and, enthusiastically, so do I.

You did praise Butkovitz as "politically attuned"

On this very forum, what two posts ago. Do I have to link to it?

I'm just making a point about an inconsistency I see in the political compromises you seem willing to make for a singular difference you have on a piece of policy the Controller doesn't have any legal say in anyway. Its not a compromise on getting the best "good government" Controller I would be willing to make if I were in your shoes. I know Neighborhood Networks endorsed Seth Williams. I was at the press conference where it was announced, silly rabbit. I also notice that South Philadelphia Neighborhood Networks, ADA and Philly for Change all endorsed Brett Mandel so a good number of progressives in this town seem to take the wider view on this subject. Maybe sometimes its worth looking at the wider issues, Stan.

Also you don't really need to call me Mr.Whoever you are, Stan. I sat in the room with you on some of those early Neighborhood Networks Steering Committee meetings, way back when. You didn't hesitate to call me personally for a meeting back during the library closings fight. We aren't complete strangers.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Whoever you are, why not end the suspense and simply

identify yourself. Anonymity is fine if you want to discuss issues that you can't publicly. But it stinks if you use it to attack people and leave them guessing who you are. Despite your hints, I still don't know who you are because no one I know has so wildly distorted my beliefs, at least to my face. And if, as you say, we know each other, then I'm triply amazed at the ideas you've attributed to me because you obviously know better.

So quit the personal attacks from behind your mask, or drop the mask.

And btw, I did say (something to the effect) that if I had to choose between a routinely political official (Butkovitz) and someone entirely captured by the business elites (Brett) it would be a tough, and bad, choice. But that comment was hardly praise or, much less, endorsement of Butkovitz. I've had nicer things to say about Brett. And I'm definitely not voting for him.

Oh, and if you're finished campaigning against me, do you want to address why Brett, still never deals with the issue of all the businesses who pay the gross receipts tax even though they are not in Philadelphia? To repeat, it's an issue because these companies are ALREADY NOT HERE so they CANNOT BE CHASED AWAY. Why doesn't Brett address that when he renews his claims about the job-killing aspects of the gross receipts tax?

Thats kind of polite language for a guy

who essentially does the exact same slimey thing everyone is screaming and yelling at the BRT for. Misdirecting funds directly from our starved schools for defacto campaign staff may be "routinely political" to you, but to me its a travesty. The fact the same campaign manager who gets handsome contracts out of the School's budget for PR work done for the Controller also takes money that should be going to the schools at the other end for overly compensated PR work for the Parking Authortiy doubles the damage. Then when you figure the political allegiances and crossed agenda means that investigating the mess at the Parking Authority has been dragged on for years, thats a perfect trifecta of politicos stiffing our schools for personal gain. Butkovitz spending the better part of 2007 actively campaigning against standardized assesments, essentially putting the full wieght of the Controller's office behind maintaining the status quo of "funny business" over at the BRT, is a fourth strike against any sane definition of how our city should be run.

Frankly, to me, its an absurd degree of "settling" and far, far from "progressive" to use niceties like "routinely political" for whats been practiced under Butkovitz. Your mileage may differ but I think thats likely more a reflection of old bruised feelings than a rational analysis of the pros and cons of the situation.

RE: the name. Since you seem to be having a decidedly hard time putting a face to what I feel has been a pretty consistent and some would say hyper-articulated viewpoint, the last name is Dorn.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

I didn't think you could actually stop campaigning against me

because you have no answer to what I've been saying about Brett. What is this crack supposed to mean?

Your mileage may differ but I think thats likely more a reflection of old bruised feelings than a rational analysis of the pros and cons of the situation.

"Mileage?" "Bruised feelings?" What on earth have those weird statements got to do with this race? Is that supposed to help the undecided decide? You apparently have a pretty low view of the electorate reading this blog. Here's another chance to deal with what voters might actually be interested in: please explain why Brett has kept ignoring facts about who pays the gross receipts tax -- including in his recent interview on this blog -- in promoting its repeal over the last 10 years.

And Sean, I thought it was you, but I was hoping not. Too bad.

No i've responded to your point repeatedly

1.) policy on the GRT has everything to do with City Council, absolutely nothing to do with the job of being the Controller so its this huge red hering. You keep coming back to a point you didn't get together when you testified in front of Council years ago. Its a total non-sequiter to this race

2.) Your proposal to build in the exemptions for the GRT may face very serious legal challenges on the uniformity clause. I think you undersell how serious those legal obstacles are but the only way to test if it would hold up in court is if get you Council to pass the law and then have it survive the legal challenges from some of the no doubt best funded law teams that money can buy, very likely up to the state Supreme Court. Two giant ifs that have absolutely nothing to do with the Controller. So in short you want people to decide the basis of a very important elected office based on an as yet hypothetical tax scheme that may very likely not even fly, that BTW has nothing to do with the office in question. Its the logical equivalent of picking your D.A. - in a city with homicide rates like we have -based on their preferred model of a Federal carbon emissions cap and trade proposal. Again a huge, huge distraction from the issues at hand.

3.) Call me crazy but at a certain level, I believe in the idea that there should be no taxation without representation so your unbridaled glee at the idea of City Council taxing people and businesses who aren't actually in the city strikes me as in a very, very small way innately unfair. If you want to push for redistributionist practices at a national level I'm with you 110% but yes I do think there is possibly a small problem with a tax scheme where the "big idea" is in essence to poach municipal tax sources from other municipalities.

Federal redistribution at a certain level historically has worked pretty well, the historical track record for city government in terms of what gets lost to political corruption, not so much. To be absolutely frank, I think I am probably not alone in trusting Federal programs under the watchful eye of the GAO to tend to sometimes follow the money down more effectively than I do the team of self-servers currently giving themselves DROP in violation of the clear intention of the law.

At the very least the plan invites and antagonizes the perception that Philadelphia is a fiscal black hole of waste and mismanagement sucking up resources from other areas that sometimes plagues us in our dealings with state government. I disagree with that view, but I know it exists and pervades our every interaction with state government. I fear your unbridaled joy at taxing businesses that aren't here may worsen a touchy situation with the politics of Philly getting its fair share of sorely needed state funding.

To be perfectly clear those are all my own take on the matter and they are concerns, not final evaluations, but I do think they are issues you have so far neglected to address. I think you will likely have to address them before you are likely to get any real traction in City Council (please note - I said City Council not the Controller's office since they actually write local tax code).

-Sean
MrLuigi, my cat, actually only types half as badly as I do.

More on the Controller's race tomorrow, but for now

1) So you think Brett will not use his bully pulpit to advance his beliefs about how to advance economic growth in the City. I don't think there's any doubt that he will. For instance, there is the Commerce Department. What if Brett finds that Commerce Department programs aren't very effective? Do you think it's possible he might mention -- loudly and with great PR -- an alternative theory or two for enhancing economic growth? Really, it doesn't take much imagination to figure out how Brett can deal with any policy issue he wants from the Controller's chair.

2) The idea of exempting small business from the gross receipts might not even be litigated. It doesn't have to be tied to higher rates for other businesses. Harrisburg has had a two tiered system for years. No lawsuit was ever filed. However yes, some risks might have to be taken, but then total tax abolition may be a bigger risk. More importantly, especially given the "transparency" angle of Brett's campaign, the voters have the right to know who currently pays the tax. They have the right to know that if the City cut the tax for small payers, it would still receive 90% of the revenue it gets now. And about that "job-killing" thing. People have a right to know how many of those "job killer" companies are outside the City and would get no benefit -- and therefore no incentive -- from a cut in the tax. Yet Brett in his official position on the Tax Reform Commission did nothing to get that information out. And since then he's opposed legislation, introduced by Councilwoman Sanchez last year, that would let the public know which companies pay City taxes, and how much.

3) On the "taxation without representation" thing. I guess your position against taxing the unrepresented means you're against the hotel rental room tax, the rental car tax, and the non-resident wage tax. Oh, and I guess there should be an exemption from paying the real estate tax for owners who don't live here. In reality, these taxes -- and the gross receipts tax -- are paid by people who choose to engage in economic activity with the City or its residents. That's all there is to it.

OK Stan, as tiring as this is to me for everyone else its worse

1. If your only worry is Brett campaigning for better mix of services as compared to the tax burden surely the stupidest thing you could do strategically is only to allow him access to working at it from the competitive tax reduction side. He's already shown he's pretty effective at putting a case together from that angle but from the Controller's office his chief and sole duty is to audit how the money is used deliver better services. The entire focus of his job becomes about getting the most effective use what revenue we do have. Frankly, a year ago, I would wager more average Philadelphians know vaguely that Philadelphia Forward is a group that works on fairer. more standardized property assesments than could tell you what the Controller does or that his name is Alan Butkovitz, so it strikes me that this whole "bully pulpit" argument is a big red herring. The Controller's office is designed to be a "bully pulpit" but for one thing - to make sure that Philadelphia is spending its money effectively - not to write tax policy. On that front Brett would be working in your favor.

Brett's argument has always been not that collecting taxes per se is bad but that Philadelphia suffers competitively from a perception that you pay a lot of taxes and that the level of city services and benefits of location you recieve in return is simply not an attractive trade off. As a result, we continue to lose both jobs and population overall. Keep him on the outside and the full force of his focus is only on the side of reducing the tax input because he has no ability to make the case for how we can get more out of the revenue we have. Allow him the Controller's office and his focus - by the very definition of the job - is about attacking waste and getting the most out of the revenue we do have - the part of the agenda strategically you should agree with him on, Stan.

We all want better schools, safer streets, clean streets, rec centers, pools and libraries that have a multiplying effect in making Philadelphia - all of it, not just Cneter City - a more desirable place to live, work, and do business in. Harnessing Brett's dogged determination to make Philadelphia a place where the benefits of living here outweigh the tax costs in this way is in your long term interests, Stan. In the Controller's office Brett will have his hands more than full tackling auditing the Parking Authorities and parts of the School Budget feeding wasted patronage in the BRT and Controller's Office it self, looking at the sometimes crazy ways the city spends its money on things like badly managed overtime in certain departments, etc. All of that work is ultimately to the benefit of making sure the services that make a real difference in average Philadelphian's lives run effectively.

Basically, from your perspective, Stan, you have a chance to harness one of your most effective foes to work on the part of his agenda that actually agrees with yours - because its the stated job description of the job he is running for - and in stead you are trying to sabotage that over differences he has already proven quite effective at getting his point across, with or without the Controller's office. More than that he has stated in no uncertain terms he would make the entire budget open and online specifically to encourage a more productive balance between the mayor and council. That basically allows Council to better search for less damaging ways to share the pain than the cuts to essential services and libraries that Nutter pushed for in round 1 of this year's budget crisis, rather than tackling hornet's nests like the BRT or the Clerk of Quarter Sessions, the City Commissioner's totally brilliantly wasteful spending on a basic election results website that hundreds of counties do better at fraction of the cost.

The mayor already disagrees with you and is very committed to the part of Brett's tax agenda you most dislike so even if a giant boulder were to land on Brett Mandell tommorrow you would still be in the same footing there. That mayor has also sometimes been gun shy, if it is poltically tricky, about tackling the wasteful practices he knows that cut into his ability to fund the things that really make Philadlephia a healthy, safe, desirable place to live and work and recently has shown a disturbing trend to go for "easy" anti-neighborhood cuts over tackling poltically touchier but clearly wasteful areas. You are ironically blowing a chance to use Brett's strongest aptitudes for the protection of those better, more effective services. Its fixating on the part you disagree with in a way that will do nothing to slow him down on that front while failing to make strategic use of those aptitudes for protecting services he clearly thinks are a substantial positive to attracting and building a stronger, more sustainable tax base here in the city.

Its shooting yourself in the foot out of spite, basically.

2. What part of the entire budget will be transparent is unclear to you? Every aspect of revenue, every aspect of expenditure, in detail. Brett Mandel has a stronger track record of standing up for the the open disclosure of the facts how Philadelphia collects and spends its money in a full context than virtually anyone in the city, certainly more so than anyone running for any elected office.

3.I'm saying there are political costs to taxes that intentionally target people and businesses from outside our municipality because it builds up resentment from those other municipalities that we are encroaching on their ability to self-govern. Suburban state lawmakers, even progressive ones, tend not to be the biggest fans of the non-resident wage tax because they percieve it as impacting their constituents without their constituents having a say in the matter. I'm a pragmatist in all things but I am suggesting those kinds of approaches have a political downside that needs to be considered. The whole casino battle should have been from day one about a city's ability to self-govern and have control over its own planning and development, for example. I would argue that because of casino revenue being attached to both resident and non-resident wage tax however, that basic Philadelphia "self-governance" theme got lost in part for suburban lawmakers, specifically because of this problem where suburban lawmakers rightly or wrongly perceive the non-resident wage tax as poaching on their own constituent's self-governance.

So yes, I agree for example if people come into the city to work, they use services and fairness dictates asking for a contribution for those services. Commercial property taxes and some business taxes and fees, etc. probably have a bigger picture political advantage as the place to look for that compensation, however. Also increasingly we have the opposite problem where the businesses are located in the burbs and Philadlephia is the "bedroom community".

My "big point" was basically this. The case for paying according to ability to pay and for delivering according to need works innately better when those doing the paying and those in need are under one big political jurisdiction - the Federal government. There are innevitably political resentments when one municipality starts to decide on its own that its needs "deserve" to rely heavily on its neighbors without them having a political say in the matter. Those resentments play out in complicated, sometimes unexpected ways - for example the whole casino brouhaha.

-Sean
MrLuigi, my cat, actually only types half as badly as I do.

And I would argue that it's tiring to eveyone else

because for every paragraph I write, you write three.

But that's alright, this is important. I'm posting something pretty long myself on this separately later tonight when I catch my breath. (Having arrived from India yesterday, it still feels like I'm 9 hours ahead of myself.) But I'll just say this: Brett is welcome to advocate whatever he wants as a private citizen. We validate his views, and Michael Nutter's, if we elect him to high office. That's what I'm against.

And I'll repeat: Mandel has not been for openness and transparency when it comes to who pays business taxes. You may think that it's a bad idea for out of City businesses to pay. But the rest of us have the right to know that such businesses do pay and how much, and decide for ourselves if we want them to keep on paying. Particularly when we have other bad competing choices such as raising the sales tax and playing footsie with the pension fund. Brett has diverted our attention from who really pays the tax, and that's not transparency.

Not just Butkowitz + Mandel

I would note that, if you don't like the choice between Alan Butkowitz + Brett Mandel, there is a third choice: The Hon. John Braxton, former judge of Philadelphia Family Court. Full disclosure: he's a good friend of the family.

-Z

I would say Braxton is a decent progressive and a good judge

His criticisms of how badly Butkovitz has been running the Controller's office are even more acerbic than Brett's have been to my ears. I just don't think he has the depth of experience in terms of the routine day-to-day of how the Controller's office should most efficiently run as Brett Mandel. Brett actually worked in the Controller's office doing the work and being the chief "best practices" guy there longer than Butkovitz has been Controller, remember. Brett simply brings a far greater depth of fiscal analysis to the table than either Butkovitz or Braxton in my view. Braxton would be my choice in this primary if Mandel was not in the race.

Edit from the Daily News:

"If you're part of the old guard, you're not going to speak up, you're not going to stand up, and you're not going to say anything," said Braxton, 64, a Common Pleas Court judge for nearly 15 years

RE: dragging out the Parking Authority audits

"My concern is, Butkovitz is so entrenched in his political dealings that he cannot function," Braxton said.

-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Vote to win

I agree that John Braxton seems like a good guy, but, respectfully, he does not seem to have mounted a campaign with a serious shot of winning this year.

Brett Mandel has. Almost certainly either the Machine-backed incumbent Alan Butkovitz or Brett will win.

If you want someone other than a Machine-backed Controller auditing the Machine, vote for Brett.

Underestimation of Braxton

I prefer post-election analysis to pre-election predictions, but I think it is wrong to write off Braxton's chances of winning. Braxton is first on the ballot, known because of his extensive judicial experience and prior races, and the only African-American in the race in a heavily African-American electorate.

Further, Mandel's campaign is spending much of its resources demonizing Butkovitz instead of praising Mandel.

Strategically and honestly

Braxton doing pretty well hurts Butkovitz a lot more than it hurts Mandell and to a certain lesser extent, vice versa. There's a pretty noticable drop-off for the Controller's race and Brett brings supporters and, interestingly, sports fans who normally might not bother to come out for an off-year election. In part its that I agree with Sam's read more than I agree with yours, Rep. Cohen, but I'm going to vote for the guy with the most experience actually doing real fiscal analysis in the Controller's office, which in this case is Brett, not the incumbent.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Respectfully Rep. Cohen

Brett got both the Inquirer and Daily News endorsements.

Both contain plenty of praise for Brett.

Defeating an incumbent, after all, usually involves large parts of both attacking the incumbent and advertising yourself.

RE: Braxton's campaign, I deduced it was small when I was inviting the candidates to PFC Meetup.

When I finally found Braxton's web presence online -- no easy task -- and called the contact number:

it was his cell.

The whole BRT implosion

is one giant advertisement for whoever has been the most outspoken proponent of standardized, rational assessments the city could have asked for over the years. Now who would that be?
-Sean
MrLuigi, my cat, actually only types half as badly as I do.

Here's the PICA Revenue Streams for April

PICS issues them monthly. BPT is not doing too bad, as are property taxes. The report is, as always, not written well,but the numbers have stayed close to what most folks would predict in a recession.

http://www.picapa.org/docs/Monthly_Tax_Updates042009.pdf

I'd venture to say BPT collections may be stabilized due to the fact that BPT rates are now competitive with surrounding jurisdictions, but I am not interested in a fight on that.

The red flag in this is the deflating of the sales tax receipts. Raising the rate on an already disappearing base doesn't make much sense, but I am surprised by little in this town. Not only is the sales tax regressive - except for the tiny silver lining of no tax on food and clothing, but the ways to opt out (Delaware, the Internet, etc.) are pretty well-known, except for the great poor and working sectors of the city, who are trapped and pretty much have to pay it.

At least it beats the wage tax, which the Keystone people claimed - in front of council - was progressive as is. Boy howdy.

Joshua Vincent
www.urbantools.org
www.ourcommonwealth.org
Phree Philly

Well, the sales tax revenue drop more likely is because

people are spending less, a national trend, not so much because folks are going over the county line to make purchases, though that practice may well find a few more adherents if the difference is 2% (or 8% in DE).

Sales tax avoidance is not so big a deal compared to hard times

Sam is correct, people are simply buying less in a recession (or buying worse, Big Lots is a great investment now). For big ticket items like a flat screen TV, people will make the attempt to save when the sales tax going to be 100 bucks. But trends in sales tax receipts are more tied to how the economy as a whole is doing.

Speaking of sales tax/VAT, the greatest living case study I have seen with my own eyes, literally, is of Britons reeling off the channel ferries with cases of Stella Artois to avoid the UK sales tax by purchasing their suds in Ostend instead of the East End.
Joshua Vincent
www.urbantools.org
www.ourcommonwealth.org
Phree Philly

Good questions & good answers

btw.

My dad tells horror stories about the waste he discovered, and the indifference he encountered, when he worked in the Controller's office before he met my mom.

Shedding a light on possible savings is the Controller's job, as is making sure contracts and commitments are being honored.

I haven't encountered anyone in politics more energized or bettered qualified than Brett to do that job.

I'm really happy that Philly For Change endorsed Brett.

Daily News Endorsed Brett

Or will tomorrow.

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