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?

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.

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.

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.

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.

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?

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.

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.

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

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.

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.

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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