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to promote civic engagement in the Philadelphia region.Agreement Reached in Philadelphia to Close $1.4 Billion Budget Gap
Monday, May 11th, 2009 at 7:29 pm - by Matt Campbell. Filed under: Budget.
Philadelphia Mayor Michael Nutter dropped his demand for a two-year property tax hike over the weekend, that paved the way for him and City Council to reach an agreement this afternoon on next year’s buddget. The compromise plan incorporates Council’s idea for a temporary five-year sales tax hike, but drops a plan to borrow money against future tax earnings for immediete funds.
This plan. if approved by both Council and the Mayor, would help eliminate the city’s projected $1.4 billion five-year budget gap.
May 12th, 2009 at 8:37 am
City Council, 1. Mayor Nutter, 0. Now the attention can turn to how Nutter deals with the city workforce this summer and whether they can actually fix the BRT or if we’ll just see the same multi-part expose 10 years from now (on It’s Our City!)
May 12th, 2009 at 10:35 am
@Dan. I Agree with you quick assessment. Although I think the BRT assessment rates won’t be fixed for quite awhile. Now, I’m curious to see how much of Nutter’s “Citizens’ Budget” Council keeps intact.
May 12th, 2009 at 1:02 pm
This can hardly be called a victory for either “side.”
It’s a sales tax, which is a bad tax, of which there is little doubt. The poor will be proportionally hit the hardest by this.
The state has to approve the hike too. That’s not in the bank.. Harrisburg is not known for quick action especially concerning Philadelphia. I work all over the state; unhappily we are held in low regard, and they have the numbers in Harrisburg
The assessments themselves aren’t the issue, but rather the politicization of the agency. Maryland as a state fixed their assessment in a very short time. We as a city are just as smart as they are. I’ve seen the new numbers. For residential, I can say they have done a pretty good job, especially in raising values in Center City and rationalizing values in the River Wards, SW, etc.
The end game of all of this is that we are still stuck with tax sources that do not serve Philadelphia in terms of fairness, efficiency and, most important in a recession, reliability. Sales tax revenues are shrinking everywhere,
Pennsylvania and Philly is no exception.
Let’s be clear: the solution proffered is to raise the rate on a base that is shrinking, and may continue to shrink for some time to come.
Vowing to protect the taxpayers, we are choosing between the property tax and the sales tax. Do seniors, the poor and retired people not pay the sales tax? Of course they do. The benefit to the political class is that the sales tax is hidden. It shows up, maybe, on a receipt. It is diluted by time and the number of transactions we all make in a year.
The sales tax - while deductible - is a nightmare of paperwork. Property taxes are far easier to deduct. Property tax protections for low-income seniors are low but robust in Pennsylvania. A senior can get up to $650 back on their property tax; in Philadelphia that’s a large percentage of the property tax. No such protection exists with the sales tax.
This story is just beginning.