Chamber opposes Philly plan for higher commercial property tax to lower wage, business taxes

A plan making headway in Harrisburg to change Philadelphia’s business and property tax structure has drawn the opposition a powerful group, the city’s chamber of commerce.

You’ll be forgiven if you’ve forgotten (or never heard of) the Levy-Sweeney Plan, named for Center City district executive director Paul Levy and real estate CEO Gerard Sweeney.

Two blue-ribbon tax commissions over 20 years have concluded the city’s heavy reliance on wage and business taxes, rare among big cities, has held Philadelphia back.

“This has been a slow growth city,” Levy said in a phone interview. “We have great success in Center City and University City, but one of the highest poverty rates among major cities,”

The plan, in the Pennsylvania Legislature, is to change the state Constitution to allow higher property tax rates on business than residential properties.

Then, if the city decides to impose that higher rate, the new revenue would have to go toward cutting wage and business taxes. 

Changing the state Constitution requires passing identical legislation in two successive sessions of the Legislature, then getting voter approval in a statewide referendum.

Remarkably, and in part because the plan has the support of the city administration and a number of business and labor leaders, it is making headway in Harrisburg.

It passed both houses of the Legislature overwhelmingly last year, and supporters are counting on a repeat this spring, which would trigger the voter referendum.

Alternative plan

The Chamber of Commerce for Greater Philadelphia has never enthusiastically embraced the plan, but hasn’t come out against it either — until now.

In March, the chamber’s executive committee approved a statement opposing passage of the bill.  The committee cites challenges in getting it enacted, and uncertainty about whether City Council would go along. (Council President Darrell Clarke has expressed reservations about the plan.)

The chamber said the city should instead act now to cut spending and reduce wage and business taxes on its own.

The chamber hasn’t taken to the streets or even held a press conference to proclaim its opposition to the tax plan, but it did send a copy of the executive committee’s statement to members of the legislative delegations from Southeast Pennsylvania counties.

In a statement yesterday, spokesman Mike Dunn said Mayor Jim Kenney is open to listening to other options, but that the Levy-Sweeney plan is “the best proposal out there to create flexibility for serious tax reform that will promote job growth.”

The chamber’s opposition was reported by Ryan Briggs of City and State Pensylvania, who noted that one of the bill’s sponsors, Philadelphia Republican state Rep. John Taylor, is confident it will pass anyway.