THE CITY'S doomsday clock was turned off last week — with the state's following closely behind when a state budget deal was announced over the weekend by Gov. Rendell and lawmakers.
(We admit to being shocked that after the House and Senate resisted a sales tax increase for the city, it had no problem imposing one on concerts and museum tickets.)
Mayor Nutter sounded a familiar note last week that the action by Harrisburg would bring a "new day" for Philadelphia.
But the world has changed since he first used that campaign slogan, and we hope his first order of business is rewriting his old agenda. It's not that we're "ethic-ed out," but having seen the financial precipice, we hope his first priority is making sure we don't go back there. Here are a few items to get him started; we'll have more tomorrow.
BRT reform. The city was pushed to the brink partially because City Council refused to go along with a property-tax increase originally proposed by the mayor. That made sense at the time, since we clearly can't trust the Board of Revision of Taxes. Instead of honestly determining property values, the agency has a disturbing history of helping the politically connected, and the fact is, one corrupt assessment taints the whole system. Letting the BRT fester is not only unfair to all taxpayers, it also denies the city options for raising revenue in tough economic times. The city would have never been close to Plan C if there was public trust in the BRT.
The agency should be scrapped and brought under control of the executive branch, following the blueprint offered by other cities, like New York.
Tax structure reform. Philadelphia's taxes aren't just too high. We have a tax structure that is downright confusing for taxpayers and burdensome for government. For example, the Business Privilege Tax is structured in a way that makes it difficult to predict revenue. Also, many businesses find paying taxes all at once can be extremely difficult.
Business and real-estate taxes aren't the only problem. The wage tax relies heavily on suburban commuters. We want them to pay their fair share (after all, they use our roads and other services), but it creates a constituency that opposes any tax increase without really seeing the impact of service cuts. The city needs to find a balance between taxing residents and non-residents, all while keeping our options open.
A new approach to finance? The credit markets have clobbered cities and states (as well as individuals) ... and that may not be a bad thing, if it means a rethinking of how we pay for certain things. Of course, cities must rely on borrowing for capital improvements and infrastructure, but the general mentality of buy-now-pay-later has led to devastating crisis in state and municipal pensions. Nutter began his administration with the idea of a pension obligation bond, which would have borrowed a huge chunk of money and invested it the stock market. Two years later, that kind of bond has got to be considered toxic.
Already, the financial industry has been tiptoeing back into risky securities despite the hard lessons of the mortgage meltdown; we urge the city to not do the same when it comes to their usual approach to financing— especially pensions.
Tomorrow, we tackle criminal justice, the parks, poverty, and more. Send us an e-mail at views@phillynews.com to tell us what else you think should be on the mayor's to-do list.