Sunday, December 21, 2014

Wage Tax Hike a No-Go?

It looks like City Council’s suggestion that the city consider raising the wage tax to manage a $1.4 billion five year budget hole might be dead.

Wage Tax Hike a No-Go?

It looks like City Council’s suggestion that the city consider raising the wage tax to manage a $1.4 billion five year budget hole might be dead.

Several weeks ago, Council asked Finance Director Rob Dubow to confirm whether the city’s tax receipts had fallen by more than 2 percent. Because the city receives state gaming dollars for wage tax reduction, the casino law sets conditions for the city to raise the wage tax. One condition is that tax collections must drop by more than 2 percent.

But Dubow this morning sent a letter to City Council, reporting that tax revenues had dropped by 1.94 percent from fiscal year 2008 to fiscal year 2009.

Council wanted to look at the wage tax as a way to close the budget gap instead of the property tax hike proposed by Mayor Nutter. Nutter has also proposed a temporary increases to the sales tax.

Councilman Bill Green said he wasn’t concerned by the news from Dubow because Council is now actively pursuing a different plan – to extend Nutter’s proposed three-year increase of the sales tax to five. “At this point a majority of council people believe we have an alternative,” he said.

Councilman Jim Kenney, who had opposed raising the wage tax, said he was relieved. “It’s good news that tax revenues have not declined by more than two percent. It’s a close call in going down a road that we don’t want to go,” he said.

About this blog
Chris Brennan, a native Philadelphian and graduate of Temple University, joined the Daily News in 1999. He has written about SEPTA, the Philadelphia School District, the legalization of casino gambling, state government, the mayor, the governor, City Council and political campaigns. E-mail tips to brennac@phillynews.com
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Jenny DeHuff is a 2005 graduate of the University of Rhode Island, where she cut her teeth in journalism. A South Philly transplant from New England, she joined the Daily News City Hall Bureau in 2013. For the past several years, she has worked as an investigative reporter exposing corruption in suburban politics, covering sometimes ghastly criminal court cases and following the people’s money and how its spent. In addition to being a dogged news hound, she enjoys reading and writing about travel, animals, Irish whiskey and aviation. E-mail tips to dehuffj@phillynews.com
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