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Monday, August 31, 2009

Will City Lose October Sales Tax Revenue?

Even if the state approves the city budget relief, may more cuts be on the way?

Two weeks ago, Mayor Nutter announced a round of cuts -- delaying a police academy class, laying off workers and cutting back hours at the 3-1-1 call center -- due to a delay in getting state approval for a temporary sales tax hike.

Nutter's original budget plan counted on getting state approval to increase the local sales tax by 1 cent on the dollar for five years and to make changes in how the city's pension fund is replenished. If approved, the sales tax increase would take 4 to 6 weeks to implement. Nutter expected to get $10 million per month in sales tax revenue, starting in August.

But because Harrisburg lawmakers hadn't yet given him approval, Nutter had to eliminate that revenue for August and September by making $20 million in cuts. And so PhillyClout wonders: Is October next?

The state House of Representatives is set to vote on House Bill 1828, which provides approval for the sales tax and pension changes, on Sept. 8. Even if the bill was approved and signed by the governor all on that day, there may not be enough time for the new tax to be in place by Oct. 1.

Finance Director Rob Dubow today said: "it's starting to look like that is going to be at risk." Stay tuned....
Posted by Catherine Lucey @ 3:17 PM  Permalink | 3 comments
Comments   
  • 0 like this / 0 don't   •   Posted 4:01 PM, 08/31/2009
    What are the chances that the bill will emerge from the house with no changes to the language whatsoever on 9/8/09? Plan C, I, has to go forward on 9/15/09 with no working legislation in place. What was submitted to PICA last week? (Today was the deadline for the revised budget required by PICA, the city did it last week). We're in September as of effectively one hour from now, the close of business. What are the chances that what is approved on 9/8 is not sent back to the Senate? The Senate will take about a week to make calls to the House to try to get them to deal with the fact that these amendments are non-negotiable -- take it or leave it. Then they'll send it back. The House will have either hardened its individual stances intractably or it will coalesce. If the PA budget is any guide, HB 1828 won't pass in 2009. The city seems to be doing a stepped version of Plan C, so the September Phase of Plan C is a go.
    — CleanupPhilly
  • 0 like this / 0 don't   •   Posted 4:05 PM, 08/31/2009
    Dubow's phrasing seems awkward. What was a risk was the assumption that the state would work on the city's time line. This whole gambit was one huge passing the buck that put all the chips in the hands of the state legislature and governor, which can't pass its own budget. I'm not saying they are stupid, I'm saying they are not expedient. Here's my thought. Let's COLLECT OVERDUE PROPERTY TAXES of $435 MILLION owed the city on property that can be sold at SHERIFF SALE. That's a NO BRAINER, right Dubow? The property that is empty in high comp sales zips, put it on the block this month. That is a lot more dependable a source of revenue than the state.
    — CleanupPhilly
  • 0 like this / 0 don't   •   Posted 4:10 PM, 08/31/2009
    Philly has to remove the obstacles to property tax collection. The city needs that revenue more than ever. The press has to cover this issue, everyone. It's a state issue, it's a city issue, it's an education issue for Philly schools, it's the alpha and the omega of city service, because property taxes are the last place with wiggle room to bring the city to a normal property tax rate and to regular property tax collection policies. There's no more time to be stupid about this.
    — CleanupPhilly


3 comments
About The Philly Clout Team
PhillyClout
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.
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David Gambacorta spent a small eternity writing about cops, drug dealers and serial killers. Now he’s writing about power and politics ­– which sometimes reminds him of the old crime beat. He joined the Daily News in 2005. And yes, he knows you’re not quite sure how to pronounce his last name. E-mail tips to gambacd@phillynews.com
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Catherine Lucey joined the Daily News in 2002 and has written about murderous drug gangs, political protesters and Harry Potter. After covering the 2007 mayoral election, she moved over to the City Hall bureau where she has been reporting on the Nutter administration.
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Jan Ransom, a native New Yorker, joined the Daily News in 2010 after graduating from Howard University. She has since written about the difficulty of filing police complaints, tax deadbeats and life after violent home invasions. She joined the Daily News City Hall Bureau in 2011 and has plunged headfirst into reporting on administration budget battles and City Council shenanigans.
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Catherine Lucey
luceyc@phillynews.com

Chris Brennan
brennac@phillynews.com

Jan Ransom
Ransomj@phillynews.com
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