Friday, December 19, 2014

Council proposes alternate budget

Big, late-breaking news out of City Council. They've got an alternate budget proposal worked out, one that would extend the mayor's proposed three-year increase in the sales tax another two years. More details to come soon, a copy of the release follows.

Council proposes alternate budget

Big, late-breaking news out of City Council. They've got an alternate budget proposal worked out, one that would extend the mayor's proposed three-year increase in the sales tax another two years. More details to come soon, a copy of the release follows.

 

CITY COUNCIL PROPOSES ALTERNATIVES TO ADMINISTRATION’S PROPERTY TAX HIKE
 
Alternatives Include Temporary Changes to Sales Tax,
 $25 million in Savings and Efficiencies
 
PHILADELPHIA, PA – Philadelphia City Council’s leadership team met wit h Mayor Nutter today and presented alternative proposals for solving the City’s fiscal crisis. Council is proposing a sales tax alternative to the steep property tax increases proposed by the Nutter Administration, along with a variety of spending reductions and efficiency savings.   City Council staff will be meeting with Administration staff to review the revenue and savings proposals.
 
“It’s important to find increased efficiencies in the operation of government before we raise citizens’ taxes, especially in times when most families are suffering,” said Council President Anna Verna, pointing to over $25 million in efficiencies and savings identified by Council and presented to Mayor Nutter today.
 
Philadelphians already pay higher effective property taxes than residents and businesses in 211 of the 240 townships and boroughs comprising Bucks, Chester, Delaware, and Montgomery counties. Because the property tax is not tied to income or ability to pay, the proposed increase would fall particularly hard on low-income or fixed-income homeowners, including senior citizens.
 
“We understand that the double-digit property tax increase proposed by the Administration will have a devastating impact on many homeowners and we have developed fiscally responsible alternatives that are tailored to working families,” said Majority Leader Marian Tasco after today’s meeting.
 

 

 
The sales tax alternative extends the 1% sales tax increase from three years to five years and borrows against the FY13 and FY14 receipts to provide an additional $200 million
in FY10 to address the current fiscal crisis. In combination with the efficiency savings identified by Council, the alternative generates as much revenue as the Administration’s proposal.
 
Administration’s
Proposal
Revenue Source
 FY10
 FY11
 FY12
 FY13
 FY14
 Five-Year Plan Total
 
Property Tax
Increases
 $ 153,934,000
 $ 117,694,000
 
 
 
 $ 271,628,000
 
1% Sales Tax
Increase
 $ 106,475,000
 $ 116,514,000
 $ 118,716,000
 
 
 $ 341,705,000
Annual Total
 
 $ 260,409,000
 $ 234,208,000
 $ 118,716,000
 
 
 $ 613,333,000
 
 
Sales Tax
Alternative
Revenue Source
 FY10
 FY11
 FY12
 FY13
 FY14
 Five-Year Plan Total
 
Sales Tax
Alternative
$ 306,475,000
$ 116,514,000
 $ 118,716,000
 
 
 $ 541,705,000
 
Efficiency savings
$ 25,000,000
$ 25,000,000
 $ 25,000,000
 
 
 $ 75,000,000
Annual Total
 
$ 331,475,000
$ 141,514,000
 $ 143,716,000
 
 
 $ 621,705,000
 
Summarizing Council’s alternative proposals regarding the sales tax and efficiencies, Minority Leader Brian O’Neill noted that “the sales tax is a more equitable solution than the proposed property tax increase – it is paid by residents and visitors alike and Pennsylvania is one of the few states that exempts food, clothing and medicine from the sales tax. Furthermore, it is incumbent on City government to drive down spending during this fiscal crisis.”
 
Noting that Council has presented viable alternatives to the Administration’s proposal, Majority Whip Darrell Clarke emphasized that “it is important for City Council and the Administration to work together to explore all options for addressing the City’s budgetary challenges.” 
 
City Council looks forward to working with the Nutter Administration to develop a response to the current budget crisis that is fair, fiscally responsible, and tailored to Philadelphia families.

 

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The Philadelphia Inquirer's Chris Hepp, Tricia Nadolny, Julia Terruso, and Claudia Vargas take you inside Philadelphia's City Hall.

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