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Archive: September, 2009

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Thursday, October 1, 2009

In the middle of Philadelphia’s budget crisis, Mayor Nutter threatened to implement his so-called Plan C if state lawmakers rejected the city’s effort to increase the sales tax and defer pension payments.

Among the more cockamamy proposals in Nutter’s “doomsday” budget was the elimination of funding for the lower courts. That half-baked idea may have helped the city balance its five-year budget on paper, but in reality the move was an act of pure fiction.
 

It’s easy to see why Philadelphia would want to stop spending $100 million a year on the courts.
After all it is the state’s responsibility. That’s right, the state Supreme Court ordered the state legislature in 1987 to fund the lower court system in all 67 counties.
 

Amazingly, for two decades, state lawmakers — who take an oath to uphold the state Constitution — have ignored the ruling.
 

Posted by Inqui @ 2:10 AM  Permalink | Post a comment
Wednesday, September 30, 2009

Ever wonder why the Republican Party in Philadelphia never seems to take a position on any issue? Crime? Corruption? City services?  Or if there are any actual Republicans who care enough about the city to offer an alternative to 60 years of Democratic rule? Or if the GOP has any candidates on the ballot this fall?

This article from Philadelphia magazine is a good place to start answering some of those questions.

Posted by Kevin Ferris @ 4:16 PM  Permalink | Post a comment
Wednesday, September 30, 2009

Under the tentative state budget deal, the Philadelphia School District expects to receive an additional $306 million in funding.

Gov. Rendell has yet to sign the state budget, and already the school district is crying about an expected $160 million budget gap.
 

What gives?
 

Don’t be fooled by the phrasing. This is hardly a budget gap. The school district is getting hundreds of millions of dollars more from the state than it received last year.
 

Posted by Inquirer editorial board @ 2:10 AM  Permalink | Post a comment
Wednesday, September 30, 2009

It’s hard to see the downside of President Obama’s decision to travel to Europe Thursday night to lobby personally for the 2016 Olympics in Chicago.

But that hasn’t stopped people from trying to find fault with the president promoting his country. One nattering nabob of negativism is Sen. Kit Bond (R., Mo.).
 

“I think it’s baffling that the president has time to travel to Copenhagen,” Bond said. “His number-one responsibility is to keep our country safe.”
 

Baffling? The president is making a round-trip of less than 24 hours to pitch Olympics officials on awarding the Summer Games to the United States. With Chicago as a finalist, it would be baffling if Obama didn’t make a personal plea for his hometown prior to the International Olympic Committee vote. (Philadelphia bid for these games but lost out in 2006).
 

Posted by Inquirer editorial board @ 2:00 AM  Permalink | Post a comment
Tuesday, September 29, 2009

While a smoking ban on beaches and parks may secure New Jersey’s standing as a leading nanny state, it would be a savvy economic strategy to bolster the state’s billion-dollar tourism industry while saving lives.

A couple of Shore towns have already enacted smoking limits. But at the rate individual communities are going to ban smoking on the beaches, it could take years to safeguard large numbers of bathers from the health risks of secondhand smoke.

Even better, a North Jersey lawmaker, State Sen. Barbara Buono (D., Middlesex), plans to introduce a measure to ban smoking on all 127 miles of Jersey beaches and in parks, citing “empirical data which support the passage of this public-health and environmental-protection measure.”

Indeed, the health risks of secondhand smoke are being realized as never before. Buono quotes statistics on exposure to secondhand smoke causing 50,000 deaths a year nationally.

Meanwhile, recent studies demonstrate significant public health benefits of smoke-free laws beyond just the impact of prompting smokers to quit.

Posted by Inquirer editorial board @ 4:55 PM  Permalink | 1 comment
Tuesday, September 29, 2009

As legislators in Harrisburg patch together a budget with baling wire and chewing gum, their scrambling effort highlights loopholes in the state sales tax.

The legislature might not be scrounging to pay for schools and roads if the statewide 6 percent sales tax were applied more fairly and were updated to reflect changes in the economy.
 

An article in Sunday’s<NO1>9/27<NO> Inquirer pointed out there are few rules for deciding which goods and services get taxed in Pennsylvania. Sometimes an exemption boils down to which company or industry has the better lobbyist.
 

How else to explain that the state no longer taxes the sale of gold bullion, costing the state treasury about $3 million per year?
 

The exemption on basic necessities such as groceries and clothing makes perfect sense. But giving a pass on candy and gum ($100 million per year) does not.
 

“I’m pushing the candy \[tax\],” Gov. Rendell said in an interview with The Inquirer’s Editorial Board before the tentative budget agreement. “Why not? What’s Hershey \[Foods Corp.\] done lately for the state?”
 

Soda is taxed, but not relatively expensive bottled water ($27.5 million, on estimated sales of $458 million). Cell-phone service is taxed, but not landline phones. Cigarettes (and now cigarillos) are taxed, but not cigars or smokeless tobacco. Basic cable TV service ($113 million) is exempt.
 

The uneven application of the sales tax is perpetuated in a new proposal to impose a so-called “culture tax” on live arts performances (and museums and zoos). It would raise an estimated $100 million annually, but would exempt tickets to movies and professional sporting events.
 

Overall, sales-tax exemptions (including those on advertising in magazines and newspapers) cost the state well over $15 billion per year — or about half of the state’s annual budget.
 

This system of picking winners and losers is due partly to the state’s failure to keep up with changes in the economy. When the state sales tax was created in 1954, consumers spent more on goods than on services. Today, about 60 percent of all consumer spending is on services, yet most services aren’t taxed.
 

Professional services such as legal, accounting, and consulting aren’t taxed. Hair-, nail-, and tanning-salon services are exempt.
 

Sales on the Internet are another example. Congress has banned sales taxes on e-commerce, but states can impose sales taxes on Internet sales if the company has a physical presence in the state. New York state has enacted such a law, and it’s expected to bring in more than $30 million annually.
 

The culture tax arose this month, without prior debate, mainly because legislators needed to fill a budget gap. Rather than single out winners and losers, the legislature should overhaul the sales-tax exemptions to create a level playing field for all.
 

Posted by Inquirer editorial board @ 4:50 PM  Permalink | Post a comment
Monday, September 28, 2009
Mayor Nutter, speaking recently at an older-adult center after the Legislature OK'd budget relief, has said that he still needs concessions from city workers to balance the budget. (LAURENCE KESTERSON / Staff photographer)

Maybe it wasn’t such good theater when Mayor Nutter had city firefighters burn 3,000 layoff notices the other week, once the firings were averted due to the state budget deal.

Facing a continuing demand to cut city spending — and with labor costs the obvious target — Nutter could find himself sifting through the ashes for those pink slips.
 
As he turns his attention to renewing labor pacts with the city’s main unions, the mayor’s spokesman says Nutter subscribes to the “general agreement that there will be no need for massive layoffs.”
 
But a new report out last week on budget-balancing strategies used by other financially strapped cities indicates that Nutter — unlike some big-city peers — has unilaterally disarmed too soon.
 
According to the Pew Charitable Trusts’ Philadelphia Research Initiative, mayors in New York, Chicago, Boston and elsewhere have given municipal workers an unwelcome but necessary choice: accept across-the-board, often temporary concessions on pay and benefits, or face layoffs.
 
It’s not a question of bluffing, either. Boston’s mayor went ahead with nearly 500 layoffs and Chicago’s cut 431 jobs after some unions rejected concessions. But New York and Los Angeles officials were able to avert layoffs after their unions agreed to other cuts.
 
These trade-offs are being debated at a time when, as Pew notes, cities’ revenue estimates are being revised downward, forcing “major, midcourse adjustments.”
 
Given the fiscal problems faced by most big cities, including Philadelphia, the only realistic way out is to reduce employee costs either through staff cuts or savings on pension and health benefits.
 
While Nutter emerged from the Harrisburg budget debacle armed with a temporary penny-on-the-dollar  sales-tax hike and savings from deferred pension-fund payments, he’s still smart to push to hold the line on wages for five years and trim benefits by $25 million a year.
 
As the Pew report predicts: “If the administration holds to those positions, the non-uniformed unions may wind up in the same situation as unions elsewhere — forced to make concessions or face job losses.”
 
For municipal union leaders, the demand for concessions versus layoffs may appear to be a Hobson’s choice. But isn’t it better to limit the number of jobs lost, even if it means short-term setbacks on pay and benefits?
 
So far, though, there has been little sign that the municipal unions grasp the dire fiscal situation. Even with the threat of massive layoffs, union leaders worked to scuttle a reasonable state Senate proposal to tame runaway pension costs.
 
With that brinkmanship, in effect, union leaders risked layoffs and cuts in basic city services.
 
Now the question is whether the city and union leaders gathered around the bargaining table — and those working on contract arbitrations for police and firefighters — expect a return to the good old days.
 
That would mean labor contracts that rely on Band-Aids and tax hikes to muddle through. Worse, it would pass up a recession-driven opportunity to right-size government through careful review.
 
Taxpayers and everyone who looks to essential city services have to hope Nutter hangs tough on his demands, and that union leaders remember those smoldering layoff notices could be reprinted.
Posted by Inquirer Editorial Board @ 2:00 AM  Permalink | Post a comment
Monday, September 28, 2009

Gov. Corzine and his Republican rival, Christopher J. Christie, don’t seem to agree on much as the gubernatorial race lurches through its inevitably ugly last days. But they both support property-tax rebates.
 

It’s probably no coincidence that the Tax Foundation just “awarded” New Jersey yet another No. 1 ranking on its list of the nation’s most burdensome property levies. No matter how many such prizes the state accumulates, its leaders remain fiercely loyal to policies that have failed to solve the problem.
 

Chief among them is the costly fiscal and political sideshow known as property-tax rebates. These annual checks are funded by income taxes, claimed on income-tax returns, and based partly on income — in other words, related to property taxes in name only. Meanwhile, the nation’s highest property levy continues its inexorable ascent.
 

The Tax Foundation report shows New Jersey’s property tax is well overgrown by any measure. The state’s median property tax last year was by far the nation’s highest at $6,320 — an astounding 37 percent more than that of the nearest competition, Connecticut. As a share of home value, it was second nationwide at 1.74 percent. And as a share of income, it was again far and away the worst, consuming a little more than 7 percent of homeowners’ earnings.
New Jersey also claims six of the 10 counties with the highest property taxes in the nation. The most expensive are in the north, but Camden and Gloucester Counties claimed the highest burdens as a percentage of home value — both above 2 percent, or more than double the national average.
 

Posted by Inquirer editorial board @ 1:00 AM  Permalink | 2 comments
Sunday, September 27, 2009
Michael Douglas (left) is hard-driving businessman Gordon Gekko, and Charlie Sheen is soft-hearted antagonist Bud Fox in director Oliver Stone's classic film, "Wall Street."

Director Oliver Stone has returned to Lower Manhattan to film a sequel to his 1987 film, Wall Street.

After the cutthroat Gordon-Gekko years, Stone didn’t think he would need to say more about corporate greed. Turns out, the insider-trading scandals and corporate-raiding dramas of the go-go ’80s were mere chump change compared with the runaway greed and excess that has become the core fabric of today’s venerable investment banks, hedge funds, and private equity traders.
 
Indeed, Stone says that many hotshot bankers have told him over the years that his film — which depicted corporate America at its ruthless worst — perversely prompted them to seek a career on Wall Street. The famous Gekko line that “greed is good” has become a mantra for many bonus-hungry MBAs.
 
That ethos explains why so few on Wall Street seem to have learned any lessons from the worst financial collapse since the Great Depression. Instead, it is back to business as usual in the financial markets.
 
Day traders have returned to the stock market. Speculators are driving up oil prices. And investment banks are pushing new exotic investment vehicles.
 
One new scheme is the purchase of so-called “life settlements.” Under this plan, bankers buy life insurance policies from ill and elderly people. The policies are then “securitized,” or packaged by the thousands, and sold as bonds to investors, including pension funds.
 
The earlier the insured person dies, the more investors profit. But if the person lives longer than expected, investors could lose money. Either way, Wall Street makes money from the fees to create the bonds and trade them.
 
The concept is reminiscent to the securitization of dubious subprime mortgages. That scheme only worked as long as real estate prices went up. Once the bubble burst, home prices plummeted, and the economy sank into a deep recession. The fallout cost millions of jobs and wiped out retirement savings for many.
 
Government bailouts were used to prop up the banks, leaving taxpayers on the hook for hundreds of billions of dollars. The crisis is finally easing, but many on Main Street are still hurting and may never recover.
 
Meanwhile, Wall Street continues to mint millionaires. More than 5,000 bankers received bonuses of more than $1 million last year. One Citibank executive got almost $100 million.
 
In a capitalist system, employees should be rewarded for hard work and innovation. But Wall Street continues to reward workers for extreme short-term risks, with no penalties for failure.
 
That’s why the Federal Reserve is correct to try and curb compensation policies that encourage bank employees to take too much risk. The proposal should include a “clawback” provision that enables banks to reclaim pay from workers who take excessive risks.
 
Until Wall Street learns that greed isn’t good, everyone else will continue to pay.
Posted by Inquirer Editorial Board @ 4:00 AM  Permalink | Post a comment
Sunday, September 27, 2009
U.S. Gen. Stanley McChrystal, right, commander of U.S. and NATO forces in Afghanistan, and German Col. Georg Klein, left, commander of the German base in Kunduz, visit a site where villagers reportedly died when American jets bombed fuel tankers hijacked by the Taliban. (AP Photo/Anja Niedringhaus)

Concern is growing that President Obama has become wobbly about the military strategy for Afghanistan that he endorsed in March.

 In fact, there’s good reason to believe a new report from his top military commander in that theater, Gen. Stanley A. McChrystal, was leaked to gain public support before giving it to Obama.
 
If that was the intent, it had some success. Some pundits have urged the president to meet McChrystal’s request for additional troops lest the war be lost. This would be in addition to the 21,000 additional troops already approved by Obama, which will ratchet up the total to 68,000.
 
But Obama has signaled that he won’t let public opinion alone steer his course. Nor will McChrystal’s voice be the only one he listens to. “There are other assessments from very expert military analysts who have worked in counterinsurgencies that are the exact opposite of McChrystal’s,” said Secretary of State Hillary Rodham Clinton.
 
Why would the administration appear to be backing away from policies it seemed so sure of in March, when Obama said the Taliban and al-Qaeda must be defeated so that Afghanistan never again becomes a base for terrorists who attacked our country?
 
Well, for one thing, Afghanistan’s recent presidential election has been discredited by rampant allegations of fraud. President Hamid Karzai’s government was already known for corruption. Now, Karzai has made it even more difficult for the United States to hail him as an emblem of democracy.
 
Karzai aside, a number of experts are reassessing not just the strategy but the U.S. goal in Afghanistan. The Council on Foreign Relations has published much of the debate in its periodical Foreign Affairs.
 
In one article, Ohio State University political scientist John Mueller points out that al-Qaeda doesn’t need a secure base to carry out terrorist operations. He notes that the operational base for 9/11 was Hamburg, Germany.
 
Mueller says many previous notions are no longer valid. For example, FBI Director Robert Mueller in 2002 estimated there were up to 5,000 al-Qaeda operatives in the United States. But after eight years of “well-funded sleuthing,” not a single al-Qaeda sleeper cell or operative has been found.
 
Steven Simon, a CFR senior fellow for Middle Eastern Studies, wondered whether the moment has been missed to successfully finish the large-scale mission that President George W. Bush began. He posits that reducing the terrorist threat might be better accomplished with the current program to kill al-Qaeda’s leadership through drone attacks.
 
 
That Obama is willing to listen to others while weighing the sound advice of his military commanders should not be cause for undue alarm. In his United Nations speech Wednesday, Obama restated a goal “to disrupt, dismantle, and defeat al-Qaeda and its extremist allies.” And he asked the world body for help.
 
It seems that the president just wants to get it right. With the lives of so many U.S. soldiers at stake, he must not be wedded to a strategy if it won’t make America safer or Afghanistan stronger.
Posted by Inquirer Editorial Board @ 2:00 AM  Permalink | Post a comment
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About The Inquirer Editorial Board
Harold Jackson, a winner of the 1991 Pulitzer Prize for Editorial Writing, grew up in Birmingham, Ala., during the civil rights movement. He graduated from Baker University in Baldwin, Kan., in 1975, with a degree in journalism/political science. He has also worked at the Birmingham Post-Herald, United Press International, the Birmingham News, and the Baltimore Sun. He was at The Inquirer in the mid-1980s, returned in 1999, and became editorial page editor in 2007.

Paul Davies is the deputy editor of the Editorial Page. His newspaper career has spanned more than 20 years and includes stints at The Wall Street Journal and the Philadelphia Daily News. He graduated from the University of Delaware and received a masters in journalism from Columbia University, where he was also a Knight-Bagehot Fellow. He was born in Philadelphia and still lives in the city.

Tony Auth began drawing while bedridden for a year and a half at the age of five. He graduated from UCLA in 1965 and worked for six years as a medical illustrator while doing three cartoons a week for various college newspapers. Tony has been happily ensconced as The Inquirer’s editorial cartoonist since 1971. He won a Pulitzer Prize in 1976, and has won numerous other awards, including five Overseas Press Club Awards, the Sigma Delta Chi award for distinguished service in Journalism, and the Herblock and Thomas Nast Prizes. Tony is married to Eliza Drake Auth, a painter of realistic landscapes and portraits.

Trudy Rubin is the foreign affairs columnist for The Philadelphia Inquirer, and a member of The Inquirer’s editorial board. Her column appears twice weekly in The Inquirer and runs regularly in many other newspapers around the United States. She is the author of Willful Blindness: The Bush Administration and Iraq.

Kevin Ferris is an assistant editor on the Editorial Board who oversees the Sunday Currents section and writes a weekly column on a wide range of issues. In his 15 years on the board, he’s handled letters to the editor and the Community Voices pages and has been Commentary Page editor. He started with The Inquirer in 1986, and his assignments have ranged from the copy and news desks to the Chester County bureau and the national/foreign desk.

As an editorial writer for The Inquirer for the past two decades, Russell Cooke has written on a wide range of topics covering government, legal, civic and social issues. Before joining the Editorial Board, he was a reporter in the Inquirer’s City Hall bureau.

Editorial writer Dave Boyer joined The Inquirer in 2002. He writes about politics, government, the economy, sports and many other subjects, but draws the line at writing about "Jon & Kate Plus Eight." He has won journalism awards and insists bribery was not involved. A native of Allentown, Boyer graduated from Penn State. He and his wife reside in Center City, where they enjoy strolling and paying the wage tax.

Melanie Burney joined the editorial board in January 2008 after covering education at the Inquirer for eight years. She previously worked at the Associated Press in Philadelphia and southern New Jersey. She is a graduate of Glassboro State College, now Rowan University, and a member of the National Association of Black Journalists.

Josh Gohlke has been The Inquirer’s op-ed editor since last year, editing the daily commentary page and writing occasional editorials. He came to the Inquirer after eight years at The Record of Bergen County, N.J., first as a reporter covering local and state politics and government and ultimately as the deputy editorial page editor. He also worked as a reporter for several smaller papers in New Jersey and California. Josh was born and raised in Los Angeles and graduated from Stanford University. He lives in Philadelphia.