Archive: September, 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.
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.
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.
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).
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.
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.
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.
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.
Director Oliver Stone has returned to Lower Manhattan to film a sequel to his 1987 film, Wall Street.
Concern is growing that President Obama has become wobbly about the military strategy for Afghanistan that he endorsed in March.



