Today, the editorial board of the Philadelphia Inquirer came out swinging against Mayor Nutter's proposal to increase property-taxes. According the the first line of the editorial, raising property-taxes during a recession was a “bad idea from the start”, but the real nail in the coffin is the widespread incompetence and corruption that plagues the Board of Revision of Taxes, who are responsible for determing property values.
The Inquirer has been a stalwart supporter of Nutter until now, so it's fairly significant that they now oppose a major cornerstone of this budget proposal. However, their proposed solution seems a little too simplistic to deal with the immense fiscal crisis facing local government. From the editorial:
Given that the BRT's tax-assessing system is such a farce, Nutter is hard-pressed to argue in good faith for huge property-tax increases. Nutter, who was elected as a reform mayor, wants to raise property taxes by a hefty 19 percent this year and 14.5 percent above current levels in fiscal 2010. He needs to scrap that plan and find more cuts in the budget.
.....
Homeowners shouldn't be required to pay higher taxes to cover the city's bureaucratic waste and incompetence. Taxpayers should contact City Council and the mayor to voice their opposition to tax hikes, which are almost unanimously deplored, according to a recent poll.
So, basically, the Inquirer position is don't raise taxes and figure out how to further slash spending. There are absolutely more areas where city government can belt tighten. However, the sheer size of the budget hole would require major service reductions at all levels of government.
Lets run the numbers. According to budget released by Mayor Nutter, the city expects to generate about $271 million in FY10 and FY11 through raising property taxes. Without that increase or an alternative way to generate revenue, there is a hole of approximately $135 million per year in the first two years of the plan.
That's a lot of money to cut and would have to happen immediately. To keep that number in perspective, it's more the entire budget of the Recreation Department ($33.2 million), Free Library ($32.9 million), and Parks ($12.5 million) combined. Better yet, if you eliminated all the independent elected officials-- City Council ($16 million), Clerk of Quarter Sessions ($4.9 million), Register of Wills ($3.3 million), Sheriff ($13 million), and the City Commissioners ($8.7 million)-- you would still need almost $100 million in additional reductions.
To reach that kind of savings, you'd have to lay off hundreds of city employees and really decimate service levels. Now, maybe that's what the Inquirer editorial board wants. I don't know. But it seems pretty disingenuous to come out against tax increases with very few specifics about how to make up the revenue shortfall. You can't comment on one side of the equation without tackling the other.
Good job Waxman for doing the math. You're right. The cuts that would have to happen would be massive without a property tax hike. $135 million each of the first two years might even be too low at this point given further decreases in projected revenue. You'd have to close every free city health clinic (about $170 million) and the free city nursing home (I think I read $30 million a year), plus find $70 million more to cut. You're absolutely right that the Ink guys can't just be against something, they have to be for the solution that balances by the math. I think the Ink likes tidy hyperbole over numbers.— CleanupPhilly- Is there still a link to the Nutter budget proposal that is user friendly? You were kind enough to the Ink to not even start to point out how bad the likely outcome is for the city. H-burg has no inclination to pass the sales tax hike, the wage tax hike, or allow the city to borrow to cover operating capital. They don't even seem like they think the city has enough credibility to vote to allow the pension refi because they want to see the city Dems make those tough decisions that they've had to make. They want Philly to share the pain. What does that mean? That means There will be still more than the forfeit $272 million from the Ink's idea of not hiking property taxes, there will ALSO have to be the $342 million from the increase in sales tax revenue of 7% to 8%, and it looks like Abraham is not going to let them cut the DA by $4 million when they haven't made any substantive proposals to cut less essential services. The Ink editorial board isn't facing the fierce math. This Nutter budget is only looking for $3.84 billion in 2010, down from $4 billion, but the Ink is not even able to face that the terms in it are not flying in H-burg. Not only will property taxes have to go up as scheduled, they really will have to be permanent until the city is at the regional averages.— CleanupPhilly
- Council doesn't get it; the Ink editorialists don't quite get it. This is the result of super high economic taxes -- business, wage, sales -- on the revenue base in a recession. It super-shrinks it, like styrofoam in a microwave.— CleanupPhilly
- The Ink also hasn't been able to bring itself to face how bad the Dept. of Revenue and Sheriff is either, and they are critical to this budget equation. Just as bad and as true as every Pulitzer-worthy word of the Ink series on the BRT, is the Dept. of Revenue and the Sheriff. These are the folks who certify and collect overdue property taxes. How bad are they, how corrupt? There's $522 million in overdue property taxes. Half a billion in overdue revenue owed the city would go far to balance the Nutter budget, but no one wants to go there. When is any journalist going to cover how best to collect this overdue property tax revenue in time, and time is of the essence? Houses in probate can no longer be allowed to postpone sheriff sales for payment of overdue property taxes, using a city judicial order. That's just one change that has to happen. If the Ink doesn't want them to raise property taxes, they have to be for the collection of overdue property taxes, and that means going after the agencies just as broken as the BRT.— CleanupPhilly
- The city has not raised property taxes in over TWENTY YEARS. This is utter BS. The time is now to raise these taxes and to force the city to stop relying on suburban income tax payers to subsidize them through increased appopriations from the state. For instance the state now pays over 60% of the cost of the Philadelphia school district. Meanwhile suburban districts only get 15% of their costs coverd by the state. That is just unfair and wrong. Suburban taxpayers then have to suffer yearly property tax increases to make up for their income taxes going disproportionately to Philly. Utterly ridiculous!— Grill
- You're very right Ben. I thought that maybe with certain parties moved on that the editorial board might get over its propensity to wave its hands around, recite the mantra "waste, fraud, abuse, and efficiency" a few times, and recommend cutting taxes more, without doing any sort of math or rigorous thinking about whether what they were saying added it up to anything real. But actually they have turned into even bigger lightweights.— anodyne
- Ben, the point no one seems to want to accept is that the tax burden on city residents is too high to grow the population of the city. Why would anyone want to live here. The Inky is right. It is not the Inky's job to figure out how to do it, it is the politicians. And if they choose to ignore what the Inky is saying simply because there was no plan forward offered is pretty silly to me. By the way, why not sell some property owned by pidc and rda and shut these agencies down. Who needs them?— yes
PHILADELPHIA HORROR STORY
PILE OF BOTTLES FILLED WITH URINE
WILL CITY COVER $41 MILLION IN STATE CUTS?
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