Williams: Use tax breaks to lure biz to Philly neighborhoods

Mayoral candidate Anthony H. Williams outlined an economic development plan Wednesday that included the creation of a municipal bank, a revamped tax system, and tax abatements designed to lure large firms into Philadelphia's neighborhoods.

Williams, a Democratic state senator, offered his plan with the backing of business community members who have endorsed his candidacy. Those offering their support to Williams included Brett Mandel, a senior adviser to Econsult Solutions; Ajay Raju, who is chief executive officer of the Dilworth Paxson law firm; and Joseph Zuritsky, chairman and chief executive officer of the Parkway Corp.

Williams' economic development plan included a broad list of goals, ranging from reducing the wage tax to less than 3 percent (it's now at 3.92 percent for city residents, slightly less for nonresidents) to advancing the region's position as a possible energy hub turning on the growing natural gas industry.

Like most of his rivals on the May 19 Democratic primary ballot, Williams has promised to revamp the city's much-criticized tax system to reduce wage and business taxes. To do so, he would rely on a proposal advocated by Paul Levy, the executive director of the Center City District, and Jerry Sweeney, chief executive of Brandywine Realty.

The proposal calls for raising the tax rate on commercial real estate and using the proceeds to offset other tax cuts. In Williams' plan, commercial real estate taxes would go up 15 percent.

Making such a change is no mean feat - it would require a voter-approved revision to the state constitution, which now bars differing tax rates for commercial and residential properties.

While voters have twice rejected such a constitutional change in the past, Williams said he was confident it could happen this time, largely because any tax increase would be borne solely by the business community, which he said was supportive of such change.

Williams' idea of creating a municipal bank stemmed from a desire to make sure small business had greater access to loans to grow.

Finally, he said tax abatements could be an ideal way to lure large businesses such as major law firms to the city's neighborhoods, where they could boost the local economies.

Even so, the reaction of one member of Williams' own policy committee suggests that idea faces hurdles.

A reporter asked: Would Raju consider moving his law firm, Dilworth Paxson, out of Center City and into a neighborhood, such as Germantown, in exchange for a tax abatement?

Raju seemed a bit caught short by the question, and offered that newly started businesses might be better suited for such a move.

"To extract Dilworth Paxson, which has about 400 employees, and move them there may be impractical now," he said.

"But we would consider it in the future."