Taxes a real kick in the class for Philly

"There are no tax increases in the budget that I propose today . . . "

- Mayor Nutter, budget address, March 8

READ HIS LIPS.

When Mayor Nutter unveiled a budget plan with no tax hikes in early March - knowing that the school district was at least $400 million in the hole and possibly much more - it was the last day for would-be mayoral challengers to file petitions, and just 70 days before a lackluster Democratic primary.

Now, just 15 days after that primary, with Nutter's re-election seemingly all but assured, the mayor has pulled what you could call "a George H.W. Bush" with a last-minute flurry of proposed tax or fee increases, albeit not for the city budget but to funnel up to $110 million to bail out the cash-strapped schools.

But critics say Nutter's U-turn - reviving a once-rejected proposed levy on sugary drinks, a new property-tax surcharge, and higher parking-meter fees - is not so alarming for the policy as for what they call the last-minute, undemocratic process.

"Being ethical means more than not soliciting bribes," said Brett Mandel, former executive director of the Philadelphia Forward tax-and-ethics-reform group and a frequent critic of the Nutter administration. "It's about being open and transparent and keeping your word."

Phil Goldsmith, a former city managing director under Mayor John Street, agreed, saying, "From a democracy point of view, we have failed in spades."

Goldsmith and other critics said voters should have had more information about any schools bailout before they went to the polls in the low-turnout May 17 election, in which Nutter trounced convicted tax-dodger T. Milton Street. And they bemoaned the anemic state of the city GOP that now deprives that same electorate of a robust fall election.

Nutter administration officials insisted last night on background that they had warned the public about the looming schools crisis in March but that they spent much of the spring pressing the district and the School Reform Commission for specifics so they could get more involved.

There was talk, according to administration sources, of a public briefing about the district's fiscal disaster before City Council in early May, but the sources said that several Council members wanted to wait until after the primary.

Now, officials concede, there is little time for debate and the plan is to ram through a revenue package by the middle of the month, in part to move before the powerful soda-industry lobby can fully mobilize. They believe the focus on using the revenue for school kids and to keep full-day kindergarten running will aid the chance of passage.

Another game-changer, noted by City Hall watchers, is that six of the 17 Council members are leaving in January. Those who don't have to face the electorate might be more likely to OK a tax boost - which is exactly what irks good-government groups.

Sam Katz, the GOP mayoral nominee in 1999 and 2003 and who now chairs the Philadelphia fiscal-oversight board PICA, noted that the extent of the district's economic woes should not have been any kind of surprise to the Nutter administration.

"They've known about it for at least six months," Katz said, "and we've also known that the state had a $4 billion budget problem, so on that basis if

you're surprised by what the state might do, that strikes me as not having your head out of the sand."

Not surprisingly, Katz - who had publicly flirted with the idea of switching parties and challenging Nutter as a Democrat - said "the absence of a two-party system here" is crippling local democracy.

Nutter's Republican opponent in the fall is an obscure former Democratic committeewoman, Karen Brown, although there is talk that John Street, who switched his registration to independent, could jump into the November race.

"We actually had an election," said Mandel, noting the lost opportunity of primary season. "Would that have been a good time to have a debate of whether we should tax more or whether we should tax less, or whether we should spend more or spend less?"

Critics said last night that they weren't sure how much of the last-minute nature of the tax plan was from the Politics 101 playbook - many experts say it's only possible to pass such a politically unpopular plan against a deadline and a looming catastrophe - and how much was poor planning by City Hall.

Most people familiar with the process say that hopes of getting more money from Harrisburg - which might have allowed the Nutter administration to propose a less radical plan - has suffered with the unpopularity of embattled Superintendent Arlene Ackerman.

No one knows how much longer Ackerman will remain in that job, but Nutter - barring an electoral miracle - will be leading Philadelphia until January 2016. Pundits say that his ability to get this tax plan through City Council - including the elements of it that were defeated once already - may determine whether Nutter becomes essentially a lame duck before a second term even begins.

And the cost of that outcome for Philadelphia would be incalculable.