COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 26, 2025 12:35 p.m. PRESENT: COUNCIL PRESIDENT KENYATTA JOHNSON COUNCILWOMAN NINA AHMAD COUNCILWOMAN CINDY BASS COUNCILWOMAN KENDRA BROOKS COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILWOMAN KATHERINE GILMORE RICHARDSON COUNCILMAN JIM HARRITY COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN RUE LANDAU COUNCILWOMAN QUETCY M. LOZADA COUNCILMAN NICOLAS O'ROURKE COUNCILMAN ANTHONY PHILLIPS COUNCILMAN ISAIAH THOMAS COUNCILMAN JEFFREY YOUNG, JR. BILLS: 250195, 250196, 250197, 250198, 250199, 250200, 250201, 250202, 250210, 250211, 250212 RESOLUTION: 250214
This is the public hearing and public meeting of the Committee of the Whole regarding Bill Nos. 250195, 250196, 250197, 250198, 250199, 250200, 250201, 250202, 250210, 250211, 250212 and Resolution No. 250214. Ms. Loughead, will you please call the roll to take attendance.
Present. Thank you. A quorum of this Committee is present and this hearing is now called to order. Ms. Loughead, will you please read the titles of the resolutions.
Bill No. 7 250195, an ordinance amending Chapter 19-1500 of The Philadelphia Code, entitled "Wage and Net Profits Tax," by revising certain tax rates, under certain terms and conditions. Bill No. 250196, an ordinance adopting the Operating Budget for Fiscal Year 2026. Bill No. 250197, an ordinance to adopt a Fiscal 2026 Capital Budget. Bill No. 250198, an ordinance to adopt a Capital Program for the six Fiscal Years 2026-2031 inclusive. Bill No. 250199, an ordinance amending Chapter 19-2600 of The Philadelphia Tax Code, entitled "Business Income and Receipts Taxes," to revise certain tax rates and end certain exclusions from the tax on receipts, all under certain terms and conditions. Bill No. 250200, an ordinance amending Chapter 12-100 of The Philadelphia Code, entitled "Traffic Code" to revise the fee for the use of parking meters, all under certain terms and conditions. Bill No. 250201, an ordinance amending Chapter 19-1800 of The Philadelphia Code, entitled "School Tax Authorization," to provide for an increase in the tax of the Board of Education of the School District of Philadelphia is authorized to impose on real estate; and amending Chapter 23 19-1300, entitled "Real Estate Taxes," to establish an equivalent reduction the tax rate for the City real estate tax, all under certain terms and conditions. Bill No. 250202, an ordinance amending Chapter 19-1806 of The Philadelphia Code, entitled "Authorization of Realty Use and Occupancy Tax," to eliminate certain exemptions, all under certain terms and conditions. Bill No. 250210, an ordinance amending Chapter -- amending Section 10-1001 of The Philadelphia Code, entitled "Fees of the Commissioner of Records," to increase the portion of fees for the recording of deeds and mortgages in related documents to be used for Housing Trust Fund purposes, under certain terms and conditions. Bill No. 250211, an ordinance amending Chapter 19-1400 of The Philadelphia Code, entitled "Realty Transfer Tax" revising the rate of the tax, all under certain terms and conditions. Bill No. 250212, an ordinance to amend Chapter 19-4400 of The Philadelphia Code, entitled "Development Impact Tax" to end imposition of the tax, under certain terms and conditions. Resolution No. 250214, resolution providing for the approval by the Council of the City of Philadelphia of a Revised Five Year Financial Plan for the City of Philadelphia covering Fiscal Years 2026-2030, and incorporating revisions with respect to Fiscal Year 2025, which is to be submitted by the Mayor to the Pennsylvania Intergovernmental Cooperation Authority pursuant to an Intergovernmental Cooperation Agreement by and between the City and the Authority.
Today we will hold the public hearing of the Committee of the Whole to consider bills read by the Clerk that constitute proposed operating capital spending measures for Fiscal Year 2026, a Capital Program and a Forward-looking Capital Plan for Fiscal Year 2026 through Fiscal Year 2031. Today we will hear testimony from the Administration regarding Administration finances and proposed tax bills. Today we have scheduled testimony from the Department of Finance, Department of Revenue, the Sinking Fund, City Treasurer, Board of Pensions, the Office of Property Assessment. Given the overlap in these departments' responsibilities, all departments will be available for questioning following testimony from the City's Finance Director Rob Dubow. At 3:00 p.m., we will hold our first of four public testimony sessions. Ms. Loughead, will you please call the first witness to testify.
Rob Dubow, Finance Director. (Witnesses approached Witness table.)
Just state your name for the record and please begin your testimony. How you doing today?
Great. Good morning, Councilmember -- Council President Johnson and members of City Council. I'm Rob Dubow. I'm the Director of Finance and I'm pleased to present testimony on the Office of the Director of Finance's FY26 operating budget. I'm joined by Cat Lamb, First Deputy Finance Director and Elizabeth Hanley, Deputy Director of Finance for Administration, Development and Training. We are joined by the rest of the Finance leadership team. Before I begin my testimony, I just wanted to take a moment to thank the leadership team and all the employees in Finance for their tireless efforts on behalf of the City. Finance's core budget request is 25.9 million. That includes funding for 142 positions. I'm going to keep this short. You have my written testimony and that details our programs, our goals, our performance measures and our spending. So I'm going to end my testimony there. We're also submitting written testimony for the Board of Pension Retirement, Revenue Department, Office of Property Assessment, Treasurer's Office and the Sinking Fund Commission. And as you said, representatives from each of those agencies are here to answer any questions you may have. Should I go into the tax bill testimony?
Okay. Thank you. So good morning, Council President Johnson, members of the Committee. My name is Rob Dubow. Same name, I'll not introduce myself again. Thank you for the opportunity to testify and I'll be testifying on the various revenue measures in the proposed FY26 budget and the '26-'30 Five Year Plan. And I break this into four different parts, the tax investment related to recommendations from the Tax Reform Commission, items related to the Housing Initiative to preserve and produce 30,000 housing units, items that will produce more revenue for the School District and items proposed in response to legal challenges. So on the tax investment side, in developing our proposed changes to the Business Income Receipts Tax and the wage tax, the Administration had three guiding principles: One, we wanted to do things that were bold and unprecedented. Two, we wanted them to be fiscally responsible. And three, we wanted to take advantage of the City's reduced pension costs after the City's Pension Fund reaches 100% funded. I believe that our proposal is consistent with all of those principles. We focused our reductions on the BIRT because it's a tax that's both complicated and expensive for businesses. BIRT taxes both receipts and income for businesses. That means that regardless of whether a business makes profit it has to pay taxes on its receipts. And then if it does make profit, it pays more. Our proposal would address both the complexity and the cost of the burden. Under the proposal, reductions in the gross receipts tax would begin in FY26 and they would accelerate once the Pension Fund reach 100% funded. And then that tax would be eliminated within seven years of the fund reaching 100% funded. Businesses would no 3 longer have to pay a tax on their gross receipts, even if they didn't make profit as they do now. Reductions in the net income portion of the tax would also begin in FY26 and also accelerate once the Pension Fund gets 100% funded. And then within seven years of the fund reaching 100 percent funded, they would be a little less than half of where they are now. So businesses would have a less complex tax and would be paying less. We give a couple examples of how that would work for businesses. It's in the written testimony so I won't go through the details of that. 39% for nonresidents by FY30. Resuming rate reductions would help continue a process that has seen resident wage tax reduced by almost 25% since it began. The changes to the BIRT and the wage tax are roughly $200 million investment through FY30, including about million in FY26. 11 And one of the things we were told 12 repeatedly is that for businesses 13 it's really important to have 14 predictability. So we are putting 15 these proposals in legislation 16 throughout the proposed term that I 17 talked about. E. Initiative. As part of the funding for that program, we propose to issue two $400 million borrowings for a total of 800 million. To help pay for the cost of those borrowings, the Administration is proposing a modest increase in the real estate transfer tax. E. bonds. And we have an example there of how that rate increase would affect a residential transaction and a commercial transaction, with the impact on the commercial transaction being much larger. We're also proposing to remove a hurdle to transactions by eliminating development impact tax. 5 million a year. So it hasn't had the benefit we hoped, but has the same cost for developers. On school funding, there are a couple of things in the plan. One is if you remember in last year's budget, we proposed increasing the percent of real estate that goes to the School District from 55% to 56%. 5% in the last year of our plan. That would provide another $12 million for the School District. When combined with the change we made last year, that would be $36 million more a year for the District. And in addition, we're proposing to increase meter rates in the Center City area by $1.
That will help increase traffic flow and will also increase revenues by about $4 million annually for the District. And finally, legal challenges. Since FY16, the City has exempted the first 100,000 in receipts from the BIRT. And since FY13, we've exempted an amount equal to 2000 from the Use and Occupancy Tax, $2,000 in payment. Those exemptions have been particularly helpful for smaller businesses. For the BIRT, tens of thousands of businesses don't have to pay the tax and don't even have to file a return. Unfortunately, the BIRT exemption has been challenged in court. Based on that challenge, the Law Department has advised us that the exemptions for the BIRT and U&O should be repealed. We don't take this step lightly. Relatively new interpretations of the Supreme Court requires that we can no 23 longer offer an exemption. Keeping the exemption would result in -could result in fiscally devastating punitive measures imposed by a court. We understand the issues that this will create. There will be confusion and additional costs. We're trying to take steps to help those businesses as we transition to a BIRT that doesn't include a gross receipts portion and has a much lower net income portion. The budget proposes to include $30 million annually to help businesses in two ways: First, we'll provide tax preparation support because some firms will either have not filed before or have not filed in a long time. And then second, we'll be expanding Commerce's programs to provide programmatic support for businesses so that they can grow and thrive. Among the programs that will be expanded, our Small Business Catalyst Fund, the Storefront Improvement Program and the Emergency Grant Program. We're also proposing to add employees in Commerce to help administer those programs. That concludes my testimony and we're available to answer questions.
Thank you, Mr. Dubow. Okay. Members are queued up. I just have a brief question before I turn it over to members so we can do a deeper dive into your presentation. I know yesterday some members were addressing the fiscal stability of our budget and there were some questions regarding if we're doing tax investments, if we're putting money aside for labor reserve, if we're putting money aside in the event that there's some policies that come from the federal government that has impact on our local revenues as well as the significant investments we're doing around the H.O.M.E. Initiative. Just give me an idea, Rob, on how you and your team are working, one, making sure that we have a structurally-balanced approach as we continue to move forward with our budget but also an issue that's near and dear to me again in terms of how are we driving economic growth and development. I know we talked about having an outside firm that gives projections on the type of growth we will see in the future. And so, I want to get an idea again and double-down on the Administration's plan to drive economic growth. And then also in terms of tax investments, are there any projections or how many jobs that will be developed based upon this investment that will take place with the tax investment?
Yeah. So we start first, the first question was about the fiscal stability in the plan. So a couple of things we have in the Five Year Plan. We start with fund balance, right. So that helps us as we look forward to kind of all the challenges that we face. We also make contributions to the Budget Stabilization Reserve Fund, which also helps us have a guard against unforeseen events. And then in FY25 in the upcoming transfer ordinance, we're proposing adding $95 million as a federal reserve which could at least give us a little cushion, as you know as things go wrong, if they do go wrong. So that's looking at the fiscal stability. We do have a plan that is balanced. It has positive fund balances in each of its years. We have a particularly challenging year when we get to FY29 because of that balloon payment on the borrowing from the 1990s. But you can see in the plan that once we get past that balloon payment, our fund balance starts to go back up. So we show kind of getting to balance after we face that big hurdle. Do you have a question now?
Okay. On the question of our economic development strategy, so tax investments are definitely a part of that, so are the other things that the Commerce Director was talking about yesterday, things like our workforce development programs, things like the marketing program that she's putting together. H.O.M.E. Initiative is also an important economic development tool, and I'm sure they'll be able to talk about more of that as they come in.
I was thinking, and I know it's early on in the stage, we'll have another day to specifically address the issue around the H.O.M.E.'s Initiative, again talking about focusing on job growth and development as a way to address the issue of poverty. And so, there will be analysis of projected jobs that should be developed out of the H.O.M.E.'s Initiative with the borrowing of the $800 million investment, is that correct, a fair assessment?
Yeah, the analysis of what it means for the economy in general?
Okay. When you talk about our city having the highest combination of credit ratings and more in the last four decades, how much money has the improved credit rating saved in terms of city borrowing? And I know you're big on making sure we spend the money, it's not just sitting there and we're paying a debt service.
Right. So what it's done for us when you get up into the A rating -- so we used to be BBB -- there are more investors who can invest in your bonds, so rates come down. I think the exact amount of the saving probably just depends on the timing and a specific issue, but it definitely has a meaningful impact on what we spend on our bonds.
As we move forward, what would you think would put our credit rating at risk as we continue to move forward in this environment?
Yeah. So there are two things that the rating agencies have looked at and said, okay, these are really positive developments. One is the progress we've made with pension funding. So I think if we didn't continue the commitment we've made to increasing the health of the Pension Fund, that would be something that rating agencies would be really concerned about. And if we didn't continue our commitment to having positive fund balances and making sure that we have protection against things that would go wrong, I think those are the two things that they are looking at.
And this question is for the Revenue Department regarding tax relief, right. We want to make sure that we're supporting the most vulnerable people in the neighborhood regarding making sure they're not burdened by the real estate taxes. And so, members of Council went all throughout the City of Philadelphia educating the public around the various tax relief measures that we offer, such as LOOP, such as Senior Citizens Tax Freeze, such as the Low-Income Tax Freeze. But one thing that did arise during our town halls that we were learning about is making sure that there's a coordinating effort in terms of the application process. And I know part of the testimony is that we want to have a consolidated portal where individuals can apply for LOOP, Low-Income Tax Freeze, Senior Citizen Tax Freeze and their various other tax relief measures that we have to offer. What is the timeline on when that process will actually be completed? COMMISSIONER McCOLGAN: Sure. Good afternoon, Council President and members of Council. I'm Kathleen McClogan, Revenue Commissioner. Thank you for the question. Because we're very excited about this initiative, we've already started conversations with our vendor to gather the requirements for a universal application for property tax assistance and our goal to implement that in FY26. It is a complex endeavor because of all of the different criteria for each of the programs, but we're confident that we'll get it done in FY26.
When we talk about the auto- or cross-enrollment for the various city tax relief measures, when is that time frame? Is it the same time around FY26 as well? COMMISSIONER McCOLGAN: For auto- and cross-enrollment?
Yes. COMMISSIONER McCOLGAN: So auto-enrollment is complicated on the tax side because of legal and privacy limitations that we have in place, but I can talk to you a little bit about what we do. So on the tax side when a customer is found to be eligible for the Senior Tax Freeze or Low-Income Tax Freeze, we do automatically enroll them in Homestead because we've already verified that is an owner- occupied property. And for -- we do the same for Senior Tax Freeze. We do think that the universal application will really benefit taxpayers. But also other things that we have done is proactively reopened the Low-Income Tax Freeze application since Councilmember Gauthier's ordinance was introduced on March 6th. And I'm happy to say that we have had additional applicants. I can talk to you a little bit more about outreach if you'd like, but also just to reiterate what we've done on the water side. So we do auto-enroll and cross-enroll wherever we're able to. So on the water side, we did auto-enroll over 40,000 customers into the TAP program. We're very proud of that initiative and it's ongoing work that we've partnered with the (inaudible) team to do. So that's still ongoing. We also auto-enrolled customers who were eligible to receive a LIHWAP grant from the state. We know that they were eligible so we were able to auto- enroll them into the assistance programs. And we've also greatly expanded the shut-off protections for water. Also on the tax side, once we identify that a property owner is eligible for OOPA, we also enroll them into Homestead if they don't already have it. And just in terms of what else we're doing outside of the limitations that we have legally and with privacy, we formed an internal working group within Revenue so that we can continue to utilize all opportunities to utilize the data that's available to us so that we can auto-enroll wherever possible but also to make sure that we have focused outreach to groups so we can clearly identify who is eligible for all programs and make sure that we have focused outreach to them. We're working in that working group to standardize best practices so that we can document what works best with each application, the type of communication that works best, the language that works best and the support that is needed. And we always appreciate Council's partnership in all of the community outreach events. We really find that that is the most effective way to get people overall enrolled into programs. It builds the trust that's needed. And many times we're able to enroll them right on the spot for things like Homestead.
Good. All right. Before we go into the second round -- and that's something that's probably pretty critically important as you roll out the H.O.M.E. Initiative? (First round.)
No, I said before we go into the second round -- oh, yeah. (Laughter.)
Long morning, right. So before I turn it over to my colleague to begin the first round, that tax relief initiative I just think it's critically important to work in partnership with the H.O.M.E. Initiative simply for the fact that while we're doing development, right, or the preservation of homes, obviously depending on what neighborhood you live in, individuals are probably looking for more levels of tax relief. And then also because we aren't doing assessments in 2026, that gives a little grace period where people don't feel like they really don't see their real estate taxes actually increasing, but then when '27 comes, my understanding '27, '28 we'll probably be doing this again, incrementally at least. From a preliminary conversation I've had, that after '27 moving forward we'll probably make an incremental increase or assessment -- not increase. I'm going to say assessment. But most of the time when there's an assessment, there's an increase, right. And so, hopefully during '26 we'll have a chance to kind of put this tool to work in terms of making sure when we go out in the neighborhood and the community, it's easy for people to just go on one portal, one application and enroll as many people as possible. I have a quick question though. I know I advocated every year I've been here around Homestead. Do we have numbers of how many people, how much was allocated in FY25, how many people actually took advantage of the Homestead Exemption in terms of money left on the table? COMMISSIONER McCOLGAN: I can speak to the enrollment numbers. For Tax Year 2025, we have 247,000 properties that are enrolled in Homestead. And that's an almost 13,000 increase over Tax Year '24.
Thank you very much. Let's rock and roll. The Chair recognizes Councilmember Jones.
Thank you so much, Mr. President. How much time do we have today per member?
So all I ask so we can get in two rounds, I just ask individuals before you do the whole speech before you get to the question --
So I asked that number because I can only praise one of the members at a time -
So I did Rob Dubow yesterday. So I want to thank you, Revenue Commissioner. I don't know. What was the lady that retired that used to come out and make people feel -- Vicky. COMMISSIONER McCOLGAN: Vicky Riley.
Vicky used to come out to community meetings and make people feel good about paying taxes. I'm like now that's some magic for you when you feel good and let me write this check. That is an amazing thing. And I want to thank you personally for one of my constituents who came up with this much paperwork about bills that he was unclear about and double payments and things like that. And you sat down with him and made him feel good about paying his taxes. So I want to publicly thank you for that. COMMISSIONER McCOLGAN: Thank you, Councilmember.
You are welcome. So my line of questioning is similar to what President Johnson talked about. One, in lieu of I think it might have been O'Rourke that talked about our potential exposure based on the federal government. And one of the things I will say about you, you are frugal, if nothing else. You know how to hide that money and put it away and squirrel it away. And --
-- I've learned to appreciate that in you. So what I want to go straight to is two things that I'm looking at. One, I don't want to tinker from above or in this chamber with millage rates, AVI, if it's going to have a devastating impact on our ability to provide basic services. But Member O'Rourke and others of us want to take a hard look at tax reduction proposals, things to protect the common person, but you have to tell us why we should not. I'm going to hold you to saying, Councilman, that's a crazy idea because this is what will happen. Now, I won't hold it against you, Rob, because I actually respect what you do. And so, you need to talk to us. We ain't got to do it in here, but to say this will have unintended consequences. So my bill is an AVI millage rate neutralization bill 23 that says they've learned over time not to have to come back in these chambers and ask what's for millage rates. So they go around the city and they adjust AVI to get what they need to run the city. But is that an overreach or overpay that we might want to look at millage rates adjustments based on property value increases. Now, like I said, I don't want to be the petulant Councilperson that messes up the dials, but you need to explain to me why we should or should not do that. And I'll hold you there.
And can I add also a point of information to follow up with Member Jones' line of questioning. Rob, you could also follow up with under the leadership of Councilwoman Jamie Gauthier, particularly when Councilmember Jones says in certain parts of the area, assessments, assessments right, are nonconformity, I guess if I can use that, but basically from a racial disparity standpoint, right, there was a report that came out that says, basically assessments are higher in some areas than the other areas based upon racial demographics and backgrounds. And so, I know we are doing the H.O.M.E.'s Initiative that deals with housing. Assessment is going to be a part of that conversation as we begin to develop, right. But could we also address that component in terms of what are we doing to address it as well?
So couple of things. On that component in particular, the Mayor set up an assessment task force that has people outside the Administration, inside the Administration, and one of the issues they're looking at particularly is that issue and whether that exists, and if it does exist, maybe what causes it and what can happen in response. And I know there are conversations going on about that. On the millage question specifically, I think obviously there's an impact on the General Fund. There's also an impact on the School District. And as Councilmember Thomas pointed out yesterday, they're facing some real challenges, their finances. So that would be one of the concerns I have about something that hit our millage rate.
So I'll let you know I sincerely appreciate your guidance on these things because that is your wheelhouse and I respect what you tell me, what you tell us. Second component I have is with all of the DEI retractment of working with members that represent University of Penn, Councilman Johnson, Member Gauthier, to look at a couple of things. One, if you're telling me that you no longer are committed to these things, should the City of Philadelphia be committed to you by way of you not paying taxes? So when you have the shadow of Temple facing North Philly -- and I'm not picking on Temple, not picking on Penn, St. Joe's does a real good job -- but it's time for us to evaluate what is the community benefit that you give in the shadow of your institution to the kid living in the projects. I'll never forget being at Temple and I'm watching this kid look at young people, scholars going to Temple never believing that that is for him or her in the shadow of not a job, not a scholarship, not anything. And so, we have to start to look at and say we care about these institutions that care about the communities in which they're housed, and we're going to seek your guidance on it to be able to come up with a formula that says, Penn gives this amount of scholarships, they work on community benefits, this amount of supportive housing, they're not gentrifiers, they are community partners. And we want to see a mathematical model that says you are worth the price of a mission in our city. And if not, if not, we need to take a hard look at their status as a nonprofit entity in the shadow of the communities that we live in. So those are two of my asks that we -- I don't want to go monkeying with things that I don't have, in the spirit of in my inner Blondell Reynolds Brown, right, that we really -- and one of the things Majority Leader does is does her homework. And we want to work with the Administration to say we need to do a little bit more of this. We need to be cautious about that, because particularly with No. 47 up there we don't want to cause a chain reaction that does harm to our city. So we're looking to work with you --
Thank you, Member Jones. Chair recognizes Councilmember Brooks.
Thank you to all of those testifying today. I'm going to go directly into my questions because I think there's a lot of confusion about the BIRT reductions and increased taxes on small businesses. I know that I've gotten some questions about this, and early today I pulled out a proposal that we are calling the People's Tax Plan outlining some sensible solutions that I think are worth considering in this body. Can the Administration give an update about the outreach they have done last year on wage tax refunds and how can we build upon those efforts? And the next question is, what steps can the City make today to get into a place where we can start automating wage tax refunds?
And I'm going to ask the Revenue Department to talk to that. COMMISSIONER McCOLGAN: Thank you, Councilmember. The first part I heard that you were asking about our communication about wage tax refunds. And I'm sorry, the second part?
One is about outreach and how can we build on them. And the second question is, what can we do to start automating the wage tax refunds. COMMISSIONER McCOLGAN: Okay. Thank you for the question. Through data-sharing, we did identify folks who are likely eligible for wage tax refund and we've sent out over 100,000 notices to them late last year, and we're happy to say that the result of that was that we were able to double the number of low-income wage tax refund recipients over the year before. So that was a success and that's something that we'll also continue to talk about how we can improve upon in that working group that I had mentioned earlier. Automating wage tax refunds is a challenge. It's something we really just don't have the ability to do because the data that we receive that's related to that is dated by the time it comes to us. On average, it's two years old, and also it doesn't really give a complete view of all income for the taxpayers. So auto- enrollment isn't something that we can do, but we can always work to improve our outreach and focus to make sure that we're getting those funds back to eligible employees.
So I heard you say you did mailers out to folks. Is that the only mode of advertising around that the City has done around wage tax refunds? COMMISSIONER McCOLGAN: No. So we have a ton of information on our website. I believe we also have a video that shares information about that. And then we also share information at all of the outreach events that we do. We do between 200 and 300 outreach events throughout each year, and we have a great communication team that makes sure that they focus that information where it's needed.
So is it on social media? Is it an ad campaign? COMMISSIONER McCOLGAN: Yes. So we have social media, we have videos on YouTube, we have information on our website. We also -- I just recalled that we send out a notice to all employers at the end of each calendar year to let them know that when they provide employees with W2s that they're required to also inform them of the low-income wage tax refund. So we make sure that we communicate that out to the employers, inform them of that requirement. We give them the language to share. So we're really doing everything that we can to get that communication out to eligible employees.
Thank you so much. COMMISSIONER McCOLGAN: Thank you.
But I do have to ask the question because one part wasn't answered, Rob. Is the tax investments raising taxes on small businesses? That was mentioned in the statement. So could you clarify what's happening to small businesses? Are you supporting small businesses or raising taxes on small businesses?
No. The tax rate cuts will -- the investments will help small businesses. Most of the payers of the BIRT are actually smaller businesses. The largest businesses are a very small percent. So, yeah, the tax rate changes will help businesses of all size.
Okay. Just trying to get some clarity just for the record as we go through this process. The Chair recognizes Councilmember Phillips.
Thank you, Council President Johnson. Today I just wanted to raise a couple questions regarding the business tax predictability. So you mentioned a commitment to predictability for businesses as part of these tax changes. Given the long-term nature of these adjustments, how does the Administration plan to effectively communicate the upcoming burden in wage tax changes to business owners, particularly small businesses, to ensure that they're aware of the new tax structure and have enough time to adjust and plan for these changes through FY39?
I'll turn it over to the Revenue Commissioner to talk about that in more detail, but it's going to be a combined effort of both Commerce and the Revenue Department to do the outreach to talk about both what's happening on the tax side and about the programs that Commerce is expanding. And both departments have an extensive list of contacts in businesses so they'll use that. COMMISSIONER McCOLGAN: Yes. Good afternoon. The Revenue Department is committed to making sure that we inform businesses of their tax obligations, and we've already started working very closely with Commerce. What we started to do once this change was announced was let everyone know that we're sending additional information after this tax season is ov -- after April 15th of this year, because it can be very confusing. The tax change applies to the 2025 year which is due in April of '26, so we've let people know that information is going to be shared soon, and we will make sure that we have a robust communication plan to all businesses. We can do a focused notice that goes out to all of the businesses that we have registered. And we've already scheduled weekly meetings with Commerce to talk about how we can best partner to get that information out to businesses, which can include adding some of the language about their programs to some of our notices that go out because we send so many notices out to businesses and customers. So we are going to work very closely together to make sure we get that information out.
Thank you. And just so you know, the important crux of that question is for very small businesses, the ones who may not even make a couple dollars a year. They're just businesses in name basically. COMMISSIONER McCOLGAN: Yes.
That's going to be more key. COMMISSIONER McCOLGAN: One thing I'd like to highlight also for small businesses is that as of 2022 they have the opportunity to carry a loss forward that is applied to the net income portion of their tax for years. 10 So that's also something that we 11 want to make sure that they're 12 aware of. 13
14 That's helpful. Also, for the 15 H.O.M.E. Initiative we're working 16 together to implement this plan. 17 As a Council, I have a few 18 questions regarding how the City 19 want to assure these resources for 20 each resident who need them the most. A critical factor for the 9th District is infrastructure improvements such as NPI's driveway program and retaining wall efforts. How does the Administration plan to support these type of initiatives under the H.O.M.E. Initiative ensuring that structural repairs and neighbor stability efforts are funded, particularly around our driveways?
The H.O.M.E. Initiative has funding for that, specific funding, so it's covered in that.
Perfect. Thank you. Thank you, Council President. I'll come back for the second round.
Thank you. In terms of small businesses, I would think that because of the lawsuits and I just want you to clarify for the record, because again there's an argument that this proposal, tax proposal, is raising taxes on small businesses. That's one narrative. I'm going to put it that way. Lay out the facts regarding the lawsuit, why the exemptions aren't going away, right. And then when the exemptions do go away, the steps that small businesses have to take as it relates to them now having to pay the gross receipts tax going forward?
So the exemption is going away because we've been advised that it would not withstand a legal challenge. That --
Yeah, yeah. So we understand that that will create both confusion and costs for businesses, particularly small businesses.
How much would it cost us to defend that case in court? You said it's going to cost us. How much are we talking about it will cost us?
In the worst-case scenario the whole BIRT would be declared to be not an enforceable tax. And so, that's the worst-case scenario and the thing that we're trying hard to avoid.
So Francis has advised me actually that in the worst-case scenario not only would we lose the tax, but we'd have to pay back three years of the tax. And just to kind of give you some context, in FY26 our estimate is that the tax be $725 million.
We don't give BIRT, Mr. President. We give credits. We won't give money back.
When you -- your time, you're queued up. But I just wanted to get on the record. And so, not moving forward with the legal challenge, right, doing the settlement, right, the exemption goes away, right. So the exemption goes away not necessarily raising taxes on small businesses. We didn't vote as a body to increase taxes --
I want to clarify the narrative. We can talk facts. Rather your people agree or disagree if you should go to court or not, we as a body are not voting to raise taxes.
Yes. And as part of the budget, we're proposing $30 million in programs to help businesses, particularly small businesses, through grants and preparation advice on the tax side.
And what's the Administration's plan to educate those small businesses and get them up to speed who have never filed taxes before?
Yep. So part of that 30 million in proposed funding is specifically for tax preparation to help to let small businesses know that they need to file and then to talk them through how to file.
thank you very much. The Chair recognizes Councilmember Jamie Gauthier.
Thank you, Council President. And good afternoon. Thank you so much for being here --
-- and thank you to the Revenue Commissioner for reopening the application for the low-income property tax freeze. I'm really excited that there's more time for people to get enrolled in this vital program. I know that we are considering the tax proposals as a way of attracting jobs ultimately to the city. The thing that I think that I struggle with every year around this is just wanting more certainty that our people will get the job, so that people who live here who are living in poverty will get the jobs or get a substantial amount of whatever jobs are created. So would we be able to put anything in place like local hiring requirements if we do go ahead with the tax cuts? Is that something that we could consider as a city to ensure that the folks who live here are going to be the ones who benefit?
I think I need to just talk to the Law Department about that, but understand the concept.
Okay. In particular, I really appreciated one of the proposals that came out of the Council President's Tax Reform Commission Report. Have you read that report?
Okay. I didn't want to assume. But there was a recommendation that we would create a fund along with any tax cuts that happen or particularly tax cuts attached to the BIRT. And the idea is that we will put an amount equal to 10% of the BIRT tax rate reduction into a special investment fund called the Jumpstart Fund. So, for example, if the BIRT reductions amounted to 30 million over a given period, we would have 3 million in this fund and we would create a match as well from our business community so that we could have several million to work with, and that money would go towards workforce development programs to ensure that local people benefit from these tax cuts, and they would also go toward support for small businesses. Are there any concrete plans to stand up these programs?
So the programs that we're standing up are really the ones we're talking about as part of that $30 million. A lot of those are specifically for small businesses to make sure that they can thrive and that they can maintain and expand employment.
Well, I appreciate the 30 million. And we've touted that. I do think that we should create a tool that makes it really easy for small businesses to get those 30 million in resources as opposed to shifting them to vital programs but programs that may have more application criteria. But the $30 million is specifically in response to us getting rid of the BIRT exemption. The Tax Reform Commission's recommendation is about the tax cuts that will be instituted over a long period, right. And so, it's not really the same thing. So what I'm asking is would the Administration seriously consider along with the tax cut proposals a fund where we could take a portion of that money and put it to use for workforce development programs for our residents here and for even more small business support?
Yeah. And I will tell you also that we have more in this budget on workforce development than equal to 10% of our BIRT tax cuts. So I think we've actually done more for workforce development than what the Tax Reform Commission was recommending. But happy to have more conversations with you because workforce development is important and we're always happy to talk about additional investments there.
Great. I would love to talk more about that. I know that since this came from the Council President's work, I would hope that the Council President and this body would push for such a fund. And just to be transparent, I talked to the Tax Reform Commission about this idea at great length and I'm hopeful that this is something that we can do for our communities. Thank you so much.
You're welcome. The Chair recognizes Councilmember Jim Harrity.
I got lots of questions, but right now I just want to concentrate on the Zero Fare program. A program funding free SEPTA passes to 25,000 residents in poverty is receiving 0 in the FY26 budget. I'd like to know why we're not continuing that program. It actually benefits people that actually need it. Also would like to know what is the average annual salary threshold to receive the pass and what is the average salary threshold for a family of four to receive the pass?
So I can just give you the general answer and then get more specific answers when MDO is here for their hearings. But that was a two-year pilot. The pilot ended and we made the decision not to continue the program after the pilot period, but we can get you more information on things like the income requirements.
Okay. Do we know the number of people that this is going to affect that took advantage of this? I know a lot of our staff actually took advantage of this when it was a --
Two separate things. There's the Zero Fare program that was a citywide program.
And then there's a program that was just for City employees, and that is actually continued in the program but in the budget at a lower amount, at $5 million, so that's still there.
Okay. So part of it will still be around, but the actual resident part of it goes away?
How much -- do we know how much that cost, the program?
I think that's right, but I'd have to get back to you on that.
Okay. All right. I think I still have some time left so I'm just going to keep going while they're conferencing over there, try to get it in. What's the timeline on our proposed million borrowing for the H.O.M.E. Initiative? And then to do with that, what are the legal requirements that must be met in issuing these bonds? Are there any restrictions on the use of the funds?
So in the plan we showed two borrowings, one that would be this fall and then the second that would be November '27. We are planning to issue the bonds as taxable bonds, which means that the only restrictions would be whatever we can put in the bond documents or whatever the discussions are with Council about any restrictions.
So there would necessarily be no 21 restrictions on what you could pay for?
Well, we would negotiate an ordinance in bond documents. And so, whatever are in those documents would be the restraints on how we could use the dollars.
Okay. And then just what are the risks associated with this borrowing and how will the City manage potential cost overruns and project delays?
So for the borrowing itself -- you're talking about really the H.O.M.E. program, right?
So I think that kind of discussion is probably -- we have a full day for hearings on H.O.M.E. where they can get into things like, what they're doing to control cost and what they're doing to make sure that we live within -
You don't have any general numbers that you can throw out here?
Well, the 800 million is the cost for the City bonds, and then there's also money that will use Housing Trust Fund and federal money that would get that cost up to about $1 billion. And then there's land that we would putting in that can bring the total cost to about 2 billion. But I think you're asking a different question which is kind of a program-specific question and --
Excuse me, Member Harrity. One second. I have a point of information from Councilmember Nic O'Rourke.
Thank you, Mr. President. Just a point of information. On the Zero Fare, isn't it true that though it is a pilot, you have confirmed that it's a pilot, that we're actually planning to cut the program before we even have the evaluation which is due in 2026; is that accurate?
So we have no ability to look at the benefits of this at all because we're cutting it before the actual --
Well, we know what usage was. Right, but we don't have that --
I also have another point of information from earlier, but I'll raise that up in my question time. Thank you. Thank you, Council President.
Yeah. So I'm just trying to make sure that when we're thinking about this, we're thinking far enough into the future. I'm a construction guy and stuff's expensive, man. You go try to buy a sheet of plywood that used to cost 10 bucks, it's now a minimum of $60 to $75. And things, you know, the way this is going on our tariffs on products, we're going to need steel.
I think we need to be making sure that our numbers reflect any kind of overruns or costs that may come up --
-- because of the inflation and because of the tariffs.
Thank you, Member Harrity. And I was conferring with the little small mini conference with Member Jones as being one of the authors of wanting to accept the program that you brought up. So we wanted to confer together to make sure that we want to be supportive of the initiative that he offered based upon you bringing it up and this body supporting you, so we're on the same page. That's all, sir.
(Inaudible). The Chair recognizes the gentleman Councilmember Young.
I have a question about the construction tax. Could you tell us how -- you said it's about $3 million that it generates a year?
And how much revenue is estimated to be generated by the increase in the real estate transfer tax?
Okay. And the increase in recording fees, how much is estimated to be generated by that?
300,000 a year. So just to me, we're looking to increase those recording fees which is a nominal amount, $300,000. But this construction tax can fund that essentially. It's money there if we keep the construction tax. Whatever intent you have with the recording fees, the money could be -- essentially it's already there with the increase. And I just say that to say because recording fees affect everybody. No matter if it's nominal or not it affects everyone, whether it's a transfer from a mom to a daughter, a grandmom, whether it's in the state transfer, it's just something a tax that really affects or a fee rather that affects the entire city. So I just think that as we're looking at ways to continue to generate revenue for whatever reasons that we look at who it affects in the long run. So I just want us to be clear on this construction tax. Yeah, we can modify it a little bit. I do think that it's funding that is necessary to fund the initiatives of our city. And maybe we can look at it, you know, we're using it to fund affordable housing. Maybe we shouldn't tax affordable housing using the construction tax, right. But it's still something that I think our City can continue to use that revenue for as the market itself is creating enough market rate housing, right, that this particular tax can help continue to fund some of the initiatives that we need funded in our city. So just want to make that comment on the construction tax. I do have a specific question for Revenue. How does Revenue really know if a property is owner-occupied or not? Because we were informed that the only way you know is if the homeowner has applied for a LOOP or Homestead. Are there any other proactive measures in place to identify homeowners? COMMISSIONER McCOLGAN: Unfortunately, there is no data that's available to us to accurately reflect whether a home is owner-occupied. One thing I did want to point out because I think it causes confusion is we estimate the number of owner-occupied properties based on census information, but we don't know which properties they are.
Okay. And I have a question regarding LOOP. This is a constituent matter. A constituent had to subdivide her property because she could no longer afford her property in Fishtown. She subdivided, got a new OPA number. They then kicked her out of LOOP because she got a new OPA number and her tax bill is $10,000 a year, which is a third of her income. And so, we're trying to figure out how can she get back on LOOP, although on paper she doesn't qualify because she hasn't lived in this new OPA address for 10 years or longer. So what can we do to fix those types of issues that we see in our systems along with some of the other programs like the -- while my time is up, the Senior Tax Freeze and the Low-Income Tax Freeze, we have seen that constituents with different estate planning methods have been denied access to these programs. And so, I don't want people who have estate planning tools to be denied from these programs if they qualify. So folks with like South Philly Trusts or other types of trusts or other types of estate planning tools to save money on the back-end, when they pass away or they transfer the properties to their families if the intent is this is their home, I think we should still be applying these programs to those folks as well. So could you address those for me? COMMISSIONER McCOLGAN: Sure. The issue that you brought up with that individual who had a subdivision for LOOP, I am aware of that issue. I appreciate that your office brought that to our attention and we're discussing it, and we will get back to your office on that one very shortly. On the issue of estate claims for Senior Freeze and Low-Income Tax Freeze, we do have equitable ownership. So those property owners can come to us. We have a process where a member of our legal staff will review their information to see if they can make them an equitable owner. And in that case, they are entitled to those programs. So happy to discuss the individual situations that have been brought to your attention.
Yeah. I think I would like to see what the criteria is that your office use to determine who's an equitable owner or not because we want to make sure that this is a fair process for everyone. COMMISSIONER McCOLGAN: Sure. We have a very long list of documentation that they can supply, so we'll be happy to provide that to your office.
Thank you so much. If you can provide it to the Council President, I'm sure other members of Council may have the same issue as well. COMMISSIONER McCOLGAN: Yes.
Majority Leader Gilmore Richardson, point of information.
Yes. Thank you, Council President. Point of information. Thank you very much, colleague Councilmember Young, for bringing that up. I have that here to even ask about. But I wanted to clarify with the Revenue Commissioner, you're referring to the policy change that we worked on around the tangled title issue in proving equitable ownership in order to be eligible for City tax relief programs; is that correct? This is the initiative -- COMMISSIONER McCOLGAN: That is correct.
-- that we worked on, right? COMMISSIONER McCOLGAN: I'm sorry?
Is that what Councilmember Young is referring to? COMMISSIONER McCOLGAN: I believe so, yes.
So it's something similar. It's essentially folks have decided for whatever reasons for estate planning purposes to have the title to the property in a trust. Although they still own the property, maintain the property as their home because of lower tax burdens when they pass away on their heirs, they may decide to keep a property title to the trust, but it's still their home. It is still their property they're occupying, maintaining, paying all the bills as their primary residence. And I think that those people should still have the benefit of some of these programs with like the Senior Tax Freeze, the Low-Income Tax Freeze because estate planning mechanisms, I mean, rich people use it all the time to get away from certain things. I believe that the lower-income folks are able to have the same benefit of using some of these estate planning methods as well. COMMISSIONER McCOLGAN: Like I mentioned, we'll be happy to review those individual property scenarios, but we do everything that we possibly can to get folks into assistance programs that they're legally entitled to.
Thank you, Council President. Good afternoon, colleagues. Trying to be efficient. So it's my understanding that the idea of getting rid of the exemption is not one that the Administration wants, but more or less the conclusion that you've come to based on a lawsuit, correct?
If you were to defend it in court -- and maybe this is a question for the City Solicitor, I'm not talking about the BIRT because that's your theory -- I'm talking about how much would we be spending in legal fees to defend it in court approximately if we were to defend it in court?
The idea of getting rid of the exemptions for BIRT and Use & Occupancy, that's a decision that's made by you all, correct?
And this is something that we will have to settle in -- this is a settlement that you're going through, through court?
Nope, nope. I'll save it for the City Solicitor because I'm going somewhere with this. I just want to be clear as to whether or not this is a decision that the Administration is making or is this legislation that you're asking City Council to pass. Which one is it?
It's the latter. We need to have legislation to end the exemption.
So technically, it's not a court settlement. It's technically legislation that you're asking us to pass in lieu of a court settlement?
Okay. All right. We can do that in a conversation. But if that is the direction that you're proposing to go in -- I understand that you're trying to create a grant program, let's put that to the side -- if we know businesses, if adopted, will end up paying more in taxes, small businesses, why wouldn't we see more of a reduction in BIRT? If we're going to tax the smaller businesses in ways that they've never been taxed in recent history, that means that we can anticipate more BIRT revenue coming in, correct?
So why wouldn't we lower the net income portion of the BIRT even more than what you're recommending if we anticipate new revenue coming in because we're getting rid of the exemption on Use & Occupancy -- I mean, because we're getting rid of the $100,000 exemption?
So the proposal that we're making is we'll get about 30 million more a year from the BIRT. And our proposal is to put that into the grant and tax preparation advice that we can --
Let me just say why. Let me just say why I'm thinking that. Because if you create a grant program, there's no guarantee that the people who are benefiting from the grant program are the same demographic of people who are suffering from us getting rid of the exemption. So why wouldn't we just lower the net income portion so we can assure that it's something that benefits everybody who's going to suffer from us losing the exemption?
Because with a grant program we can target it towards smaller businesses. If we just lower the rates, then it goes to everybody. And --
-- if you're going to target something, you can't guarantee it. If we reduce it, it guarantees it. Someone's going to get lost. There's no way we could create a grant program -- let me just ask this question before we go since that's your mission: Approximately, how many businesses do we anticipate being impacted by us getting rid of this exemption?
So every business will be impacted. So everyone who pays the BIRT would be impacted. What's that --
The exemption, everyone has the exemption. So the exemption goes away for everybody.
And I understand what you're saying. I'm specifically talking about the businesses who pay nothing because -- what you're trying to say is because --
Thank you. Can you help me out because then I got to --
I understand your question. I think it's tens of thousands. It's a lot.
Exactly, so that's my point. So how can you guarantee that the tens of thousands of businesses, the barbershop, the beauty salon, the nail salon, the restaurant, how can you guarantee that these tens of thousands of businesses that's going to be negatively impacted by us getting rid of the exemption will be able to benefit from the grant program? The answer is you can't.
So we also know that if we do across-the-board decrease that, that will dilute the impact, right, and that everyone who pays will get some small benefit whereas if we do a grant program, we can be more focused and give a larger benefit to a smaller number of businesses that --
You can do both. And we can make sure that we provide the most possible relief that we can for small businesses. So I just want to be clear to everybody that's listening, we don't have to choose between your option and my option. That's why I said let's put the grant program on a shelf for a second. We can actually do both. My time is up. Thank you, Council President. And I'll queue in for the second round.
Can I say one -- when you started the conversation about why don't we use the money that we'd be getting from the exemption going away to reduce rates, that's what I was answering. Why and what we're doing, what our proposal is to do with that revenue.
And I understand that. I comprehend exactly what you're saying. While your proposal might identify and earmark what happens with that new revenue, it doesn't guarantee that the people who are paying the most will be the beneficiary from that program. But if we just reduce the net income portion of BIRT, that will guarantee that those businesses benefit while in turn using your $30 million program as an insurance policy to be able to put a little more icing on the cake. Thank you, Council President.
And then that would have a cost beyond the 30 million which I think is what you're saying, but I just want to put that on the record.
My time is up. We can debate that later. Thank you, Council President.
Thank you. The Chair recognizes Dr. Nina Ahmad.
Thank you, Council President. Very important conversation. Just want to go back again on what information are we using to say that we're going to be challenged around the BIRT exemption? And are we proactively trying to fend that off by costing lot of small businesses who will be impacted? What information is telling us to do this?
So I think that is probably again a conversation during the Law hearing --
Good afternoon. My name is Francis Beckley. I'm Revenue chief counsel --
One second, Francis, because I think some clarity that folks are looking for. Why wouldn't we move forward and do the law and challenge in court the policy?
It has been reported in The Inquirer, it is a matter of public record and it is part of the public docket, that there has been a declaratory judgment filed against the City in Common Pleas Court to declare the BIRT as currently written unconstitutional. It is pending litigation. Consistent with best practices, the Law Department does not comment on the details of pending litigation. My understanding is there has been some briefing for City Councilmembers on this. I and my staff would be delighted to meet with you in private if you want to know more about the details of this, but it is not appropriate for public comment. Thank you.
So if, for example, it goes our way and we win this case, right, then we have preemptively removed these exemptions. Will we be putting them back in? I'm not saying that we are going to win it. I'm sure you have information that tells us we won't, but I'm just thinking of the scenario where we make all these drastic changes and then the outcome is moot and then what do we do, go back?
I think -- again, I certainly would not be publicly discussing the probability of our success in this lawsuit. But you as City Council always have the option of passing legislation and you will have until June to change things for FY26, and you can always repeal or re-enact things as the circumstances warrant.
All right. We'll get your private information about the lawsuit. I have a question about just growth projections. From my analysis, it looks over a five-year period about 3.2-something percent. I've heard grumblings from people that this is too low a growth projection and I wanted a comment on that. And the second part to that is this 30,000 units of housing that we are looking to do, is that going to have an impact and is that already reflected in the growth rate that you have shared with us?
So our growth rates are based on advice that we get from an outside econometric firm named S&P Global. They give us advice. We actually take it then down to a meeting at the Federal Reserve Bank with economists who then tell us what they think of it. That's what we use to inform the growth rates that we use for our taxes. This year, based on all that feedback, we show relatively slow job growth. One year it's negative. The other years are very small growth. But because that is in part informed by what they see as a tight labor market, there's also a projection about increase in wages. So the combination that you're seeing is the combination of relatively low growth on the job side and then growth on the wage side could come slightly differently. If there's more job growth, wages could go down. But that's kind of how we get to that. And they do build into their projections things like when they know that there's the H.O.M.E. Initiative coming, they'll build that in or when they know that there are changes in federal policies, they'll build that in. So it's not an explicit number that I can say, okay, here's what we put in there because of the H.O.M.E. Initiative, but it is something they consider as they do their projections.
Because that rate is an important number for people to decide to invest in setting up a business here, do those kinds of things. So it's really important that we share the information with our business community to really understand how we're projecting our growth rates so they see some guarantees about some level of growth given the changes that could happen outside our control. So this is the feedback I will give to my constituents who have been grumbling about low growth rate.
And I would say also that they're looking at national and international economic factors. So the fact that they're seeing slow job growth is not specifically an indication that, oh, there's something wrong here. It's what they're seeing globally.
Right, right. Quickly the next question I had was I believe the Controller has said that -- let me just get that -- the City's decision to provide additional funding for the pensions will actually save money down the road. Once it reaches full funding, the 742.8 million allocated can drop to 200. Can you explain in layperson terms what that means and how that frees up resources for us because there's a myth going around that you only need to go up to 80% funding the pension and you really don't need to go to 100? That's another concern that has been voiced. So I just wanted some clarity around that.
Yep. So what that means is that in essence the assets that we have in the Pension Fund are not sufficient to pay all of our liabilities --
-- and we make payments into the Pension Fund every year to eliminate basically the difference between the assets and liabilities. And we have been doing that pretty aggressively along with making other changes to things like employee contributions, the sales tax contribution, how the benefit is structured for employees. All that together has a really big impact on the fund. It's meant that the funding has gone from the mid-40s to the mid-60s. Our actuary projects that by 2033 we will get to 100% funded. When we've done that, that means we're no longer trying to pay off that difference between our assets and our liabilities. The number you were talking about is an all-funds number. The General Fund number is more like in the 430-ish range. It's still a substantial number that frees up a lot for other investments. If we decide when we get to 80%-funded that we're not going to try to go higher than that, we would never get to the point where we got that big payoff or we would push it much further back. Think it would also be very different from what we've agreed to with a variety of stakeholders about what we would be doing with pensions.
Yeah. So this would be another piece to share publicly about clarifying that not only do we want to get to 80 and that myth that surrounds that we don't need to go more and the reason for going more and how it frees up and how it impacts our bond rating as well, which allows us to borrow cheaply. So thank you for that clarification.
Thank you, Council President. I'll hold all my other questions for the second round.
Thank you very much. The Chair recognizes Rue Landau.
Thank you, Council President. Thank you all for being here. I'll jump right into the questions about the lawsuit. Got to go back to it again. I'm sorry.
Okay. I'm going to just ask Francis to come back up. So instead of my stumbling around not answering, she's going to help.
I really want to just get to the bottom of a couple of things with it because I share the Administration's goal in maximizing revenues for the City, but we all know changes towards tax system shouldn't come at the expense of small businesses. And so, I'm concerned with this notion that we are absolutely, definitely going to lose this lawsuit.
I'm one that wants to take the chance and go fight it and continue on. And one of the questions I had, because I think this is a progressive tax, it reduces the tax burdens on small businesses, let me just be clear first that the $100,000 exemption, is that on both gross receipts and net income?
It is on the gross receipts portion and then it is on the corresponding amount of net income that is attributable to that amount of receipts.
So that would vary with the profitability of the business. You could bring in 200,000 of gross receipts and the amount of net profits you have from that could be very different depending on the business.
Okay. But the net -- I understand because the gross receipts is so much smaller. Let's give an example --
But I would urge you, you're an attorney, we should have this conversation in private.
And I'm delighted to have an educated conversation with somebody who's as knowledgeable as you are.
Okay. Let me ask a more global question then. My belief is that if we remove this exemption, it will bring in significant amount of revenue for the City even from the big businesses that are excluding their first $100,000 in income. Why is the proposal to only have $30 million into a pot of money to help these small businesses?
That's our projection of what the additional revenue would be until we're basically taking the additional revenue and putting it into that pot.
Okay. I would appreciate a longer conversation then because I -- thank you.
Can we talk about the construction tax then. Why is that so complicated to implement? You've said that there's so many barriers for implementation. It brings in $3.5 million. I think there's a lot we can do with $3.5 million. Why is it so complicated? COMMISSIONER McCOLGAN: So the construction impact tax is 1% on the cost of construction. And 50% is collected upfront and then 50% is collected once the work has been complete and it's approved for occupancy. That's all administered by Licenses and Inspections.
Can your office, the Revenue Department, administer this? COMMISSIONER McCOLGAN: We don't receive the cost of construction information which is why L&I administers it for us.
But if we did have your office oversee it, likely since you administer all of the taxes for the City it could be less cumbersome and easier to collect, right? COMMISSIONER McCOLGAN: Well, we worked in close partnership with Licenses and Inspections when this tax became law and it really requires someone in L&I to understand the cost of construction for a project and to collect those funds upfront, which is why we decided to implement the tax as we have with them administering it. It's not something that Revenue was really in position to administer.
Let me also just switch while we're here to the real estate transfer tax. There's many, many exemptions to this tax. I wholeheartedly support so many of them. Who in general is paying the real estate transfer tax, what entities?
Who pays the transfer tax? It's really anybody who has a real estate transaction. So it can be for a residential transaction. It could be for large commercial transaction. It could be for an apartment building. So it's really any time there's a property sale.
But there's so many exemptions that if it's parent to child, they're exempted. If it's spouses, they're exempted. It's religious institution to institution, it's exempted. Nonprofits are exempted. Life partners and spouses are exempted --
So it's really -- and correct me if I'm wrong -- it's for arm's length transactions, for-profit institutions. COMMISSIONER McCOLGAN: Yes.
If you could get us a breakdown of who's paying that, we would appreciate that. And (inaudible) -- I got cut off. I'm coming back. Thank you.
Thank you, Member Landau. Chair recognizes Councilmember Bass and then Councilmember O'Rourke, Councilmember Lozada. Then we go into our second round. You spoke already, Phillips, correct?
So just a couple of questions actually. And I want to go back to the question around PILOTs. Because as we are having these very difficult conversations, it's not lost on any of us, and I think from all of the questions that you hear today, the question of fairness and who's paying and who's not paying, it's a continuing theme, not just this year, last year, the year before, the year before, and we keep having the conversations over and over again in an attempt to get it right. And so, I wanted to ask less of a question and more of a request. I would like to request, Mr. Dubow, that you would provide to Council an analysis doing some sort of a comparison in terms of the value of real estate that is untaxed because it's owned by nonprofits and what it would typically incur in taxes versus what's being paid in PILOT payments. And I'm going to use the University of Pennsylvania as an example. We all know they own huge parcels of the most expensive real estate here in the city of Philadelphia. And we'd like to get some sort of a sense -- and I know in the past, I think under the Rendell administration, that far back, they were providing PILOT payments to the city. And then maybe in later administrations, but I don't know, if there's been any payment as of late.
They are actually making million a year 10 payment for the School District for 10 years.
So they do -- so they're making 10 to 13 million in payments to the School District?
10 million. So can we get an analysis -- and again, not to pick one anyone in particular but I just used them as an example. But can we get an analysis of sort of some of these large parcels, some of the largest most valuable real estate here in the city of Philadelphia that is untaxed because it is owned by nonprofit entities? And as I remember, can you verify that about a third of all property in the city of Philadelphia is off the tax rolls because it's owned by nonprofit institutions?
We can get you both of those. We can get you an analysis of all the nonprofit exemption, what the total assessed value is of those properties, how that would translate into an amount for tax and what that looks like as a percent of our overall assessed value.
That would be great. And also, do you know offhand what percentages of real estate that's all off the rolls?
I don't. Your percent sounded right but I don't know for sure.
Okay. Because that other two-thirds that's paying, a lot of that percentage is in low-income neighborhoods where people are really struggling to hold on to their properties. And as we increase assessments, which is basically increasing taxes -- (Witness approached Witness table.)
For all exemptions, but we probably need to dig down a little further.
Okay. All right. Well, very good to know. So even if it's a quarter, that other three-quarters that is paying is struggling. Most of those folks are struggling to pay rising real estate prices, rising real estate taxes in this market. So if we can get that information, I would really appreciate it.
You're welcome. The Chair recognizes Councilmember O'Rourke. Then Councilmember Lozada.
Thank you, Mr. President. I'd like some clarity -- and good morning -- good afternoon, sir and family. I'd like some clarity on job growth projections for the next five years. Finance noted that its projection of nearly flat growth was splitting the difference between a baseline economic scenario and a more pessimistic scenario given federal uncertainty, and we've heard that word a lot lately. (Bell went off.)
You know, I'm going to go ahead and push it to the limit. But we have heard a lot about that particular word uncertainty here. Things are unclear. I can respect that. But fiscal policy is still informed by expectations. So I want you to talk about what that pessimistic scenario actually looks like in hard numbers. Hard numbers actually help us make this make sense for folks who ask us about these things. We all understand a number like $2 billion. Trump tried to freeze about $2 billion in federal funds for the Commonwealth, but a lawsuit from the Governor unfroze it, though the Administration disagrees with that. And we've seen less than 10 million in federal funds withheld beyond that blip. But federal workers are getting fired left and right. Just yesterday Penn faculty were ordered to halt 175 million in federally-funded research and the Penn Health System cost 300 jobs. It's hard not to notice. So here's what I want to know: What does the pessimistic scenario look like? In particular, I'm asking about projections on job growth and revenue in both the general and grant funds? Also, would you say that so far we're closer to the baseline scenario than the pessimistic scenario? And -- well, let me let you answer those first.
What we went within the Five Year Plan was not the pessimistic scenario. We went with basically a combination --
Yeah, let me find it. It's about -- sorry. If you have other questions, I'll look for that while we're talking.
Okay. The other piece I wanted was you've mentioned that experts in attendance at a February meeting, I think that Member Landau may have brought up, suggested splitting the difference between a baseline and pessimistic situation. So for the public to understand your work a bit more, to make it in layman's terms, could you explain what meeting that was, what experts gave that advice and the reasons why they gave it?
Yes. So it's a meeting that we have every year down at the Federal Reserve Bank that's hosted by our financial oversight authority, PICA. They invite economists from around the area to come together to look at our projections and to say, yeah, your projections make sense or, no, they don't. And in this case, they're too optimistic, you should modify them. And it's important to us too because as we go through our budget process, we have to get our Five Year Plan approved by PICA, the oversight authority, and their standard is whether we're using reasonable assumptions. And so, one of the things to look at is the projections that we're making for tax revenues, do they take into account everything that's going on in the economy. And if they don't, if they say, no, you are too optimistic, they can say your plan is in balance using reasonable assumptions, you have to go back and change it. So getting to a place where we have reasonable assumptions is really important to us. And your question was what are the growth rates. So they're between -- with one exception, there's one year, '27, where they project a decline. But in the other years they're projecting between .2 and 05 percent growth each year. And then on the wage side they're projecting growth. The highest year is about 6% and the lowest year is about 3.5.
And I heard my time and I want to cede it to Member Lozada who's next, but I did want to lift this up on a point information. There was a point that was made about retroactively paying if we lost that lawsuit that we weren't supposed to talk about on the record. I just want to make this point from December, about four months ago, on November of 2024 the Pennsylvania Supreme Court concluded that its decision to invalidate a limitation or cap on net operating loss carry-forwards should be applied prospectively only. They actually said that it was three things: Under the Chevron Test when considering whether to apply decision retroactively, courts must consider, one, whether the decision in question established a new principle of law; two, whether retroactive application decisions would forward the operation decision; and three, whether the relevant equities favor prospective application. Because the court found that each of the three factors supported the prospective- only application of Nextel the court determined that the General Motors court erred in applying Nextel retrospectively. So we wouldn't have to pay back on that -
So the number I gave, the $725 million, was just a one-year number. That had no retro.
I just want to make sure for those who are concerned about if we would have to pay back if we lost, that that's not the case according to the Supreme Court. But I cede my time. I have my other questions for the next round.
Thank you very much. Councilmember Quetcy Lozada.
I have a very basic quick question, right. We have businesses from very small to larger businesses across the city of Philadelphia. Some of them have language barriers. What are we doing to ensure that these businesses understand how there will be a shift in BIRT tax and how they can get connected to services? We learned through the pandemic that some of these businesses were not prepared to be able to file or take advantage of different programs that were put in place. We're still experiencing challenges with some of these folks in my community, especially where some only speak Spanish. Others come from different places and they don't speak English. What are we doing very specifically to ensure that these communities are educated on the change in process and how they can take advantage of the grant opportunities that we are saying we're going to make available? COMMISSIONER McCOLGAN: Thank you for the question. Revenue has our -- Philadelphia Tax Center is translated into multiple languages, as is the vast majority of the notices that we send out. So most of the notices that we send are in both English and Spanish, but we also have information for multiple languages on there so that they can contact us and get translation services. And we're going to work in very close partnership with the Commerce Department to make sure that we have language services available for businesses. We have an excellent communication team in the Revenue Department. Our Director of Communication speaks multiple languages, so it is something that we're very focused on and we understand the need. So we will make sure that that is part of our plan and making that information available to people in all languages.
(Inaudible) meeting people where they are as opposed to requiring them to come to us. Most of the work that we did on the ground during the pandemic connecting people to the resources that were going to determine whether they were going to continue to upgrade their business or lose their business as a result of the pandemic, we were able to do successfully at your door, right, during those non-operating hours because we recognized that very small businesses can't afford to shut down to be able to come downtown to take advantage of a program. So I'm asking that we be very intentional about communicating with people where they are in their own neighborhoods and at their doorsteps. Thank you. COMMISSIONER McCOLGAN: Sure.
Thank you very much. The Chair recognizes Councilwoman Katherine Gilmore Richardson.
Thank you. Thank you, Council President. I apologize. Moms do get the job done. And I got a call from my kids' school and that comes first. So thank you all very, very much for this opportunity. And I want to thank Rob and Sabrina in particular for all the meetings that we continue to have ad nauseum over a number of items. But I want to start, I wanted to go back to a couple things that I wanted to get on the record. Now, Rob, you talked about the issuance of the bonds for the Housing initiative. Did you say they were taxable bonds?
Okay. But typically, aren't the interest rates -- are interest rates higher on the taxable bonds than they are --
-- on the tax-exempt bonds? Then why are we doing that?
Yeah. It gives us more flexibility in how to spend the money. There are things that -- programs that are part of the H.O.M.E. Initiative that would not qualify as tax-exempt.
Okay. Could you just detail them for the record because I know there's an issue, a challenge nationally regarding this proposed tax cut that's happening in D.C. that would impact cities like Philadelphia's ability around our bond issuance?
Yeah. That threat is to the tax-exempt status for all of our bonds which would be things like our geo borrowing. Every year we borrow for things like paving our streets or putting new roofs on police stations or renovating rec centers. So, yeah, that would have a high cost for us and cities around the country and probably cut into the amount of infrastructure investment that jurisdictions can make. For this borrowing we looked at -- and there were restrictions on tax-exempt. There are things that you can and can't do. So, for example, we have to invest -- we have to use the money for things that we own and that don't have any kind of private purpose attached to them. So we thought that for this bond issue there were too many things that wouldn't qualify as tax-exempt, that it would overcomplicate our ability to do the issue to make it --
So you know what I'm going to ask for, you already know where I'm going. And then this wasn't even in my line of questioning. I just heard you say the taxable bonds as a response to another colleague. And with the fact that the interest rates are typically higher, if there's a way to aggregate it out, what could be a tax-exempt -- I mean, what could be a taxable bond versus a tax-exempt bond and what the proposal indicates, that would be helpful. And specifically, those interest rates are at least two percentage points higher, right, spread out?
On average. Okay. I heard the bell. I'll just get a few more in really quick if that's okay, Madam Chair.
Thank you very much for the accommodation. I also wanted to go back to -- and I had this question for the Treasurer's Office regarding the issuance of the bonds and if we could get a breakdown. I do have the information that you all shared, but I wanted to be able to look at it from a historical perspective relative to the companies that are actually doing the bond issuance on behalf of the City. If you could give us information on the minority spend and which firms. And if you could break it down not just minority, but if you break it down, Black, Hispanic, Asian. Just give us a whole breakdown so that we understand what the difference has been over the past couple of fiscal years. I know I did go over this information with Jackie Dunn previously. I think it was maybe a year and a half ago at this point, and we did see some trends that were happening relative to the minority spend, particularly around the bond issuance. And I want to make sure that in this sort of environment that we're currently in that we're doing all that we can do to ensure that as a city that the folks that we contract with to do that work for us reflect the city of Philadelphia and the demographics of our city.
Okay. Just have it spread out over the last couple of fiscal years. And then really quickly I just wanted to notate something that Council President brought up around us maintaining our credit rating with the significant spend that is planned over the life of this Five Year Plan, particularly with the spend down and the low balance in the General Fund over the last years of this Five Year Plan. And then I just need to put this on the record really, really quickly. Pension Board, I wanted to say thank you to all the Pension folks. They have been wonderful. They worked with us with the ESG policy change at the Pension Board. And I just wanted to give them a special shout-out for all the great work that they have done and will continue to do up until 2033. And then finally --
We know, we know. But we know our big target year, and of course I need it for after 2033. And then for Revenue, very quickly I wanted to go back to the question from Councilmember Young because I remember working with our former Revenue Commissioner Frank Breslin regarding the change in the policy around homeowners or individuals that can prove equitable ownership in a property, that if they can show revenue that they are in the process of resolving a tangled title or deed, they will be eligible for a tax relief program with the City of Philadelphia. I heard my colleague's question regarding a property that may or may not be in a trust and that the homeowner still resides at the residence. I just want you all to put that on the record regarding that policy change that we worked on last term. And I need to know how many individuals have taken advantage of a tax relief program as a result of that policy change. COMMISSIONER McCOLGAN: Sure. I can confirm for you that that is in place and we'll be happy to get that information.
Okay. Thank you very much, Madam Chair, and thank you all so much. I'll submit the balance of my questions for the record. But I just wanted to put on, Rob, you know that I've done the wage investment amendment over the last several years, which is an opportunity to give people money back in their paychecks. And we want to ensure that we understand and we see the difference between the proposal from the Administration and the recommendations from the Tax Reform Commission. And I just want you to know that we will work with our team to get a few different spreads on that because I think you realize and you know that it's only .01 reduction each year over the five years of this plan. Okay. All right. Thank you very much. Just wanted to put that on the record.
Thank you, Council Lady Gilmore Richardson. Chair recognizes Councilman Phillips.
Thank you, Chairwoman. You mentioned the allocation of $30 million to support small businesses during this transition. Could you elaborate on how the City plans to ensure that businesses, particularly those that have never filed BIRT returns before, have access to these resources and be able to comply with the new requirements?
Yeah. So one of the things that we're doing to try to make sure that we have that kind of outreach and make sure that we get the program to the people who need it most is we're adding administrative capability in Commerce where employees in the 4 budget, proposing a budget, so that 5 they can administer the programs 6 and make sure they get to people 7 who need it. And the Revenue 8 Commissioner can talk a little more 9 about the outreach that we're 10 doing. 11 COMMISSIONER McCOLGAN: 12 Yes. So as I talked about a little 13 bit earlier, we are working in very 14 close partnership with Commerce to 15 identify those businesses and make sure that we are communicating to them their obligations and, very importantly, the support that's available to them in tax preparation and --
Thanks. Let me just elaborate on that question a little bit more so it's different from the one I asked earlier. Right now $30 million, correct, is going to go to several different -- the $30 million is going to be split to fund into several different entities within Commerce, correct, as opposed to one $30 million fund that these small businesses can go to and just apply for? They will have to apply to several different programs within Commerce to get to the $30 million for them, correct, for the business?
I think the idea is one central application and then Commerce and Revenue would help businesses figure out which program is best for them.
Okay. So it's one central application and then Commerce will disburse the money. Okay. That's better. Okay. Thank you. Now, just one more question. Given the education, medical institutions and government employment contributed nearly 45% of all wage tax revenue in FY24, what proactive measure is the City taken to mitigate potential revenue losses from federal employment reductions or research funding cuts?
So really what we've done is tried to put some reserves in our budget to help us withstand whatever impact we might have. And also, again when you look at our projections, part of what we're looking at in the projections is the impact of changes at the federal level. So those are the kind of things we're doing. I don't know whether that answers your question. I'm not sure --
It does. And I did forget I did have one more question regarding the OPA Office, Office of Property Assessment. How does the OPA ensure that neighborhoods with historically fluctuating property values receive fair and accurate assessments that reflect real market trends without causing undue tax burdens?
I'm going to ask AJ -- don't even have to say his name. He's here. (Witness approached Witness table.)
Good afternoon. James Aros, Chief Assessment Officer. I believe I caught most of that question, but if you could just repeat it so that I can answer it correctly.
Yeah. Just real quickly, so how does OPA ensure that neighborhoods who have historically fluctuating property values receive fair and accurate assessments that reflect real market trends without causing undue tax burdens?
So the tax burden piece would have to be separated out because the assessment may or may not accurately reflect somebody's tax burden due to abatements or Senior Tax Freeze or LOOP or any of that. But from an assessment perspective where we're just trying to estimate the value of the property, for all parts of the city we have a multi- year analysis as far as sales go and we break the city into 14 different residential zones. So there are multiple years of transactions that are considered for all properties in the city. If a particular neighborhood or area is seeing fluctuation in the market, that will all be taken into consideration and is in that analysis. So one or two of the most recent sales, if it were the peak of the market, won't unduly drag all of the values up because there's multiple years of transactions that are being considered. Likewise if there is a dip in a particular market at a certain time, if the market has been going in a different direction, it's all considered so that way we want to have enough representations, which is why we use five years' approximately worth of sales so that way no one particular burst of activity unduly affect the values in a neighborhood. We want to make sure we have enough transactions, because one sale doesn't create a market in any one particular part of the city.
Thank you, Councilmember. Chair recognizes Councilmember Thomas.
Thank you, Madam Chair. We have contract negotiations coming up, right? What unions again?
For FOP, Firefighters, D.C. 33, D.C. 47, Correctional, all of them.
Okay. And thinking about the Housing initiative from the Admin, the Admin is operating from the perspective that housing is the biggest crisis that we have in the city of Philadelphia, correct, more of a problem than poverty, correct?
Okay. Fair. So if the housing crisis is as bad as it is and a part of it is the poverty crisis that we're dealing with, we have contract negotiations coming up, how many City employees live in poverty?
Can we get that number? If we're talking about providing housing for City residents and City employees, how do we know that they can afford it? We have a contract coming up with contract negotiations. How do we plan on pulling D.C. 33 workers out of poverty so they can afford these houses we want to build?
So one of the things you heard in the Mayor's budget address is that we are committed to providing our employees with fair wages, and then that would be part of this collective bargaining process.
We need to know how many employees live in poverty so we can figure out how many of them we're going to pull out of poverty. So if we want to ask people to be able to move into these houses that we're going to be able to build -- a big problem that we've seen in the financial crisis that we've seen in the past was that people were moving into houses that they couldn't afford. And I don't want to set Philadelphians up for failure, so I think it's very important that we find out how many City employees are living in poverty and figure out what can we do with this labor reserve in this budget this year to pull those people out of poverty, because I think the poverty problem matches the housing problem. And I don't know what we're doing right now to pull people out of poverty based on the dialogue that we're having. Because if the people who work for us live in poverty, then we're the CEOs, right. We're the problem that we're talking about that other people are if we're the CEOs of the company who employ people that's living in poverty. I hear my bell going off. The borrowing --
You said that we don't have revenue. I don't agree with that because I think that if we looked at the anticipated revenue that we have, projected revenue over the last couple years, every year that I've been in City Council, those numbers have been far below what we've actually collected. There's been years where we've seen $100 million surplus, which means the revenue we thought we were going to have in the spring we ended up having significantly more. But with that being said, the Admin is looking to borrow $800 million to be able to look at housing-based initiatives over two different time periods with two different sets of borrowing. When -- years you've 22 been here I believe, right. When 23 have we ever -- 24
There you go. The kids will say 26 and 66 are the same thing, so we're all in the same category. When in the history of the City of Philadelphia do we traditionally see borrowing in that amount when it's not some type of emergency? I'm not talking about COVID. I'm not talking about the fiscal crisis of the early 2000s. When do you see this type of borrowing that the Admin is asking for when there's no emergency taking place?
I want to take one step back because you talked about our revenues and I have to say something.
I do think that we are facing really an unprecedented level of uncertainty both just the economy in general and with decisions being made at the federal level that may have a very negative impact on our economy and on our revenues. So I think we have to be mindful of that as we look at things. And, you know, I had to say that.
So we have done major borrowings for initiatives in the past, like the Neighborhood Transformation Initiative, which was a --
I was here for the Neighborhood Transformation Initiative and I don't want to take up too much time, Madam Chair, but that was an initiative that was specifically done to rectify the damage of COVID.
No. Neighborhood Transformation Initiative was in the Street Administration. You're talking about the Neighborhood --
10 You're absolutely right. I'm 11 sorry. Go ahead. Elaborate. 12
Yeah. So 16 that was $300 million borrowing 17 back in 2001 so that was a very 18 large borrowing. I know, and you 19 talked about it, NPI also large 20 borrowings partly because what was 21 going on with COVID and partly 22 because there were needs around 23 housing -- 24
Just so I can move on, how did that work out for us? That first borrowing example that you gave up during the Street Administration from a fiscal lens only, not a social lens, how do we end up paying for that? What did the timeline end up being on how we were forced to be able to repay that $300 million?
For NTI, for Neighborhood Transformation Initiative, it was borrowed with a set debt service schedule and it was repaid over that time.
Can you give us the time and how much we ended up paying, more than what we actually borrowed? I think that's what I'm trying to get to.
I forget whether those were 20- or 30-year bonds, but it's either or 30 years. And, right, for every borrowing we do there's an interest component.
7 Which means we were still paying 8 for that some 20 years later, 9 correct? 10
15 Thank you, Councilmember. 16 Councilmember, Harrity. 17
18 Thank you. If you answered some of 19 this, I apologize if I -- 20
Yeah, yeah, yeah. You're pretty funny today, Rob. This has got to be the biggest personality I've seen out of you since I got here.
I like it, yeah. You must have had a good morning. He's got me all geared up here now. All right. How are we ensuring that the proposed small business grants are properly advertised and accessible to those businesses that are losing the tax exemption through the proposed changes to BIRT?
Yeah, there's going to be extensive outreach both from Revenue and Commerce, and we've added additional staffing in Commerce to make sure that they can do the outreach and administer the programs.
I'm hoping that we're looking at avenues to advertise this stuff for areas that are going to look. So in cases like Councilwoman Lozada's District where it's Latino, we should have everything available in those languages to make it easier --
It was said during COVID, Councilwoman said it was hard because of that language barrier, trying to get them -- and it made a lot of extra work where if we would have just probably translated the stuff ahead of time and had it ready, we --
And to the Councilmember's point, we will go to people where they are instead of making them -
Yeah. I have a lot of friends of the Asian community and there's a lot of language barriers there, different dialects. So, okay. And then the only other one I really didn't get to ask was Philadelphia is recognized as one of the only five cities with a net pension liability lower than 100%. How does that impact our City's credit worthiness considering we are going to borrow the 800 million?
Yeah. So we've done a lot of work on pensions. We've increased our funding percent from the mid-40s to the mid-60s. Our actuary projects that we'll be over 100% or at 100% by 2033. When rating agencies look at us, that's one of the primary factors that they're looking at in the improvement in our ratings because our pension funding percent used to be much, much worse than other jurisdictions. And now, we're getting kind of to where they are. And so, that's a big help in our rating. And we'll continue to be as long as we continue to stay with the course of getting 100% funded.
So just so I got that right, we will make 100% funded by 2033?
Thank you, Councilman. I have a question just following up on Councilmember Harrity's question around ensuring small businesses are taking advantage of grants and programs and so forth. And this is more of a statement because it's probably more of an OEO question, but it brought to mind the lack of participation in a lot of city projects, with particularly African American and Latino business owners who want to be a part of a project that the city is the owner of. And over and over again we find that it's just still not happening, you know. Listen, I take a lot of heat because development is important to me in the 8th Council District. African American and Latino development is important to me, and that's something that I'm just never going to stand down from because you can't have these big projects and say that you want to see an opportunity for minority participation, but we'll do it later. We'll do it on the next project. We'll do it on a different project some other time, and that some other time never comes. So I'm certainly hopeful that with all that we're talking about doing, particularly with the $400 million borrow, that there is going to be some opportunity for minority participation in these projects.
Okay. All right. We'll come back around, Rob, for specifics. You're light on specifics right now.
Well, I think for that project probably the day when we have the full day dedicated to it is a good time to have that conversation.
Absolutely. So look forward to that. Chair recognizes Councilwoman Gauthier.
And for the record, Rob, I think your personality is very big. Okay. How successful has the department been in enrolling homeowners in property tax relief programs and are we meeting our goals? For example, I noticed that only about 75% of eligible households are currently enrolled in the Homestead Exemption. Yet the FY25 performance target was around 81.5% of eligible homeowners receiving relief. So what is the department doing to close this enrollment gap through outreach? And can you share the results from FY25, specifically the number of new residents enrolled in programs such as Homestead, Senior Freeze and LOOP and whether these efforts have made progress towards our 81.5% goal? COMMISSIONER McCOLGAN: Councilmember, that was a lot of questions while I was coming up so I might need you to repeat a few. But I can tell you that right now we are at approximately 77% of enrollment across all assistance programs. And I'm sorry. Can you --
No, no. Thank you. That's fine. What are we doing to close our enrollment gap and get even more people enrolled? And then can you also talk about the type of outreach that you conducted with the additional $1 million from City Council that came in the FY25 budget, what was most impactful in terms of those outreach strategies and what would you change? COMMISSIONER McCOLGAN: Okay. Thank you. So what we're doing in terms of more outreach and what we would change is to create the universal application for all assistance programs. So we're very excited about that initiative and we believe that it's going to make it much easier for property owners to apply for assistance. And in that development our goal is to remove as many barriers as possible while we make sure that people are entitled to the programs that they're applying for. We had a very robust outreach campaign last year to get folks into all of the assistance programs, of course highlighting the new Low-Income Tax Freeze. But we made sure that all of the outreach included all of the assistance programs. The Mayor, you know, it's a huge initiative for the Mayor and priority for her to enroll as many people who are eligible as possible. And so, she sent out a letter to about 350,000 potential owner-occupied properties which listed all of the assistance programs, and that was before the Low-Income Tax Freeze was even online and letting them know that it was coming. So she made sure that she got that information out to property owners as soon as possible. We worked very closely with the Mayor's office to build that campaign and we had SEPTA advertisements. We had radio advertising. We also partnered with the Mayor's Office of Community Empowerment and Opportunity to send text messages to property owners where we were able to call them and they actually also did door-to-door outreach. So we had printed flyers, information that we left. I know that they attempted over -- I'll confirm the number -- it was well over 100,000 outreach attempts with successfully engaging in over 10,000 opportunities. Does that answer all of your questions? Did I miss something?
Almost. Are we tracking what works best? In lieu -- I think obviously the gold or platinum standard is auto-enrollment for all these programs. But in lieu of that, I think we should at least know what outreach works the best, particularly in neighborhoods that have experienced high increases in their property taxes. COMMISSIONER McCOLGAN: I agree with you, and that is something that we're working to do. I don't think I have an answer for you right now, but that door-to- door outreach is still ongoing and that's work that we're continuing, so we can gather the data that's available to us to be able to provide you with information on what's most successful. We also have an assistance outreach map that shows us where throughout the city we feel that people are most eligible for programs and we've used that as an opportunity to benchmark where we were before this so that we can monitor in the future where we've been successful. And then earlier I had mentioned the internal working group that we developed which is what, you know, we're meeting every two weeks to really analyze what we're doing, what works, what language works. And hopefully, that will be the outcome of that engagement as well, to be able to refine our processes and say, here's our best practices and make sure that it's something that's repeatable and time-sensitive to even know when is the best timing to engage with people to make sure that they're getting enrolled. So that's something that we're looking to document and repeat year-after- year.
If you could gather information on all of that, right, and how well it's working, Council would be appreciative. COMMISSIONER McCOLGAN: Yes, we'll look into that for you.
Thank you so much. I have some questions but I'll be submitting those in writing and request for a meeting because it's related to the lawsuit. So just to give you guys a heads-up. But my other question is, right now our Pension Fund invests roughly 12% of the fund in private equity, in private Wall Street venture capital funds that are famous for buying luxury developments and for undermining the workers who pay into the Pension Fund, including through union busting and large scale firings. What would it take for the fund to follow the example of the New York City pension fund, which has had a longstanding program to invest 2% of its assets in housing that has produced almost 100,000 units of affordable housing or invest in the AFL-CIO HIT program, which is a $7 billion fund open to investments by pension funds that has created 130,433 units of housing while generating more than 240,000 jobs?
In general we are open to any type of investment so long as it meets our investment criteria. In addition to what you discussed about, we do have a responsibility to our pensioners to make sure that they're going to get their pensions. With that said, we look at any proposal that we get that will show us what an investment is, what its return is and what its risks are.
So the Pension Fund has said that it has the capacity to report to the City Council on the nature of its pension investments and you promised to do so last year. What is the status of that report?
I'm going to ask Fran Bielli, the Executive Director of the Pension Fund, to come up and answer that. (Witness approached Witness table.)
Good afternoon, Councilperson Brooks. Good to see you. My name is Francis Bielli. I'm the Executive Director of the Board of Pensions. Our entire portfolio is posted online every single month in our Flash report. Our meetings are public. We also provide the report to Helen every month, the City Council President's designee. So our entire portfolio, each particular investment, is listed in that Flash report. And I would just add to what Rob said. We are stewards of the Pension Fund. The trustees of the fund make the decisions concerning investments. They do so within a legal framework of a fiduciary duty. However, I will add that being a steward of the fund and still making investments that do good are not mutually exclusive. So I want everyone to be aware of that. However, to date we've been working with people who have inquired with the fund concerning your question as to whether or not we would do certain investments. Each of those examples you gave however can be distinguished in different ways because they all had peculiarities to them. For example, the New York program, which they've cut back greatly recently, the state passed a law ensuring there would be no 7 loss to the New York pension fund in any of those investments. Massachusetts has a plan, for example, which provides funding through the state, not through the state pension fund or through local Boston pension fund but through the state general revenue to assist people in getting discount mortgages. So all of the plans we've looked at, we've researched. Our Chief Compliance Officer, former solicitor of Montgomery County looked at -- we've looked at all of them. And we've also provided a blueprint or guidance for anyone who has inquired, whether it be the Home program or through folks who have inquired through Councilmembers, a blueprint of what the Board requires, what the Board looks at in evaluating any potential investment. So to date we have received no proposal, just general requests to look at things. So we're glad to continue those conversations. But just again keep in mind, this is for everyone, being a good steward of the fund and doing good are not mutually exclusive and we're willing to work with anyone who has an idea.
Thank you, Councilwoman. Chair recognizes Councilman O'Rourke.
Thank you, Madam Chair. I want to talk about small businesses as others have been talked about them as well. As we all know, the businesses that make less than 100,000 a year have been exempt from paying or even filing the BIRT tax. The Mayor has announced since she's eliminated this exemption, we've talked about this at end, which will make entrepreneurs' lives harder. What I'm hearing from my constituents is that this will be a massive administrative burden for small businesses. 70% of Philly businesses don't file currently or pay the BIRT currently. I just want to note that this is extremely concerning to us. And cutting the BIRT tax, which provides a huge portion of City revenue, raises significant concerns about the long-term impact on our tax structure and how it affects property taxes in particular. So what percentage of these impacted small businesses will Commerce Department's JumpStart Small Business Plan actually be able to reach?
So we can get you specific numbers that we project that we will reach.
Also, I want to put on the record that this is not something that we sought out to do or wanted to do. We understand the problems it creates. I wanted to make sure that that was on the record.
Thank you, sir. One of the things that makes Philadelphia special is our long legacy of working-class homeownership. Everyone on this Council cares deeply about making sure we continue to address the affordability crisis far too many face as we've heard through the questions that have come up. But if I'm understanding things right, it seems like increased property taxes or hard choices are likely to follow. I doubt that's the Mayor's vision, but this plan will force us to make our choices either way. If the trickle-down plan works, then the economy grows. We add jobs and businesses, land values almost certainly rise and, thus, assessments rise or if the City's economy does worsen than projected for any reason, then our hands will be tied by over a decade of wage and BIRT cuts written into law and at that point we'll have to choose between raising property taxes to make up the shortfall or cut City services which will be a tragedy. And I raise this because we're facing a real crisis of gentrification driven by increased property assessments, and this Council has taken strong, decisive action to prevent the displacement that this causes. I commend all of us on that point. So why is this a risk worth taking for this Administration? In other words, why are we willing to pursue these business tax cuts and wage cuts without considering these scenarios?
So first of all, I want to kind of push back on the trickle-down characterization. I think these are cuts that will help businesses of all size. Most of the businesses who pay the BIRT are small businesses, will help employees at all different wage levels. So it's not the Ronald Reagan trickle-down economics. And we're also proposing a massive investment in housing to try to make sure that there is housing available for people in Philadelphia. We also want to make sure that there are jobs available. And part of the reason for this investment and the other investments that we're making in our economy is to try to spur the economy and to make sure that there are more jobs.
Let me -- if I can just wrap up real quickly, I'll be real tight, Madam Chair. Thank you. Yes, ma'am. As you all know by now, maybe you know by now, the Minority wing disagrees with the Administration's view on the BIRT exemption. We've proposed extending the exemption to 200,000 which fully exempts businesses that generate less than 3% of BIRT revenues. And of course, all businesses would be able to exempt 200,000 if Council were to make this change. If you could -- well, not now. I prefer if you maybe just send me in writing, if you could. Could you share the impact that raising the exemption to 200,000 without cutting the tax rate would have on overall BIRT revenues? So if you could submit that to us, that'd be great. The other thing I wanted to say was -- and I'll get off your mic -- I'm also concerned about the uniformity clause and how much it constrains us from proposing more progressive taxes. So I was happy to see that lifted up in the Tax Reform Commission's recommendations. They have called for the City to develop a strategic plan for uniformity clause reform. Have any of the departments that are present today been directed to develop a concerted, specific, strategic plan to lobby for uniformity clause reform?
Yeah. So we have definitely had conversations about uniformity clause and what to do about it. You know there was a proposal that made its way through the legislature one year but had to get through it two years so it didn't go anywhere. So a specific strategic plan to get there, no. 22 We would be happy to work with you on that.
Thank you. That's great news. Thank you very much, Rob. Appreciate you. Thank you, Madam Chair, for your grace.
Thank you, Councilman. Chair recognizes Councilmember Landau.
Thank you very much, Chair. Couple quick ones: First, based on Majority Leader Gilmore Richardson's questioning, there's going to be interest on our borrowing. Do you have an approximate idea of how much that interest will be and whether you believe it will be variable or fixed?
It will be fixed, and we can get you the specific amount of interest per year.
Actually, hold on. I can probably tell you. And it'll vary by year as we amortize the debt service. So it starts off -- it'll take me a second to find it.
-- Revenue Commissioner come on back up too. I have some other questions here.
Yeah. So the interest which starts about the $33-34 million range and then can I -- as you go further in it, it changes year-to-year, but that that's where it starts.
Revenue Commissioner, thank you so much. Again, you've been talking about a universal application for the housing tax programs. And I just want to be clear, the previous City Controller had an online application that allowed folks to go in and to see the various property tax relief programs and would help calculate things for them so they could choose which was best for them. Is that what this would do as well? COMMISSIONER McCOLGAN: I'm really glad that you brought that up. I'm not familiar with the Controller's Office application. But the intent for this universal application is it to ask upfront questions of the applicant to determine what they're eligible for so that we can essentially tell them, here are the programs that you're eligible for. So that is the intent. And also, I just wanted to highlight that the Revenue Department worked in partnership with OIT to build an online calculator for property owners so that they can go on and do an estimated calculation of the assistance program that will benefit them most. And so, we're really happy to be able to provide that to property owners as well.
Okay. Thank you. And the Revenue Department used to have a taxpayer ombudsperson but that position hasn't been filled in two years. Is there any thought to have an ombudsperson? COMMISSIONER McCOLGAN: I'm sorry that I can't speak right now to the history of that, so I can get some information for you on that. But I can say that our intent is to fill -- our goal is to fill all of our positions and streamline our processes and utilize the technology that's available to us to provide functionality to residents so that we have done everything that we need to do so that they don't require the assistance of an ombudsman.
Okay. Madam Chair, can I just put a couple of more out there about --
We'll come back, Councilwoman. Just so that we can move it along because I do want to recognize Councilmember Driscoll who has not had a first round yet. So, Councilmember.
Thank you, Madam Chair. This quick question for the Revenue Commissioner: It's my understanding that on construction projects that certain items are eligible for reimbursement or sales tax refund. Language has been put into the contracts several years ago. The two things that are being brought to my attention is some of the contractors are applying for these refunds and not giving the City the money. That's one issue. And then an equally big issue is I'm told that the School District does not have the same language in their contracts as we as a City have in our contracts. So I just want to start with your department to see if you can look into that matter because I think we're talking big money here, particularly with us building the new schools now. And as I understand it, if an item is not permanent and there's a lot more language to it than that, it's eligible for sales tax refund. And so, you might not think an air-conditioner, a giant air-conditioner on the roof is not permanent, but the state sees it as not permanent and it's eligible for a sales tax refund. So to the extent that this number is so large, I just want to make sure that we're getting that money back for the City in the contracts that the City is letting, and to the extent that we can communicate with the School District, that they have the same language you have in the contracts. COMMISSIONER McCOLGAN: Sure. Thank you for bringing that up, Councilman. I have had conversations and was grateful that your office brought that to my attention for the potential for there to be sales tax refunds. Certainly, it's in all of our best interests to identify any funds that are due to the City. That is something that I've met with the CAO's office on, and I know that they are in the process of analyzing any instances where we may have paid sales tax when we should not have and reviewing their processes to ensure that if there are any gaps there that they can close them, but they've not completed that analysis. So it is something that they're working on right now. They have been working on it.
Thank you. COMMISSIONER McCOLGAN: Sure. And then we'll have to talk about the School District piece separately.
Yeah, because that's big money. COMMISSIONER McCOLGAN: Thank you.
Thank you, Councilman. Chair recognizes Councilmember Ahmad. And I'm going to ask Councilmember Landau if you would be willing to put your questions on the record and get responses in writing just because it's now time for public comment. So we don't want to keep the public waiting. Councilmember Ahmad.
Thank you, Madam Chair. I had a question for OPA. I wanted to find out how we're doing with respect to constituents who are appealing their assessments. And I wanted to really understand the mass appraisal valuation that was instituted. And have you seen a decrease or an increase in constituents looking for relief?
So the mass appraisal process is a two-hour- plus conversation that we'd love to have with you and your staff, that we give you the presentation. But it's been since tax year 2014 which was the actual value initiative year. Since then we're just doing regular assessment work. We that year saw close to over 20,000 formal appeals with the BRT and approximately 60,00 first-level reviews. The '23 and '25 tax year revaluations have produced similar numbers with both FLRs and BRT appeals. So roughly around 20,00 first-level reviews each of those years, roughly around 11,000 or 12,000 BRT appeals. So that number has been consistent but is significantly lower than when this process first started over a decade ago when we started doing mass appraisal at actual value or 100% of what we estimate the properties would sell for on the open market.
So that's good news. However, we would like to reduce that number. And I was encouraged to hear our Revenue Commissioner talk about door-to-door kind of approach to making sure people knew about what programs can give them relief on their tax side. So this model that you have doesn't really have a specific looking at a block, and tell me if I'm wrong. If there's a sale on a block and then you have a reappraisal of the values of the other homes, how specific is the property characteristic part of it done? Meaning, there could be people who didn't pull a permit to do improvements or people who have made no improvements and they're getting lumped into this increase in value for this one property. So this drive-by approach versus really disaggregated way of really assessing true value would really help with reducing our appeals and of course putting more money in our constituents' pockets.
Sure. So as I spoke to earlier to Councilmember Phillips, one sale does not create a market in any area of the city. So when a property sells, we collect or try to verify the characteristics of the property at that time of sale, whether it's the ones we have on record or if it has changed, maybe there was permitted or unpermitted work done to renovate the property that we were not aware of. Once we classify that, those sales go into individual buckets. So in other words, a property that is renovated does not drive the value or the assessment of a property that hasn't been improved in, say, 20 or 30 years. There's not a factor that's applied that increases that value just because this one particular property or several particular properties sold at that rate. So overall, size, condition, age, location are the main driving factors that go into value. But the sale of a new or recently renovated home does not generate a factor for an older home on the block. It's what those older homes are selling for that we've put into the mass appraisal process, yes.
So in other words, people can with confidence know that they have been properly assessed, even though there have been some spikes in their block, right. The answer I have to give to my constituents?
Yeah. I mean, the issue that we get, and I know if this is what you're getting at, but it was asked outside of the questioning yesterday, if two properties look the same from the outside, somebody did unpermitted work that we're not privy to but their property would in theory be worth more, if they don't put that on the market or doesn't sell, we have no ability to know that, so that's a limiting condition. Doesn't mean we're doing our job wrong, but you could certainly argue that they're being undervalued compared to their neighbor.
But that's kind of the -- if they're not caught by L&I or somebody else doing that work and they get by without a fine, then until, you know, there's not a law that allows us to get into anyone's individual property at any given time. We'll come out and do an inspection on any property if we're invited. But short of that, there's no way for us to force our way into an individual property and make sure that somebody is not doing anything illegal or doing work that was not documented properly with the City.
So in other words, when there's a sale that triggers a reassessment, there is sort of a door-to-door kind approach that --
Yes, we'll look at available sources. Now, years ago we had access to the multiple listing service. That was taken away from municipal jurisdictions for reasons I can't really discuss right now, but you can guess. But there are publicly- available sources where we can say, okay, this is a sale and here's what the property looked like or were there any permits pulled, was there any work done. And that way if we have it as, say, an average condition property but it was actually renovated, we recode it as renovated and that sale is not used to value other properties on the block that have not been renovated.
All right. Thank you. Thank you for that. And one last quick question is stocks in nuclear weapons. This is for our Pension Fund. Do we have any investments in nuclear weapons? Not nuclear energy, nuclear weapons.
Our Chief Investment Officer Chris DiFusco is going to come up and answer that question. (Witness approached Witness table.) MR. DiFUSCO: Good afternoon, Councilwoman. Thanks for the question. We've been approached about that proposal. Christopher DiFusco, Chief Investment Officer. We've been approached about that particular proposal. As we've explained to the folks who've come to us, the companies I believe they're targeting do not make nuclear weapons. They may make parts where they may make certain materials that wind up down the line in nuclear weapons, but that is not the core function of their business. And I'm happy, if we need, to provide some additional information to your office on that.
Not core function. That would be useful to have. And we have divested from gun manufacturers. We have divested from other things. And I just wondered the comparison of how specific those companies were in whichever issue we addressed should be the same for this. I just wanted to make sure that we're being apples and apples in terms of how we assess whether we divest or not from a particular, you know. MR. DiFUSCO: So many of those divestment decisions were made at the Council level. For example, Northern Ireland -- I'm blanking now.
Gun manufacturers -- MR. DiFUSCO: But Northern Ireland just being a key, Sudan, there's a whole host. Then the board has also considered other proposals or brought proposals on their own to the table, private prisons being one. We provide any analysis that Council or the trustees ask on the impact of the number of companies that will be impacted, you know, the amount of potential gains or losses, how it might add risk to the portfolio or not. So we go through a pretty laborious and time-sensitive analysis, whether it's at Council's request or member trustees.
Do we need to make a formal request or this is a request to get some information? MR. DiFUSCO: We can provide additional information to your office.
Thank you very much. Appreciate your indulgence, Madam Chair, for letting that question in.
Thank you, Council Lady. Councilwoman Landau, would you like to state your questions to be on the record and get written responses from the Administration?
Thank you very much, Madam Chair. I wanted to know just for the record how the Revenue Department is doing with tax collection and whether or not we can get a breakdown of how they're doing with tax collection based on all of the major categories and the size of the companies. These are for business taxes, how they're doing with the size of the companies. Second of all for OPA, will OPA be completing and mailing out notices of new property valuations in 2025 for tax year 2026. In 2024, the notices of valuation were mailed out in August of 2024 leaving taxpayers with less than 60 days to file their appeal. When will they be mailing them out and publishing online for 2025 and is there a plan to mail them sooner in the future? And will the OPA post the new valuations online prior to mailing so that they will at least be available online as soon as possible. Thank you so much.
Thank you, Council Lady. So if you could provide those answers to the Chair for members in writing.
All right. Thanks, Rob. Okay. Thank you very much. We're now going to move into our public commentary. I want to thank the Administration for coming today as we begin the transition. Okay. We are going to get started. We're going to ask everyone to take their seats so that we can get started. Okay. We are going to get started. We will now begin taking testimony from the public on the City's proposed tax bills. Before proceeding however, I will lay out a few ground rules on how we will proceed with public testimony this afternoon. The ground rules: We are here today to take public testimony from you about the City's proposed tax revenue measures to ensure that there is an opportunity for all of you to be heard. Certain ground rules have been established as follows: Your testimony should be about the City's proposed tax revenue measures. Once your name is called, you will then have up to two minutes to speak. In order to be fair to all of those wishing to speak, I intend to hold faithfully to the two-minute limit. Once you are asked to begin your testimony, a timer will be started where you will be given 30 seconds and there will be 30 seconds remaining to your time. You'll be reminded that it's only 30 seconds left. Once your allotted time has passed, you will be asked to conclude your remarks. And I would now ask Ms. Loughead to please read the name of our first two speakers for public comment today.
The first two speakers are Natalia Dominguez Buckley and Mitch Chanin. If you could both come up to the podium if you're present. (Witnesses approached Witness table.)
Thank you. Please state your name for the record and proceed with your testimony.
My name is Natalia Dominguez Buckley and I'm here with the Greater Philadelphia Hispanic Chamber of Commerce. So proceed? Okay. Thank you. So my name is Natalia Dominguez Buckley and I serve as the Board Secretary of the Greater Philadelphia Hispanic Chamber of Commerce. Thank you for the opportunity to testify today on behalf of the chamber and the thousands of small businesses we represent across the city. Philadelphia has long been a city of hard-working people. Yet for too many, hard work does not translate to economic security. That is because our tax system discourages the very businesses that create family-sustaining jobs. The work of the Philadelphia Tax Reform Commission makes one thing clear: Our tax structure is not just outdated, it is holding our city back. We appreciate that Mayor Parker's Fiscal Year 2026 budget proposal includes much-needed reductions to the Business Income and Receipts Tax, BIRT, and the wage tax, aligning with several recommendations of the Tax Reform Commission. However, while these are encouraging a start, further action is needed to make Philadelphia competitive with peer cities. Ultimately, if we're serious about fostering economic growth and reversing decades of business blight, we will have to do more to reduce the tax burden on businesses of all sizes. At the same time, we're deeply concerned about anticipated elimination of the $100,000 BIRT exemption, which currently shields the smallest businesses from the burden of Philadelphia's tax structure. While we understand that this is not a voluntary policy change but one necessitated by legal action, the reality is that without this assumption as many as 120,000 small businesses, many already operating on a razor-thin margin, will now be required to pay BIRT regardless of their profitability. So we acknowledge and support the Administration's proposal to allocate additional funding for small business support programs aimed at mitigating the impact of the elimination of the BIRT assumption. However, a more direct and immediate mitigation tool will be to implement quarterly BIRT filings, as recommended by the Tax Reform Commission. Currently, businesses must pay the entire BIRT liability upfront creating significant cash flow challenges, especially for small businesses that experience seasonal frustrations in revenue. Allowing businesses to file and pay quarterly will provide much-needed flexibility, reducing financial strain and enabling them to better manage their operations. Beyond direct taxation, another overlooked reality is that a strong small business sector depends on thriving corporate presence. Large companies provide contracts, partnerships and steady customers that small businesses rely on. Whether it is a cleaning service hired by an office building, a cater providing meals for corporate events or a tech startup securing a contract with a major firm, small businesses flourish when they have access to well-funded corporate clients.
So in summary, a stronger business climate means more jobs, higher wage and a larger tax base to support the service Philadelphians relied on. If we want to break the cycle of poverty and create true economic opportunity, we must stop pushing away the very businesses that create middle-class jobs. This is not a choice between businesses and residents. It is a choice between a thriving, growing Philadelphia and one that stagnates. We are a critical junction. The elimination of BIRT assumption places new pressures on small businesses. Make an immediate tax reform not just a goal but an urgent necessity. The time to act is now. So thank you so much for the opportunity.
Thank you for your testimony. Thank you. Please state your name for the record and proceed.
My name is Mitch Chanin. I live in Northeast Philadelphia and I come from a Philadelphia Federation of Teachers family. My parents worked for decades in underfunded Philly public schools and I attended those same Philly public schools, and that's how I first learned about fighting for justice. I'm here today with a pretty different point of view from the first one and I'm here to talk about courage. So first to state clearly, I strongly oppose the Mayor's proposal to slash the BIRT while eliminating the $100,000 exemption. Recently, I heard Reverend Greg Holston call this a reverse Robin Hood tax plan. This move would mean that our smallest businesses pay more along with independent contractors like me, and if I'm understanding correctly, low-paid gig workers. It would mainly benefit the largest corporations and their wealthy shareholders and it would cut revenue that we need for essential services. Mark Stiers' recent report for the Pennsylvania Policy Center showed that the plan would do very little to bring new jobs, and there's little reason to believe that people who are suffering from poverty would benefit substantially from any job growth that it induces. We need you, our City Council, to find the courage to say no and to fight for just tax policies. Every day we see billionaires gaining more wealth in our expense and more power over our lives and watching Elon Musk in the Oval Office and brandishing his chainsaw really drives it home. Already the three richest people in our country have as much wealth as half the population, and we should not lose our capacity to be shocked by that. And it's getting worse. There's a lot of talk right now about which elected officials are standing up against oligarchy and fighting for regular people and who is caving in. And we need you, our City Council, to fight for us. The crisis of inequality is driving all of our other emergencies. Unless we tax the rich much more and dramatically reduce inequality, we can't solve the problems we face. We can't give our -- I'll be done very quickly. I'm sorry. We can't give our kids the education they deserve and homelessness, provide addiction services that Philadelphians need or more. We can't fully fund CCP where my friends just spent months courageously preparing to strike in order to fight for themselves and their students. And in the face of this crisis, we need you to act courageously. This tax plan is the exact opposite. Mayor Parker has said we must repeal the $100,000 exemption because the City might lose in court. And to me, that looks like surrendering to oligarchy. Courage would mean fighting in court to preserve the exemption, keeping the BIRT place and working to increase the amount of the exemption and it would mean building alliances statewide to push for the Fair Share Tax Plan that Senator Haywood and others have proposed and to overturn the uniformity clause. That's something Mayor Parker --
Two more sentences. That's something that Mayor Parker talked about working to end the uniformity clause, but where's the action on that. We need City Council to get in the game. Encourage would mean supporting Councilmember Brooks and O'Rourke's local Wall Street asset tax. My friends at CCP just spent months getting ready to strike and that showed us what courage looks like. Will you be courageous? Thank you. (Applause.)
Next we have Bernadetta Rivera and Jigar Mehta following. (Witnesses approached Witness table.)
(Spanish translation). INTERPRETER: Good afternoon. My name is Bernadetta Rivera. I live in South Philadelphia and I work cleaning homes and taking care of children and senior citizens for years. 14 I'm a member of the National 15 Domestic Workers Alliance, the 16 Pennsylvania Chapter. 17
(Spanish 18 translation). 19 INTERPRETER: I am very 20 concerned about the current tax 21 plan and the budget because it will 22 cut taxes for large corporations 23 and millionaires and we need this money to fund our city.
(Spanish translation). INTERPRETER: It is very important that the City invest money in needed services like libraries, schools and parks for the children. We also need a big investment in city offices such as the Office of Worker Protection, which implements and enforces our labor laws and is currently underfunded to protect us workers.
(Spanish translation). INTERPRETER: If the wealthiest people in the city are not paying their fair share, there will not be enough funds that are needed to defend our rights through the Office of Worker Protection, which currently needs $3.1 million out of this budget. The wealthiest must pay so that the working people can prosper. Thank you. (Applause.)
(Spanish translation). INTERPRETER: Hi, everyone. Good afternoon. My name is Christina Flores and I work cleaning homes and restaurants. I am a member of the National Domestic Workers Alliance, Pennsylvania Chapter.
(Spanish translation). INTERPRETER: I am here to talk about the plan to cut taxes for the wealthiest people and why this concerns me. The money needs to go to the needs of the city. If taxes are cut for the wealthy people and for big businesses, there will not be enough money to meet the needs of our city.
(Spanish translation). INTERPRETER: For me it is very important to invest in public safety and also public cleanliness, for example, by picking up the trash from the streets and making sure that the trains are clean and safe. It is a big problem for those of us who have to take public transportation.
(Spanish translation). INTERPRETER: As a worker, it is very important also that there be a fair budget for Workers Protection Office of $3.1 million. This is to make sure that when there is a problem with the employers, we have somewhere to go for support and advice. We don't want to feel alone without protection.
(Spanish translation). INTERPRETER: We are fighting for anti-retaliatory law, the Power Act, and this requires sufficient funding. If they cut taxes for the rich, it won't be enough for us, the working-class people. Thank you very much. (Applause.)
And then following, we'll have John Gattuso and Johnny Barry following.
John Gattuso to follow. And then after that would be Brad Wilhelm.
Thank you. My name is Jigar Mehta. I'm with the Asian American Chamber of Commerce and I'm joined by other small businesses of the Asian American Chamber of Commerce. First, I want to thank City Council for quickly having this meeting. We received the terrible news last week that the $100,000 BIRT exemption was going to be taken away. The first thing that we did as a policy group we started downloading the 2023 and 2024 taxes and tried to figure out what does this exactly mean. And we took an example, and it's in the document that was provided of the mom-and- pop family shop. Basically, this business got started during the pandemic. If they're an immigrant family, we have the same systemic barriers as our justice-impacted brothers and sisters do. We are not able to get jobs because of a language barrier, where they may have a barrier because of past criminal history. What we -- this business, mom-and-dad, they got together during the pandemic and they basically stabilized the business in 2023. After they stabilized the business, they realize they're doing pretty good. This is a conservative family. They're looking at the MIT living wage expenses and they're living within their means. They're not going out there spending a lot of money, but they're able to put away $3,000 a year. Now, they decided in 2023 if they can stay the course, by 2030 they're going to buy a house. And what they're going to need is $30,000 to put that deposit down to build that rowhome in Philadelphia. Now, all of a sudden we find out that that dream is going to be deferred. The first thing after we started looking at the taxes, we saw what the impact is going to happen in 2025. We realize because of the way that the tax structure is set up with the BIRT tax, that there is a mandatory tax payment that has to be made. Now, this is for a cash flow issue. We need the cash flow for Philadelphia. What this does, this hurts the cash flow for the family. Now, if you're making $3,000, you put your money in the index fund at 8%. You're going to hit that $30,000 mark in 2030. But with this, you go into debt. So imagine that you've been planning for the future. You're doing everything right. You keep your -- you're within the means. But then in 2025 with this announcement, you're $1,600 in a hole. How do you get out of that hole? Of course, you got good credit. You're making 3000 bucks saving every single year. You're going to start using your credit cards. That's a 23% interest rate on those credit cards. So what happens then every single year? $1,500 less every single year for you to put away for your house so now your savings are cut in half. Your savings are cut in half. So in 2030, you're left with bad credit and you're left with instead of 30,000 for your house, you're left with 17,000 for the house. Now, we looked at this. Then the board got together and said, well, wait a minute, how many houses are really going to get affected by this. So, okay, who are we actually representing? So we started looking at classifications of business. We saw that, hey, there is an incorporated business, Inc. and then you have the unincorporated businesses. And then dig a little bit deeper into classification, it's going to get a little wonky here. If you dig a little bit deeper, you're going to find there are employers and there's nonemployers. Now, the nonemployers, these are the good men and women in this room that we're representing, that they're the family businesses. They're doing it just for themselves so they can get out of a hole. Now, this tax hit is going to hit them the most, the nonemployer. With this nonemployer, what we're recommending is that, hey, let's give these guys a break. We understand that there's a tax structure that's complicated. It's stuff -- there's a lot of things. If we try to fight this at the state level, yes, we can try to fight it but the reality is this is happening now, so this is an emergency now.
So what we're asking for all of you is first just to meet with us, meet with the Greater Chamber of Philadelphia Commerce Department, meet with the Asian American Chamber, meet with the diverse African American Chamber, meet with the Hispanic Chamber and let us work together, look at the data. We will look at the data with you and we will try to figure out what is fair and equitable for all of Philadelphia. So this is the part that --
Okay, I'll summarize real quick. So what we're going to be recommending is separate the classes for incorporated, unincorporated for nonemployers. And for unincorporated, reduce BIRT tax rate for estimated payments, reduce estimated payments. And now, we think we need to incentivize job creators. So what we're asking for is that for incorporated and unincorporated if you're a subclass as an employer, then please provide us for a refundable tax credit. All of us want the same thing. We want a safe, thriving, effective, equitable and efficient Philadelphia. Thank you very much.
John, please state your name for the record and proceed.
Yes. Good afternoon, Councilmembers of Council and members of the Administration. My name is John Gattuso, President and CEO of Gattuso Development Partners. And I thank you for the opportunity to provide testimony today on behalf of myself as a resident of the city and as a small business owner here in the city as well as on behalf of the Chamber of Commerce and our Board of Directors. Philadelphia's well- publicized status as the poorest large city in America is a direct result of its tax policy over the last 50 years. Let me begin with what is a shared concern that our economy as a result of that tax policy is underperforming. And over the last several decades, we've lost ground. Since 1970, jobs in the city have declined by 23%. Meanwhile, our sister cities on the Eastern Seaboard, New York, Boston, Washington have seen double-digit job creation. These peer cities continue to grow while we are stuck in neutral. The root of the problem is that Philadelphia has too few private employers. Most of the region's mid-size and large private companies are situated within just a few miles but outside of the city in the suburbs. Within the city limits, our largest employers are overwhelmingly government nonprofit eds and meds. And while these institutions are valued and they are providers of good jobs, they cannot typically grow employment at the rate that the private sector can grow employment and they are typically not generators of wealth. Now, why are private employers unable to grow here and why are they avoiding the city? And the answer is simple: This is one of the most expensive places to do business in the country. You're all well aware of where our wage tax sits and you are well aware that we have a double taxation on business income. Our combined corporate tax burden is about 14.3%, significantly higher than our neighbors such as Pittsburgh, which is about 8.5%, Chicago at 9.5% and D.C. at about 8.25%. It's important to remember that capital is fluid. It's not permanent. It can easily move over borders, and that's what it's been doing out of Philadelphia for the last 50 years, and this makes the city uncompetitive. And businesses are telling us this in a survey. Over 80% of our business respondents in a recent survey said reducing taxes is the single most important thing the City can do to help the city grow to grow employment and to grow revenue. And I'll give you an example. My own firm, which we formed six years ago, decided to locate in Philadelphia. I will tell you, and I'll wrap up very briefly here, we were absolutely advised strongly by our accountants not to locate, situate the company in the city of Philadelphia, that it was a negative not only to the success of the company but to our ability to attract quality employees. We chose to locate here without regard to that. What we should not do is to continue doing what we've done and expect a different result. We would like to suggest, urge really, that Council give serious consideration to more aggressive reductions in both business tax and wage tax. And the principal source of the funds to do that would be assuming a nominal amount of growth, which the city of Philadelphia has been experiencing over the last 10 to 12 years, about 1 to 1.5%. If we were to invest that growth into tax reductions, you would see a significant increase in City revenue, in job creation and in wealth for our citizens.
Okay. Thank you. The biggest risk, the biggest risk we can take as a city is to not take the risk in believing in the city and in its future growth, and we will condemn ourselves to continued nominal or no growth if we continue to choose a policy which is discouraging to business formation and job creation. Thank you very much for hearing my testimony. I encourage a well-balanced approach to looking at targeted tax reduction and I'm available for any questions you might have. Thank you.
Okay. Next up we have Robert Harris followed by Tim Kearney. (Witnesses approached Witness table.)
Good afternoon. State your name for the record and proceed with your testimony.
My name is Robert Harris. I'm the Vice- president and Legislative Director of AFSCME District Council 47. (Cheered.)
That's right. All right. I got good company up here. So after the Mayor's budget address and the recent publishing of the Tax Reform Commission Report and the accompanying Advisory Committee suggestions, it is important for us to highlight just what tax revenue supports for the citizens of Philadelphia. You're often, and I'm sure you will hear many times today about Parks & Rec and seven- day-a-week libraries. And that's wonderful, keep hearing it. But I want to keep putting it out there about our members who work in the public health centers, DHS and prison social workers, also DBHIDS social workers, our Water Department that keeps our drinking water clean and flowing, Licenses and Inspections staff that deal with safety of structures in our city and help protect owners and renters. We are looking into helping to continue to support innovative pilots with City Council like the mobile mental health units that support our police and de-escalating interactions. Also with the Riverview Wellness Village who are helping people to recover from the Kensington drug crisis, we are looking into having those be good strong-paying civil service positions. All of these civil service positions protected by collective bargaining help keep Philadelphians at working family rates, pay rates. D.C. 47 is against any cuts to revenue that fund our essential city services. Anti- union extremists and their billionaire-backers are advancing devastating budget cuts straight out of Project 2025. These reckless cuts will harm working families and retirees and damage our communities and threaten our jobs so that billionaires and big businesses can enjoy small tax breaks. The report put out by the Tax Reform Commission is asking Philadelphia to do more with less, while calling for complete elimination of the BIRT tax over 8 to 12 years with no true plan to replace that important city funding. The members of D.C. 47 are very concerned for their jobs. We ask that City Council stand with the workers and invest in full funding and staffing of civil service positions, because as you all know AFSCME members make Philadelphia happen. (Applause.)
Thank you. Thank you for your testimony. Please state your name and proceed.
Good afternoon, Chairperson Bass and members of the Council. My name is Tim Kearney, and I am here as the Tenant Union Representative Network, representative on the Tax Reform Advisory Committee. Over the last nine months with other members of the committee and the Tax Reform Commission, I have looked at the tax areas in most need of reform. I appreciate the opportunity to address the City Council on this important tax public policy. I'm not going to read this word-for-word because I don't think I can do it in two minutes, but I'm going to summarize it. And essentially, the one thing I want to say today is what the Pew study and the representatives from Pew said at the first public hearing of the Tax Reform Commission last summer and, that is, the citizens in Philadelphia that are getting the short end of the stick when it comes to paying property taxes are renters. I worked at a rental organization, advocacy organization, for the last 11 years. There's a tremendous prejudice in our culture against renters. And I think that maybe that's the reason why renters are getting the short end of the stick. The major recommendation that I want to make is that homeowners who face the opposite type of prejudice that renters face vis- -vis landlords, vis- -vis homeowners and even in the court system, is that we need to amend or modify the property Homestead tax exemption and make an equivalent for renters. What a lot of people don't usually think about is that everybody who rents is an owner. They're not afforded the title of homeowner, which is the American Dream which is a warm, fuzzy way of referring to somebody. But instead they're renters or they're tenants. Even when they go to court, if they're half a month behind in their rent, they can be evicted. But if the landlord doesn't fix the property and maintain it up to the code, the landlord's not going to lose the legal title to possession and the title of the property. So there's a tremendous level-playing field and the property Homestead tax exemption is part of that. Now, what can we do to rectify that? One way is to have a local version of the state Renters Rebate Program. It would be pretty simple to set up and organize. A second way is to extend the Homestead property tax exemption to all rental properties, in which case it would go directly to landlords, lower their costs. And the third way is to take any property in which people live, whether it's an owned home, a condo or a rental apartment or house and don't call it property. Call it housing. Don't tax housing but tax all other property, including second homes, industrial, commercial.
In the Tax Reform Commission's report, they completely left out any equity for renters. The Pew study did not. The Tax Advisory Committee did not. Thank you very much for having this hearing and taking our testimony. I'll be glad to answer any questions. (Applause.)
Next we have Stan Shapiro and Lance Haver, and they will be followed by Jonathan Stein and Dr. Nikia Owens. (Witnesses approached Witness table.)
Good morning, Councilmembers. Thanks for hearing me. My name is Stan Shapiro and I'm speaking as Vice- chair of Philly Neighborhood Networks and as coordinator of the Tax Reform Advisory Committee to the Tax Reform Commission. Previously, I served as staff attorney for City Council for many years. I left in 2002. I follow this Council very closely ever since then as well. I want to start by commending Councilmembers Brooks and O'Rourke for their introduction of bills that would further cut the wage tax for low-income families, enlarge the BIRT exemption to $200,000 and re-enact the wealth tax that previously existed in the city -- (Applause.)
-- for most of the 20th century. These proposals were all endorsed by the Tax Advisory Committee to the Tax Reform Commission and shared with it. Had the Commission adopted those proposals, they would have met the mandate that the Home Rule Charter imposed on them, which quoting the Charter was to "be guided by the principle of tax fairness and tax equity in apportioning tax burdens," direct quote from the Charter. Instead the Commission recommended that the net earnings portion of the Business Income and Receipts Tax be eliminated in clear violation of that mandate. It's clear and uncomplicated on its face. A company with $10 million in earnings would receive at least times the benefit of a company or individual with $100,000 of earnings. So Business X, a small business, pays $100,000. Business Y, which is 100 times bigger, pays or gets 100 times bigger cut than that small business. The inequity is obvious. Unfortunately, the Commission's proposal has been largely adopted by the Mayor, but made even worse by her suggestion that the $100,000 BIRT exemption be repealed. We're still -- cutting business taxes is not just unfair. It's a bad solution to a problem that doesn't exist. Put simply, Philadelphia is not uncompetitive with either our suburbs or other cities in our region nor do tax cuts produce jobs for local residents. This is the essence of the testimony that Mark Stier of the Pennsylvania Policy Center would have offered supporting that reality, but he can't be here due to a conflict. I've handed up copies of his testimony for distribution. He's worked on this issue for months. His testimony and his findings were submitted to the Commission, and inexplicably they did not adopt it.
In sum, the Charter has required that the Reform Commission adopt proposals that meet a test of tax fairness. That Charter provision applies to the Commission, but it was adopted by a vote of the people. The people have said that tax cuts must be done in a fair and equitable manner. This proposal from the Mayor just does not do that. (Applause.)
Good afternoon. My name is Lance Haver. I'm a member of the Tax Commission's Advisory Board and the former Director of Consumer Affairs for the City of Philadelphia. The budget proposal before you is what we used to call bait and switch. It promises one thing but does something else. It says it will lower business taxes for small businesses. It will not. Part of my testimony is a breakdown. I'm not going to read it. But if you go from where we are now, do away with the $100,000 exemption, by Fiscal Year 2030 every small business and I mean any small business that makes less than $1 million a year will see a significant tax hike. All new businesses that were eliminated from paying any tax for two years because of the exemption will immediately start paying taxes. This will hurt our business community. Even if Council were to keep the exemption of the budget proposal calls for eliminating, this proposal would be misguided. It relies upon trickle- down economics. And I heard Mr. Dubow, and I've heard him over the years. You all can make your own decisions, but trickle-down economics means cutting taxes for big businesses and the wealthy. It has never worked. There is absolutely no evidence in any of the testimony that it will work and nobody really believes that it will work. (Applause.)
It is just something that is said to excuse the wealthy getting wealthier. The City saying we're going to lose a court battle, every member of City Council stood up and said, we're prepared to fight the Trump administration, we're prepared to fight for the people of Philadelphia. But yet somehow somebody is afraid to go to court to fight for what is right, to fight for the exemption? That should be unacceptable -- (Applause.)
-- to every single one of you who has risked, who has risked being arrested, who has stood up for us, who has fought for us. For you to cower because a court might say you're wrong is completely unacceptable. Finally in closing, the way to do this, the way to do it is to force the City, PGW, Philadelphia Water Department, the Airport and the City's authorities to buy locally. It's inexcusable that the stadiums that we pay for aren't stocked with products that are made in Philadelphia, local cold cuts, local beers, local breads. Everything in those stadiums should come from Philadelphia. We should form buying co-ops or small businesses to save them monies on utilities, insurance and banking fees. We should use PIDC to factor and help small businesses with cash flows. We should rewrite the zoning codes to reward developers for setting aside 25% of their retail space for small independent businesses. And we should redo the way we contract so that it's a net contracting. The taxes a local business pay should be reduced from the price of what they're bidding. Yes, big businesses like Comcast helped the City. But Comcast would not be a big business had the City not first helped it. Those of us who are a little gray, maybe a little thinner, in some places a little thicker than others, remember that the City gave Comcast the franchise. The City gave Comcast its first steps. And then the City looked the other way as Comcast put up all the other franchises. And then the City decided to keep competition out. All I'm suggesting is that we do the same thing to help emerging businesses that we did to help Comcast when it was little. Use the budget to help the small businesses, keep the exemptions, cut the elimination of across-the- board tax cuts. Thank you for your time.
I would like to just leave with you, I'm sure you have it but in case you don't, the breakdown from this year to 2030 with the exemption missing.
Jonathan Stein, Dr. Nikia Owens. They will be followed by Ella Israeli and Emily Weiner. (Witnesses approached Witness table.)
Thanks for being present and hearing us. I'm Jonathan Stein. I'm a former member of the Tax Reform Commission of 2003 appointed by Council President at that time. I'm also a former Executive Director and general counsel at the Community Legal Services. Joining me?
Yes. Good afternoon to all the honorable members of City Council. I'm Dr. Nakia Owens, the President and CEO of Campaign for Working Families. Glad to be with you all this afternoon.
We can say a few words about the wage tax refund law. If there's one principle that really unites everyone, it's that the tax system should not drive working poor people into deeper poverty. I mean, I think everyone can agree to that. And we already have a wage tax refund law that attempts to do that. But what the Revenue Department earlier didn't quite say to you all was that the take-up rate is like 2% to 3% of eligible people now, probably less than 2000 people, access the wage tax refund. And so, there are a number of proposals. Dr. Owens and I did an Inquirer op-ed a few weeks ago that's being handed out. And in the package that I understand Councilwoman Brooks and Councilman O'Rourke introduced today, there are some efforts to reform and update that wage tax refund law. Remember, the last time it was passed by unanimous vote, including by Councilwoman then named Cherelle Parker before becoming Mayor. And I go back to the early 2000s with David Cohn who started this. But every time this issue came before Council, large majorities supported it. And in one minute, why the current law isn't working. You have to first apply to the state tax forgiveness. If you earn less and be approved there. If you earn less -- if you earn more than $8,000, you are ineligible for the state tax forgiveness and the wage tax refund law. No one knows about this wage tax refund. It's not auto-enrolled. It's not automated. Other taxes are. We heard this morning from the Revenue Department. Why shouldn't the wage tax refund be automated as well? So in sum, the wage tax refund is probably the most equitable, fairest measure you can take up and pass this term. The impact of it affects low-income people in Philadelphia. It's not a broad wage tax cut as is also on your table, which helps suburbanites. This focuses on the people most in need and will have the most economic impact. Working poor people will spend their refund on local businesses. One last word as Dr. Owens follows me. We heard about the BIRT 100,000 exemption litigation. Just one word on that. I've done research in the last couple of weeks that I'm happy to make available to Councilmembers. I know you're going to get your closed-door briefing from the Law Department, but a number of Councilpeople this morning raised that there is no reason why the City should not be defending that law. (Applause.)
The City should not be prematurely throwing in the towel when the state Supreme Court has not ruled on this, and they would do that maybe two or three years down the road. And the most important part of my research showed that most -- there's a string of unbroken Supreme Court cases that say even if a tax exemption like this were found unconstitutional, there would not be retroactive or retrospective refund relief order. The Supreme Court as a general rule has said there's only prospective relief. So when you heard the Finance Director put out the risk, well, we're going to have to pay all this money back. If you look at the state Supreme Court case law, it doesn't say that. It says the general rule is prospective relief only, so there's very little loss there. There are good margins to make to defend the law --
Yes. Good afternoon. I just have a short piece, but I just wanted to say thank you to all City Councilmembers that have supported the work of Campaign for Working Families. It really does make a difference. And we've served about 15,000 individuals so far across our network of tax sites, and we will serve over 10,000 more before tax day. So with that, I just wanted to say thank you. Just real quickly I just wanted to say that Philadelphia, we can't afford to keep taxing poverty while calling it progress. And reducing the City's wage tax for low-income residents is more than a tax policy. It's an act of righting the financial inequality. When paired with the Earned Income Tax Credit and the Child Tax Credit, reducing the City wage tax would form a three-tiered engine of economic mobility mirroring New York's Ax The Tax vision and bringing it home to our city. With households earning less than $30,000 a year, spending 52% of their income on rent, facing a 25% increase or rise in grocery prices and a 40% spike in home costs, the gap between a paycheck and peace of mind keeps growing, and we simply can't afford it. When cities align local tax policy with federal rules like the Earned Income Tax Credit and Child Tax Credit, we shift from a system of extraction to a system of empowerment because we do not elevate the poor through charity. We do it through policy that respects their labor and multiplies the people's dollars. And that I can tell you through the service that we've seen when people come in with three and four W2s and barely make $39,000 a year, it's a, you know, every dollar counts, every dollar counts.
And so, I just encourage you to really support the reduction of the City wage tax and however you can help individuals, because we know that a living wage is 60,000 and many of the individuals that are coming through our doors, they're working two, three jobs and they don't even make half of $60,000. So thank you. (Applause.)
Next we have Ella Israeli and Emily Weiner, and they are followed by Nefertiti Weinott and Cesar Ruiz de Castilla. (Witnesses approached Witness table.)
My name is Mark Clincy. I am a District 2 resident and a member of Philly Thrive. I am here today to oppose the Mayor's proposed tax plan. By taking away the exemption for small businesses, you are making it harder for small businesses to make a living. I'm talking about the small corner stores, the Black barbershops and the family grocery stores as well as the cleaners that used to be around in all the innercity neighborhoods. There used to be a lot of small businesses, especially Black-owned businesses in my neighborhood that you don't see anymore. There are barber shops I used to go to that aren't there anymore because they went out of business. Without support from the City, that is going to keep happening. By taking away the tax exemption, you are being hypocritical and not honest and that is unacceptable. We need to tax the wealthy, it won't hurt them by much, so we can use that money to help improve our education in the innercity, to help improve housing in our innercity, make sure that homes are repaired. They get the, you know, repair. And also, if they need legal representation, it's there for them. And we need to care for our senior citizens, making sure they have a health and safe place to live. This is why we need to tax the wealthy. They don't need tax breaks and that's honest. Billionaires are making money off of us and the City is allowing it instead of protecting its people or its constituents. When is this going to stop? When are people going to listen? I am the voice for those that aren't here or who aren't around anymore. They need to be heard, so I am going to make sure that they are heard. We are no longer the silent minority anymore. We are speaking up. We will stay silent no more. Thank you for your time. (Applause.)
Hi, everyone. Thanks for being here and letting me speak. My name is Ella Israeli. I am a resident of District 3 and I'm here to oppose the Mayor's proposed tax plan. I'm a staff member at Philly Thrive, a social worker and a descendant of ancestors that survived fascist regimes. At Philly Thrive we have seen the City sell out Grays Ferry and surrounding neighborhoods to the interests of wealthy billionaires. Last session Council extended tax breaks to Hilco Redevelopment Partners, all while Hilco refused to negotiate a legally-binding community benefits agreement with the neighborhood. Philly Thrive was here week after week watching Council bend to the developers of the 76ers arena at the expense of Philadelphians. The current tax plan is merely another example of our government selling out our communities to benefit the most wealthy and this pattern is shameful. Every morning I listen to the news as the wealthiest man in the world slashes our federal resources and departments. For example, Philly Thrive received a federal grant to build a community resilience hub that would serve the community before, during and after a climate disaster. But we haven't been able to access any of the funds. I know in my bones that the way we stay safe in the face of encroaching oligarchy and fascism is by investing in communities, by funding public services, by knowing our neighbors and taking care of one another, not by giving tax breaks to the wealthy at the expense of our public schools, housing, care resources and more. We know that resourced communities are safer. Studies have shown that rates of gun violence decrease even when one home is repaired on a block. Neighborhoods are safer when young people have community mentors and places to go after school. That's why at Philly Thrive we have a home repairs program, a high school internship and an alternatives to gun violence program. But we are just one small organization in one part of the city whose federal funding is being cut. We need the City to step up and do what is right to protect Philadelphians who call this beautiful city home. Will the City of Philadelphia look back on this moment as a time when we invested in and protected our communities or will you, City Council, look back in shame at a lost opportunity where you cut taxes to the wealthy at the expense of the public good? I hope I can say that my city did the right thing. Thank you. (Applause.)
Next we have Emily Weiner followed by Nefertiri Weinott. And then we'll have Cesar Ruiz de Castilla and Greg Waldman. (Witnesses approached Witness table.)
Good afternoon, Councilmembers. My name is Emily Weiner. I'm a South Philly resident, parent, and I'm here today carrying the voices of other caregivers and local networks I'm a part of and also standing firmly in alignment with the platform of the people's budget. Let's cut to the chase. We're on revenue today. Tax the rich. It is inequitable to lower the BIRT tax and cut the exemption for small businesses and it's a distraction to tinker with wage taxes at tiny rates, when we could be enacting a bold progressive tax like the one that I know has been championed by Councilmembers Brooks and O'Rourke, thank you very much, and that asks the wealthiest among us to contribute our fair share. As someone personally with wealth and class privilege and race privilege, I want to be part of that reimagined social contract. I make $114,000 a year. I have $200,000 in net wealth when accounting for equity in my home as well, and I would happily be taxed more in exchange for the trust and peace of mind to know that we are collectively caring for one another. All right. So while I'm at it, I know we're on revenue today. We're going to expenses. What would that look like? First, I need you all Councilmembers to increase the proposed investments in agencies that uphold real foundations of public safety and well-being. First, Parks & Rec, which had there been one additional steady presence of an adult at Dickinson Square Park yesterday where I took my doddler -- my toddler, they could have de-escalated yesterday's violent conflict between teenagers. Second, the Department of Public Health whose credibility and capacity must be protected, especially as we watch national health leadership fall to an anti-vax conspiracy theorist. Third, the Office of Behavioral Health and Intellectual Disability Services, which administers the early intervention system who support children like my daughter, who has and may continue to have developmental challenges. The Free Library of Philadelphia, the Office of Homeless Services, by the way a shame that the current proposal is actually proposing to decrease funding when we know that unhoused persons are growing in number, that's not just bad policy, it's morally indefensible. And second, look, while I appreciate you're not proposing to increase police funding, that same logic has got to be extended to prisons. Please remove Mayor Parker's proposed $9 million increase. We got to invest in people, not punishment. I said earlier I want to do this in exchange for trust and peace of mind. Let's talk about trust. As authoritarianism and oligarchy take an ax to our national institutions, to our programs, we know trust in the federal government is eroding. But you here now have a powerful opportunity to do something different, to show that local government can still be a place of courageous action, collective care and trust. I want to be part of that with you. I know we can pass a budget that truly proves we are a City of Brotherly Love and Sisterly Affection. Let's do it together and let's pass a budget worthy of our trust. (Applause.)
Good afternoon, Council President Johnson and members of City council. My name is Greg Waldman. I worked for the City of Philadelphia for 11 years, and I've been a proud member of AFSCME D.C. 47 Local 2187 for over nine of those years. I speak to you today as a union member and not as a representative of the City. In all my years with the City, I have never not experienced scarcity. City departments face chronic understaffing due to constrained operating budgets and the City offering noncompetitive salaries and working environments compared to industry standards. This includes breaching our contract to eliminate hybrid schedules, but that's a whole other topic that I won't get into that now. Because of the six years unionized City workers went without a contract during the Nutter years and high inflation during COVID, our wages have relatively declined since the great recession. This not only makes it challenging to fill positions but keeps the lowest-wage City workers in a cycle of poverty. I hope this body is making prudent fiscal decisions so that money stays there for hardworking civil servants. If there's another contract impasse, then I can assure you that staffing vacancies will grow even more. Beyond personnel, scarce budgets make it challenging to effectively serve patrons and taxpayers and tackle structural racism. I organize in my union alongside librarians and rec leaders that work in moldy buildings with broken HVAC systems in some of Philadelphia's most distressed neighborhoods. As a transportation planner, I'm grateful for this budget to increase investments in Vision Zero, but transportation projects making our roads safer and more accessible are often reliant on federal funding that can't be counted on under fear of Musk. But instead of shoring up funding to fill gaps caused by federal cuts and tackle our problems head-on, this bill locks in billions of dollars in tax rates over the next years to the same 5 mega corporations and mega 6 billionaires benefiting from 7 Trump's tax cuts. 8 Many of them aren't even 9 Philadelphia businesses. In fact, 10 it's a Massachusetts-based firm 11 that sued to eliminate the $100,000 12 exemption. We know that trickle- 13 down Reaganomics doesn't work, and 14 down the road this body will have 15 to be forced to decide between 16 cutting critical services or 17 raising property taxes, which will hurt not only residents but also small businesses where rent is their primary expense. I implore my elected representatives to think creatively. Instead of signing off entire schemes recommended by hedgefund bros and Mayor Parker's billionaire donors on the Tax Reform Commission. Pass the People's Tax Plan, including the wealth tax. Seattle just passed the millionaires tax to fund social housing. Are you saying Seattle is better than us? Instead of giving up on BIRT exemption so easily, Council should double it to $200,000. Mayor Parker campaigned on her cred of being a former State Rep who has connections in the Pennsylvania General Assembly. She should use that leverage to get the General Assembly to overturn the uniformity clause that has become closer to a possibility with yesterday's special election wins. Now is the time to be bold. This proposal is not bold. Bernie and AOC are barnstorming this country, holding rallies to fight for the oligarchy while this Council has just decided to lean into it. So this is for Labor Committee Chair Harrity. Are you going to be played like a pawn again or did you learn your lesson from the Sixers fiasco? Are you on the side of workers or are you here to do the billionaires bidding?
Excuse me, sir. You ain't got to do the whole back and forth --
-- being disrespectful to the member. Just say what you got to say in terms of the facts. That's all. Go ahead, sir. (Applause.)
So my name is Cesar Ruiz de Castilla. I am a student and a resident and I am here because I am appalled by the things that I heard during the Mayor's budget address During the section on tax reform. I heard a lot of overtures and platitudes towards the business community and that really caught me offguard because when I think of Philadelphia, I don't think of the corporations that just happened to be here. I don't think of the businesses. I think first and foremost of its people. I think of the parents that take their children to our local libraries. I think of the artists and performers and musicians that give the city so much culture. I think of the barbershops and the hair salons where you have that one person that knows exactly what you want and how you want it. I think of like the food trucks, which by the way the best one is on 46th and Market. In my correct opinion they have the best one in the city. I think of that, right. I think of the people, not of the corporations, that just happen to be here. And I just want us to remember that corporations will sell the soul of the city if it makes them a profit. I remember not even like a few months ago when corporations pitted the citizens of Philadelphia against its elected officials to try to get a better deal on an arena. We need at this moment the people of Philadelphia, working- class champions in City Council, especially with Trump in the White House. He does not like our city. He hates us. He hates everything we stand for. He hates our people. He said that bad things happen in Philadelphia, and he has threatened to withhold and has already started withholding hundreds of millions of dollars in federal funding for institutions in the city. So that's why I'm really confused why at this critical moment we are advocating for a plan that over the course of the next several years eliminates the third largest source of tax revenue for the city. That to me just doesn't make much sense. I would much prefer a tax plan that put more money into the pockets of normal everyday Philadelphians, everyday citizens, that offer relief to small businesses and that chose to tax the wealthiest of the city because that will be into direct contradiction of the spirit of this tax reform, which is essentially just trickle-down economics, right. That's never worked once. Never in the history of this country in the city has it ever worked, which is why we propose something -- I would support something a lot more different and radically different than that approach. It reminds me -- and I only say this because my parents are very, very Christian. They're Peruvian immigrants and I carry them with me whenever I'm in a public forum, a little nervous. It's a Bible verse that stuck a lot to me when I was a kid. It's Matthew 25-40, and I'm quoting "And the King shall answer and say unto them, verily I say unto you, in as much as you have done it, to least of these, my brethren, you have done it unto me." I urge all of you to vote no 22 on austerity, to reject trickle- down economics, to fight back into the corporate interests that got Trump elected and to fund the people. Thank you so much. (Applause.)
Next we have Mijuel Johnson. And then we'll be followed by Ben She and Deborah Wei. (Witnesses approached Witness table.)
Hi guys. My name is Mijuel K. Johnson. I'm a Board member of Reclaim Philadelphia, and I'm actually here speaking on behalf of our Executive Director Seth Anderson-Oberman, who could not make it here today but I'll be reading his remarks. Good afternoon, Councilmembers. My name is Seth -- speaking on behalf of Seth. I'm the Executive Director of Reclaim Philadelphia. I'm here on behalf of many Philadelphians who are fighting every day just to stay in this city, to keep a roof overhead, to keep their kids safe in schools, to hold onto threads of community that have held them together through generations. Mayor Parker's proposal to repeal the Business Income and Receipts Tax while hiking taxes on small businesses making under 200,000 a year isn't just backwards, it's reckless. It's a handout to corporate giants, real estate developers and high gross income firms who are already reshaping the city to serve their bottom line, not the people who live here. This plan would strip up to $2 billion from our city's budget over the next decade, dollars that we cannot afford to lose. Let's be clear about what that money is for. Our public schools are in crisis, riddled with asbestos, lead and neglect. It will take at least $7 billion to $10 billion just to make them safe, let alone excellent. Meanwhile over 70,000 units of deeply affordable housing are needed to stop the wave of displacement, washing over Black and Brown and working-class neighborhoods. Our libraries always are cutting hours. Our mental health services is thread- bare. Our public transit is hanging by a thread. These are not abstract budget lines. They are lifelines. Cutting BIRT now is pouring gasoline on a fire. It will accelerate the pace of gentrification, supercharge displacement and rip more families from their communities they've built. This is how neighborhoods are erased. And let's talk about context. Trump and the far right are sharpening their knives ready to gut Medicaid, housing assistance, food programs, everything our communities depend on to survive cities like Philadelphia, majority Black, Brown, historically underfunded and already strained and will bear the brunt of those attacks. So why in the face of that storm would we choose to weaken our own defense. Let me ask you plainly: Why are Democrats still chasing the ghost of trickle-down economics? The evidence is in after 45 years of tax breaks for the rich. We know it doesn't work. It's never worked. It concentrates wealth, hollows out the middle class and leaves everyone else scrambling for scraps and has helped paved the way for Trumpism and rising fascism, by fueling inequality, breeding resentment and abandoning working people. The budget proposal was part of that same pattern. It favors the wealthy and punishes the vulnerable. Small businesses is the cornerstones -- corner stores, barbershops, day cares, food carts --
I've been more than generous with your time, sir.
I've been more than generous with your time. It beeped like three times. I just was letting you go.
All righty. Small businesses are the cornerstones -- bar -- corner stores, barbershops, day cares, food carts that form the heart of our neighborhoods don't need higher taxes. They need breathing. They need protection and our people need a government that chooses them over corporate profits. We are asking, no 17 demanding, that you reject this upside-down budget. Call it what it is --
-- a giveaway to those who already have more than enough. Thank you very much.
And just for the record, I'm very, very proud of this young man. He's from South Philadelphia, interned with me as a young man. We both went to the same elementary school, which is Childs Elementary School I graduated from, and I came there when Childs was open during a school assembly and he was giving a speech. And so, that's a rising star right there. Mijuel, keep up the good work. (Applause.)
We have Ben She and Deborah Wei, followed by Sergio Cea and Myra Clemens. (Witnesses approached Witness table.)
Hello again. My name is Debbie Wei. And if you don't remember me, you should remember my shirt. The Chinatown community fought billionaire developers, including the CEO of Campus Apartments who I believe is named as a beneficiary of proposed tax cuts against an oligarch-driven vanity project that no one asked for and the vast majority of Philadelphians did not want. And only a few months ago we watched this body be bamboozled by those billionaires who don't live here, don't send their kids to our schools and who treat us as steppingstones to more accumulation. So I hope you learned billionaires don't care about us and they really don't care about you. So if I got paid $10 an hour hours a day seven days a week to sit here, not only would that piss you all off, it would take me 11,400 years to accumulate $1 billion. No one earns that kind of money from their own labor. It is extracted from our communities. People with this much money do not need nor deserve tax breaks. They need to pay their fair share. Our local government is the only protection we have right now. And let me put this in terms that I think we can all understand. We, all of us, the citizens of the poorest large city in America, we're the Eagles. Your constituents are the quarterback. We live and work here, pay our taxes, send our kids to the public schools. We elect you and we can make or break this team. The Chiefs are the federal government now led by two billionaire oligarchs. We're watching them sack the Department of Education, intercept food for poor people, block our arts, decimate our civil liberties. This body, you are the offensive line. That's right. You are Saquon, A.J., Jordan. You are all of them. Your job is to protect us, to hold the line, to receive the pleas that we pass to you, to find the openings past the federal government and to carry them forward so that our city can survive. I know political campaigns need money, but I also know billionaires don't need tax breaks. Small businesses, many who have not yet fully recovered from COVID and are staggering under the weight of inflation, they don't need to have an added burden just so billionaires can get richer. I'm going to sing the last part of my testimony just because Councilman O'Rourke is here. "There is hurting in my family and there is sorrow in this town/there is panic across the nation and there is wailing the whole world around/you must be open. You must be willing, for to be hopeless which seems so strange/it dishonors those who go before us so find your hearts and be the light of change." Thank you. (Applause.)
Tough act to follow. Good afternoon, Councilmembers. My name is Sergio Cea. I use el/he/him pronouns, and I'm the Political Director of Reclaim Philadelphia as well as a facilitator for the Alliance for a Just Philadelphia, a coalition of over 30 community organizations in the city, including Reclaim. The Alliance is demanding City Council put forward an equitable tax plan. The budget and tax plan as presented by Mayor Parker is a reverse Robin Hood, prioritizing the needs of the haves against those of the have-nots in a time of spiraling wealth inequality. Mayor Parker's pushing massive tax cuts for big businesses through BIRT. What we do know is that these cuts combined with the wage tax cuts accounted for more than half of the City tax revenues last year, and the money to interest behind the Tax Reform Commission want the City to shift dependency on taxing businesses to taxing real estate and property. So homeowners in Philadelphia will see their taxes rise while big corporations will see their taxes go down. Sorry, lost my sight, make it make sense. I think I hear the Mayor and City Council say they support small businesses, but I will watch what you do, not what you say. Parker is rolling over and not defending the exemption in courts and even former Councilmember Maria Quinones- Sanchez says the City could win, but we need a Mayor and Council who will actually fight. And with what is happening nationally in the background, billionaires in the White House cutting funding left and right, we are already seeing the results of this chaos. We cannot say we are against what Trump and Republicans are doing when we have oligarchy being supported by Democrats right here in Philadelphia. We need an equitable tax plan now that taxes the ultra wealthy instead of giving them huge tax cuts on the backs of homeowners and small businesses. This is not a time to be caving on taxes for the wealthy. The rainy day is here. We are in a perilous situation and we need City Council to invest in a budget suited for the political moment we are in. We need a budget that invests in the essential services and programs that make our communities more safe, healthy and whole. We saw what happens when Council caves to the whims of the ultra wealthy in Philadelphia. Do you want to be their pawns again? To read more about the Alliance's demands, you can go to adjustphilly.org. Thank you. (Applause.)
Next we have Myra Clemens and Madeline Morgan. And they are followed by Joan Pompei and Kimberly Cooke. (Witnesses approached Witness table.)
Hello. Good afternoon, City Councilmembers. My name is Joan Pompei. I have been a domestic worker in Philadelphia for over three decades. I am a member leader of the National Domestic Workers Alliance, PA Chapter. I am concerned about the current tax plan in the City budget because it will cut taxes to big corporations and millionaires, and we need this money to fund our city. We need to tax the richest in our city to pay for critical needs, like allocating $3 million to $1 million for the Office of Workers Protection. I am also concerned about tax cuts for corporations and millionaires, because as workers we need a fully-funded Office of Worker Protections. If there isn't enough money coming into the City, that office would continue to be underfunded and workers will keep suffering from insufficient responses from the City when our rights are violated. We are currently fighting for the Power Act to expand and retaliation protections and improve labor enforcement. 14 out of of you are co-sponsors of 17 that legislation. Without enough revenue coming into the City, the Office of Worker Protections will continue to struggle to protect our rights. The wealthier should pay so that workers can survive. Thank you. (Applause.)
Hi, everyone. My name is Kimmy Cooke, and I am speaking in opposition to the tax bills in the proposed budget. Right now our communities are asking if they can rely on Philadelphia city leadership to have their backs as the Trump Administration strips more protections from us every day. Mayor Parker's tax plan looks grimly similar to what we're seeing in the White House. It takes away protections for small businesses while slashing taxes for the mega corporations. It is extremely negligent and risky to codify 15-plus years of tax giveaways to big business at a time of unparalleled instability in recent history. Just as we saw at the Sixers arena, we cannot put our faith into these billionaires who will always prioritize their bottom line. It is shocking that this Administration isn't even bothering to fight for our small businesses. Before the BIRT exemption has even gone through the court system, the City is ready to give up. We wouldn't need to spend $30 million to transition small businesses to paying the BIRT if we fought for the exemption that has a strong chance holding up in court. The mega corporations who will benefit the most from the BIRT cuts have no obligation to actually create jobs or create jobs that are here for the people living in Philly, not New York. We are tired of trickle-down economics for decades when we know that it doesn't work. This budget proposal takes money that would go to serving working-class Philadelphians and redistributes it to the biggest corporations. The plan will ultimately gut our critical public services like libraries, schools, parks and sanitation. I worked as a City worker with Parks & Recreation for five years and saw firsthand the result of decades of divestment, understaffed, underresourced and unsafe building conditions. The Rec center that I worked at had its doors closed since 2020, an absolute disgrace. We just saw what happens when we are fighting for scraps. The Community College of Philadelphia staff and faculty were on the brink of going on strike, fighting for good jobs and quality higher education to be accessible for all. It shouldn't take 15 months to be told their basic needs can be met. Their budget along with all of our essential public services should be fully funded, and it should be paid for by the ultra rich that aren't paying their fair share. We need a tax plan that taps into the extreme wealth created in our city and we need it now. Every day Philadelphians deserve to know is this City going to once again be for the billionaires or will it stand with the working people who elected them? We are waiting and we'll be watching. (Applause.)
Is there any one else here for public comment whose name has not been called? (Witness approached Witness table.)
Hello, everyone. My name is Lucas Martz, and I am here to talk in opposition to the tax reform proposed. And I'm here really to call it what it is. It is trickle-down economics, as we have all been hearing today. And if I understand the proposition correctly, what it looks like to me is that the people proposing this plan believe that this money, these hundreds of millions of dollars in tax revenue, is better off in the pockets of these corporations than it is in the City budget. I personally don't really understand how you all here think that in order to make the best results for the City of Philadelphia that you ought to be giving up tax revenue and handing it off to businesses in what feels to me like the hopes that those businesses will then better the city themselves. Obviously, when it's in the tax revenue you all get to decide what happens to it. But when it's in the budgets of these mega corporations, we don't really have any say over what happens to it and you're just kind of crossing your fingers hoping that they are willing to invest it back in their employees. On top of all of that, this proposed tax plan is on the net income. Meaning, that salaries and wages are already paid. This would just incentivize these businesses to hold on to those profits, keep it in their pockets and not increase wage or salary as trickle-down economics supposedly suggests might happen. On top of all of that, I feel as though these tax reforms in their nature is essentially supposing that the budget itself can afford to lose that much money. And as we've been hearing from everyone today, it certainly cannot. If you have noticed, the people speaking in opposition they have been talking about people, working-class people and the businesses they like, the small mom-and-pop businesses that they go to often. If you've listened to the people who talk in favor of it, they talk about numbers, revenue, GDP, capital investment. These people do not necessarily care about Philadelphians. They care about making these numbers increase. What I would often argue is that continuing down the path of endorsing trickle-down economics policies could replace the entirety of the City of Philadelphia with one big shopping mall. You could get every major corporation to set up shop here and they would be doing big business. The numbers would all look better. You'd have better revenue, better GDP, more capital investment. But if it displaces the entirety of the City of Philadelphia, all of the businesses and people that we love, and replaces it with one big shopping mall that technically is better economically, is that really what we want? Is that really what is better for the City of Philadelphia? So I stand here today in opposition of this bill, asking us to stop going down this trickle- down economics pathway. Hold on to the money in our own tax revenue so that we can decide what happens with it rather than just crossing our fingers and hoping that some corporate megalopolis decides to pass it on to us. Thank you all very much. (Applause.)
Thank you very much. This concludes our public comment session. The Chair recognizes Majority Leader Katherine Gilmore Richardson for a motion --
We had a short day. For a motion of the public hearing and meeting on the bills and resolutions before the Committee today stand in recess until Tuesday, April 1, 2025 at 10:00 a.m.
Thank you, Mr. President. I move that the public hearing and meeting on the bills and resolutions before the Committee today stand in recess until Tuesday, April 1, 2025 at 10:00 a.m. in Room 400 City Hall. (Duly seconded.)
It has been moved and properly seconded that the public hearing and meeting on the bills and resolution before the Committee today stand in recess until Tuesday, April 1, 2025 at 10:00 a.m. in Room 400 City Hall. All those in favor will signify by saying aye. (Aye.)
The ayes have it and the motion carries. This Committee stands in recess. (Committee of the Whole concluded at 4:42 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. __________________________________ TANEHA CARROLL