Committee of the Whole, March 26, 2025

Yes. 11

12 Thank you. 13 Thank you, Madam Chair. 14

15 Thank you, Councilmember. 16 Councilmember, Harrity. 17

18 Thank you. If you answered some of 19 this, I apologize if I -- 20

So now I'm just going to say, yeah, I answered it.

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 think I'm overly tired so, you know, there's no screen.

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 --

Yes, definitely.

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?

That's the actuary's projection, yes.

Okay. So we can't retire till 2033. Thank you, Rob.

Sure.

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.

Understood. There will be, yes.

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.

Thank you, Madam Chair.

You're welcome.

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. Thank you, Madam Chair.

Chair recognizes Councilmember Brooks.

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 so much.

You're welcome.

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.

That'd be super helpful.

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.

Approximate.

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.

And then can the --

If you have another question --

-- 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.

Thank you.

Sure.

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 --

Can we come back --

Will there be a third round?

Say it again.

Will there a third round?

For you, just for you.

I appreciate that.

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.

Correct.

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?

Yes.

You can do that quickly. Thank you.

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.

(Gestured thumbs up).

You're good?

Yes.

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.

Sure. Hi. Good afternoon.

Good afternoon.

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.

We need you to summarize please.

Sure.

Thank you.

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 --

Please summarize.

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.)

Thank you. Thank you for your testimony.

Next we have Bernadetta Rivera and Jigar Mehta following. (Witnesses approached Witness table.)

And if you could please state your name for the record again.

Bernadetta Rivera.

Please proceed.

(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.)

Thank you. I'm sorry, sir --

Jigar Mehta?

Yes.

And then following, we'll have John Gattuso and Johnny Barry following.

Johnny can't make it. His pet had to go to the ER.

John Gattuso to follow. And then after that would be Brad Wilhelm.

Please state your name for the record and proceed.

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 --

I need you to summarize. I'm sorry. Thank you.

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.

Thank you for your testimony.

Thank you. (Applause.)

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.

We need you to summarize.

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.

Thank you for your testimony.

Is Brad Wilhelm here? (No response.)

Okay. Next up we have Robert Harris followed by Tim Kearney. (Witnesses approached Witness table.)

Good afternoon.

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.

Please summarize.

I will. One more sentence.

Thank you.

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.)

Thank you for your testimony.

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.

Please summarize.

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.)

Thank you for your testimony. Hi, Lance.

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.

Thank you. Thank you for your testimony. (Applause.)

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.

Thank you.

Jonathan Stein, Dr. Nikia Owens. They will be followed by Ella Israeli and Emily Weiner. (Witnesses approached Witness table.)

Good afternoon everyone here.

Good afternoon.

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 --

Please summarize.

-- and we hope the City will do that.

Thank you.

Dr. Owens.

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.

Yeah.

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.)

Thank you for your testimony.

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.)

You can state your name for the record.

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 --

I'm done.

-- 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, Mijuel.

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 --

Mr. Johnson.

Yes?