Let me give you -- well, without -- let me give you a couple things. One is on that, we -- and, in fact, we'll be ready to see this very shortly, but after we met, part of the time that we took is we actually put out an RFP on the street for a financing product.
Mr. Altman, 80 3/25/09 - WHOLE - RES. 090226 that was this year. I met with you last summer, and I told you at the time you referenced that, the developer simply wanted to get an estimate of what the parcel would cost. They wanted to buy the land. They didn't want the City to give them anything. DEPUTY
That's why what we did is, we went through, as I told you then, we went through our resources and we put out an RFP -- (Bell rung.)
Mr. Altman, they did not ask us for any money. That is my point. He did not ask for any money. He simply wanted to know how much would he have to pay for the Redevelopment Authority to acquire the parcel for him. He didn't ask for any money. So maybe you didn't understand. 81 3/25/09 - WHOLE - RES. 090226 Explain that to me.
Well, I think to put the deal together, I think they ultimately needed financing in order to do that.
Mr. Altman, you had no conversations with the developer. How do you know that? DEPUTY
I mean, that's what I had heard when our staff followed up. First of all, I'm happy to follow up. We put together a product, as we talked about then, to try to get money out on the street to help with exactly many of these neighborhood projects, which are actually -- there will be -- there's about an $8 million fund we put together and put an RFP out and had a pretty good response from a number of neighborhood projects around the City that we'll be able to fund, which we believe we're actually going to be able to do another round of funding of because there was a good response. So we'll be 82 3/25/09 - WHOLE - RES. 090226 able to increase that amount of funding. But I can --
Either you're not hearing me or you have tunnel vision. You are trying to fit a square peg into a round hole. This person was not asking for financing. He was simply asking for the Redevelopment Authority to give him an assessment on what it would cost to acquire the land, period. Why do you keep talking about financing? I don't understand that. If you got to the point where they needed financing, then fine. But this is what I'm talking about. I talk to you guys and it doesn't connect. I mean, I've been doing this for a minute. I mean, I think that I have a sense of development and what needs to happen in these neighborhoods. I'm telling you, I'm not at a comfort level in terms of your responses. I mean, you guys -- you have it in your mind what you want to do. You're not 83 3/25/09 - WHOLE - RES. 090226 willing to entertain any alternative strategies, and that's problematic to me. So I'm telling you -- and I've been real good about this. The Mayor actually asked me to give him this, referenced it in a conversation. I said, No, Mayor, that's not my style. I try to work it out with people within the government. And I probably should have given him this and it probably would have been resolved. But I'm telling you, this is extremely frustrating. And this is just one example. There's a lot of this going on. So while your speech was great, I'm not seeing it. I'm not really asking you for a response. DEPUTY
I understand. I do think, Councilman, we have worked on a number of occasions. We 84 3/25/09 - WHOLE - RES. 090226 can talk further offline about that project in particular. I'd be happy to follow up.
You want me to bring up another example if you're going to go there. DEPUTY
16th and Cecil B. Moore, the same thing. You have a development with a non-profit going down the pike. You change the rules in the middle of the game. The property was supposed to be for nominal consideration to a non-profit. Halfway through somebody decided, Well, you know what, that's market value. That throws off the budget. That was NTI money. Do the research. It wasn't NTI money. I mean, it's just -- are we here to move product or are we here to get into process? I just don't understand what's going on. I'm done. Actually, I'll come 85 3/25/09 - WHOLE - RES. 090226 back, because I had questions about the budget.
Very well. Thank you. The Chair recognizes Councilwoman Krajewski.
Thank you, Madam President. I have some questions regarding the property tax, of course. The two-year tax increase proposed by the Administration will be on the 2009 taxes?
Correct. It's an increase over 2009. So it's for 2010 and 2011.
So people will pay an additional percent 19 the first year and 14 and a half percent above the 2009 taxes --
When 86 3/25/09 - WHOLE - RES. 090226 will the full valuation process be...
The BRT has said that they will be getting us numbers within weeks. We want to make sure that those numbers are accurate. We think that process will take a little while. So that in order for us to have comfort with the numbers and to be able to put in the kind of legislation that Councilman Clarke was talking about to ease the transition for people, we don't think we can get that done during this process and get it done well. So we think that probably will be in place for 2011.
Has the City projected an increase in the real estate tax revenue past FY 2011 taking into account the transition into the real estate taxes to full valuation?
We have not -- I think I understand the question. We have not assumed any increase in revenue from going to full valuation.
Do we have in projections as to how many households real estate taxes are projected to increase due to the full valuation?
We haven't seen those numbers yet. I mean, there were projections years ago that there would be maybe 50,000 properties that would see fairly large increases, but that's an old projection, so we don't know where that will wind up.
Well, when do you think we'll have the answers to any of this?
Well, as soon as we get the numbers from BRT and have a chance to look through them. So we're hoping fairly soon. They're supposed to be getting numbers within the next couple of weeks, and then we have to go through them. But they're an independent agency. 88 3/25/09 - WHOLE - RES. 090226 We don't determine when they'll get the numbers to us.
We don't have too many answers here, Madam President. So would you see that the Chair receives it?
Thank you. The Chair recognizes Councilwoman Tasco.
I have a lot of questions, but I want to follow up on what Councilwoman Krajewski was just asking. If we have the tax increases for '10 and '11 and then full valuation comes in in 2012?
Or '11. And you said you would not receive any increase? 89 3/25/09 - WHOLE - RES. 090226
From just going to full value, right. We don't assume that will generate extra revenue.
In the full value equation, wouldn't some neighborhoods see an increase in their property taxes?
Yes. As a result of the full value project, some properties will see increases and some will see decreases.
But there are some neighborhoods coming off of 2010, 2011 on full value, those neighborhoods that will see an increase will continue with the increase, they won't have any relief?
Correct. Although one of the things that we want to be able to do in conjunction with moving to full value is have legislation that will smooth the transition from the old valuation to the new valuation for property owners who would see substantial 90 3/25/09 - WHOLE - RES. 090226 increases in their assessments.
So in my neighborhood if they have an increase in 2010, 2011, then full value comes and their properties are -- taxes are increased, are you saying that the millage would be dropped to what? To offset the full value or offset the --
Correct. There are two different things I was talking about. One is when you go to full value, everyone's assessed value is higher, because instead of -- now the values are really only a fraction of the actual value. They don't -- if your house is worth 100,000, your valuation may be 70,000 on average. After you go to full value, everyone is going up to 100,000. So everyone's value will be higher, but relative to other properties, it may be higher or lower. So you have to reduce 91 3/25/09 - WHOLE - RES. 090226 millage to make up for that increase. Then within that there will be people even after you reduce the millage who would see substantial increases in the taxes they'd have to pay. We would propose to have some kind of legislation that would have that increase kind of phased in over several years so people didn't have to take a big hit all at once.
Well, have you talked to -- is there any discussion with the state Legislature regarding any circuit breaker programs that would provide homestead exemptions for those people who --
Yes. We have had those discusses with people -- staffers both from the Senate and the House about that kind of legislation.
I think they're very receptive. 92 3/25/09 - WHOLE - RES. 090226
We talk about feeling in Harrisburg. I'm sure that the feeling is not so hot right now. That's the feedback we get. But we hope that you change their mind. Let me just ask a question here before my time is up. I'm having trouble with Appendix 4, , and the answer you gave -- as I look at this, all of these are the positions that you're funding that are part of the funding in this budget, right? And I'm only using the DA's Office because we see the cuts, and as we go through this, we'll probably see more, but her 449 is predicated on her using other dollars, so you're not really funding that in this budget?
Councilwoman, what we've assumed is that they either find other sources or they come back and say to us they have to adjust their position count down. At the moment, we assume that the position count would be the same based on the dollars that we are 93 3/25/09 - WHOLE - RES. 090226 proposing they be given for FY10 and beyond. They may decide to take that in looking at other revenue sources or they may decide that they actually have to adjust their count down, and we'd have to do that here in the budget.
But when you do the 449, it looks like she's getting some additional staff, from 437 to 449 from '08. Filled positions, 437, and then '09 current budget, 449, and '10, 449. Okay? So that you have calculated within these numbers that we have that she would have 449 with the thought that she might get the money from someplace else. You haven't put a number in the budget for her?
Well, what we've put in the budget is the 449 based on where they are in today's budget today or as of the date that we put this -- that was their count, and what we're assuming is that they will either find other sources of revenue, grants, 94 3/25/09 - WHOLE - RES. 090226 what-have-you, to sustain that level of funding or come back and say, We can't do it, or We're going to make adjustments in other classes, like their Class 200 or other places. But we anticipate they'll get back to us with what their adjustments should be. (Bell rung.)
So you've done this budget without having a conversation with the DA's Office?
We've had a number of conversations with the DA's Office, including correspondence I think I got at the beginning of this week.
Regarding the forfeiture dollars, that would not be -- they wouldn't be able to do that because of federal restrictions based on the forfeiture dollars. 95 3/25/09 - WHOLE - RES. 090226
Well, we're asking. We think there might be some room, some opportunity there. But if it's not there, there might be other grant opportunities that they're aware of that we don't know about that can generate some additional resources.
Thank you. Does that hold true also for the Sheriff's Office? I see that their figures for employees are the same, but they're being cut by over a million dollars.
The reduction in the Sheriff's Office was part of the rebalancing plan. We then -- and I have to get back -- I'll look through this in a moment -- what the number was for FY10 in terms of their numbers. At the moment we are in conversations with them in 96 3/25/09 - WHOLE - RES. 090226 trying to look at their existing funding level and be assured that they do not exceed the funding level they were given for FY09, which at the moment seems to be an issue for us to discuss.
Council President, can I try to take a shot at this with respect to the DA and the Sheriff? Because these are agencies just like City Council that are outside the Mayor's control, we have begun a series of conversations with them. We have given them a target as to what we would expect their budget to be. The details of those reductions have not yet been finalized, and so what is reflected in the document is that we have not assumed that necessarily they would take those reductions in terms of personnel. It's possible that they could take them if they had sufficient resources in other classes, Class 200, Class 300, if they had those kind of classes and/or it's possible there might be other revenue 97 3/25/09 - WHOLE - RES. 090226 sources that we are not familiar with. So we've given them a target, but we haven't completed the negotiations with those independent offices to determine the exact nature of where those cuts are. It is very possible that they may come back to us and say, You know, in order to meet that target, we are going to have to reduce personnel, and then we would subsequently make changes in these numbers. I just wanted to make sure that was clear to the Council.
And, Madam Chair, your number was correct, the million three.
Thank you. The Chair recognizes Councilman Goode.
Thank you, Madam President. I actually have additional questions for Deputy Mayor for 98 3/25/09 - WHOLE - RES. 090226 Economic Development, Mr. Altman. (Witness approached witness table.)
Good morning again. The last go-around I only got out one question, so I'm actually going to state two questions very quickly, and the first question I asked was actually a set-up question. So the answer to the next two questions are actually real important to me. One, what is the status of the local Small Business Loan Guarantee program and what is the status of the City's review of the Job Creation Tax Credit program? DEPUTY
Let me start with your -- and then I can also ask Rob Dubow, because we're both working on the Job Creation Tax Credit program analysis, and as you know, we testified at your hearing on that, on the efficiency of the current program, and I'm looking at a restructured program. So, Rob, I know you're -- 99 3/25/09 - WHOLE - RES. 090226 Essentially what Finance is doing with us, they've done a review of different -- some of the material that you gave us. You gave us some both research material and looking at some other jurisdictions, and so we right now are preparing to come to bring to the Mayor and then come back to you with some ideas about how to structure that program. Essentially we have the same goal in mind, which is what you did is to extend the term of it from one year to two years and then also the amount, and we are looking right now in terms of what some of the impact on the budget could be, but, more importantly, I think we're looking at we want to -- is it enough term, is it enough amount and will it work, and we'd like to come back and talk to you about that. So we're actually very interested in that and doing a lot of work on that.
That hearing 100 3/25/09 - WHOLE - RES. 090226 was on January 22nd. How much additional time do you think you will require?
I think it may take another four to five weeks to be done, make sure we do the analysis correctly.
The second question is the Loan Guarantee Program. DEPUTY
Yeah. We're doing a couple things, as I said before. One of the programs -- let me just quickly address one I was just speaking to, which was the -- some of it we did as a gap financing product, which I understand is different than the Loan Guarantee, but I just wanted you to be aware that we put some amount of actual small business projects, of small development projects, and one of the products was a gap financing for those projects, and we --
It's for anyone who is eligible for that, both 101 3/25/09 - WHOLE - RES. 090226 non-profits and regular developers -- just private developers rather. And we are ready to come forward with the Small Business Guarantee program and to do that.
Very shortly. We could sit down with you and go through the details, but we think we've structured them the right way, as we discussed, in terms of community development financial institutions and have money from the bond program to put towards that, which was allocated.
Thank you. I can actually jump to some other questions. With regard to the Office of Economic Opportunity, how much of City contracting will be done over the next five years and what percentage do you anticipate going to disadvantaged businesses? 102 3/25/09 - WHOLE - RES. 090226 DEPUTY
I'd have to get back to you with those specific numbers. We're working on it.
Okay. Is it possible that that information can be provided within this hearing today? DEPUTY
How much in City contracting will be done over the next five years and what percentage of contract dollars will go to disadvantaged businesses? Is that part of the Five-Year Plan and is there a projection within the Five-Year Plan for how much contracting will go to disadvantaged businesses?
Councilman, I don't think we have a specific projection about that. As you know, what we've done is we retooled the MBEC Office into the Office of Economic Opportunity, and they are in the process of producing their strategic plan. A little bit behind on 103 3/25/09 - WHOLE - RES. 090226 that, quite frankly, but we're looking for that. That will give us a vision for the future about what our prospects are in terms of not only contracting, but in terms of business capacity building and things like that.
Well, in terms of business opportunity and business growth within the City and growth for Philadelphia businesses and growth for disadvantaged businesses, don't you think it's appropriate that that would be within the Five-Year Plan as a key component of the Mayor's vision for the City that it actually should be some statement in terms of economic opportunity over the next five years?
I certainly don't disagree with that premise. It's just the strategic plan just hasn't been done. As you know, we hired a new head of that office. They've been working on it. It just isn't ready yet at this point. Certainly going forward, we will 104 3/25/09 - WHOLE - RES. 090226 probably make that an integral part of our plans going forward, but it just wasn't ready at this time.
You're welcome. The Chair recognizes Councilman Kelly.
Thank you, Madam President. Currently, our property tax is about 82.64 mills?
And you intend to raise that number to 98.64 mills, or 19 percent, in 2010. Then in 2011, it will be reduced to 94.64, a reduction of four percent. Now, you're asking for a 105 3/25/09 - WHOLE - RES. 090226 property tax increase, and in answer to Councilwoman Krajewski's questions, the plan for full assessment will be in 2011; is that correct?
Now, what you're asking for is a double increase, you might say, in the year 2011. Well, what I'm alluding to here is that there are certain people in this city who could care less if we raise it 50 percent or there are businesspeople in this city could care less if we raise the business taxes a hundred percent, for the simple reason they don't pay them, and what we're asking property -- residents of Philadelphia, especially property owners, is that they take another hit. What I'd like to do -- and I know the Mayor was on television and has to do with -- in your testimony today you say you prioritize the collection of unpaid and delinquent taxes. Could you 106 3/25/09 - WHOLE - RES. 090226 tell me how much is owed by businesses, how much is owed by real estate taxes? Now, I want to be perfectly clear. I don't mean in answer to Councilman Jones' question about Sheriff's foreclosures. These people are only in debt probably in the last year or so because of the economic downturn. But I don't want to see anybody losing their homes, because these are the same people who have been paying their taxes for many years. What I'm talking about is people who have owned properties in this city who haven't paid taxes in five, six, seven, eight, as many as ten years, and they still owe taxes. So what I am asking for is, how do you propose and what is your optimistic outlook in gaining some of these delinquent taxes? How much is owed? Could you tell me a breakdown of property taxes and also business taxes?
I'll let Mr. Dubow address the question, but they, 107 3/25/09 - WHOLE - RES. 090226 with the Law Department, have started a very aggressive tax collection program, but I'll let Mr. Dubow answer that question.
We have those details. I don't have them with me. We'll get the numbers for you on the business tax and the real estate tax. I can tell you that for both of them, within about -- we get about 90 percent in the first year and then within a couple years after that, we're in the mid 90's. So there are a relatively small percent of people who don't pay, but they create a big problem that we know we have to address. And we have taken some fairly aggressive steps to go at them. I think the most public has been publishing the list of business tax delinquents. We've also enhanced our auditing staff. We've increased the extent to which we match various returns to make sure that people are paying. 108 3/25/09 - WHOLE - RES. 090226 We've done things like auditing parking lots to make sure that they pay. So we've taken a number of steps. We built about million in 6 additional collections into the Plan in 7 each year. So for this year, it was 8 about half a year and we thought we'd get about 4 million, and we've gotten about two and a half already.
In additional collections from the initiatives. So we're on track to make our projection for this year, which then should get us to the 8 million for next year. But we know we have to keep being more and more aggressive.
What percentage is that two and a half million, percentage of how much is owed?
It's a relatively -- it's a small percent. I mean, we have to build that up. We'll 109 3/25/09 - WHOLE - RES. 090226 get you all those numbers on what's owed and what we're doing as a percent and what percent we actually collect each year.
We added about, I think, three or four people. So it's probably cost us about $150,000 in extra costs to generate that.
You're welcome. The Chair recognizes Councilwoman Sanchez.
Going to 110 3/25/09 - WHOLE - RES. 090226 the issue of the real estate tax along the line of Councilwoman Krajewski's questioning, two weeks ago the Board of Revision of Taxes was before Council and her committee in particular, and I heard a very frustrated colleague, Councilman DiCicco, speak to the fact that we are depending on an independent body that has continuously made commitments around its ability to get it right. You're asking us to do a percent increase on what 13 we've all determined is a broken system; 14 would you not agree to that? 15
Are you 18 saying that if we were to approve a 19 19 percent increase, do we have the ability to tell the BRT not to continue its assessments so that people don't get, in addition to what would be a tax increase, an additional assessment, as has been the case?
No. I mean, 111 3/25/09 - WHOLE - RES. 090226 they're an independent entity. We don't have the ability to do that.
Do you not agree that is a problem for us? If I'm going to say we're going to increase taxes by percent, but we don't have 8 the ability to say people won't 9 continuously receive erroneous 10 assessments and, therefore, they could 11 get another tax increase? 12
Councilwoman, 13 I mean, I think you're pointing out the 14 difficult position we all find ourselves 15 in. None of us contributed to this 16 situation that we find ourselves. We 17 think that under the circumstances, this 18 is the least worse of the options that we 19 have. All things being equal, would we want to do this? No, we certainly wouldn't. The hope, however, is that we are very close, if the BRT is correct in their estimate, that within weeks we should have these new numbers and that we can, in planning for 2011, plan on having 112 3/25/09 - WHOLE - RES. 090226 assessments that we can all have confidence in in the next round of assessments. But we find ourselves in this situation. Nobody wants to do this. It is an imperfect system at best and a worse system for that.
It is going to be very difficult for even someone like me, who believes that it's tough times and tough decisions need to be made, that I would approve a 14 percent increase and that we couldn't and 15 the Administration couldn't get some 16 assurances from the BRT that they're not 17 going to continue their assessments. So 18 that you know moving forward that's just 19 my position. That is going to be very 20 difficult, any increase, and then we can't control or get them to agree to stop their flawed assessment process. One of the things is, going back to what some of my colleagues are saying, last year with this 113 3/25/09 - WHOLE - RES. 090226 Administration's support and obviously the President of City Council, we have been exploring other options around our business tax structure, and one of the things -- we've officially requested updated numbers for some of those assessments and some of the discussion that we had, that the discussion became moot once the Mayor agreed to freeze all business reductions, but one of the things that I'd like to see us be able to do as part of this discussion is revisiting the business privilege tax and who we tax, because one of the things that we found during that assessment is that we have about 90,000 businesses, but 2,000 of those businesses pay a large majority of our gross receipts tax, and I'd like us to explore the option of looking at the possibility of increasing the business privilege tax, where those numbers take us, and use what we haven't used in the past, our ability to exempt certain businesses, manufacturing and 114 3/25/09 - WHOLE - RES. 090226 retail, as another option of generating revenue for the purposes of the discussion of whether we do percent 5 real estate. While your point, Clay, to 6 the fact that 43 percent of businesses 7 pay taxes, not all businesses pay their 8 fair share. 9 So for the purposes of the 10 discussion, what I'd like to ask for the 11 Chair -- for the submission to the Chair 12 is, if we were to in fact look at a 13 millage increase in gross receipts tax, 14 with some possible exceptions to the 15 vulnerable businesses, being 16 manufacturing and retail, what those 17 millage changes mean to us based on our 18 revenues for 2008. 19 (Bell rung.) 20
I think I understand, but we probably need to have a little further discussion about the details of how you'd want that to look.
It's the same format we were using in the previous 115 3/25/09 - WHOLE - RES. 090226 discussion around a more progressive gross receipts tax that provides relief for our small businesses and our vulnerable businesses, but keeps Walmarts and Coors Light and all those folks on the table. And I think that I'd like to see the Administration produce for us some numbers around if we increase millage for those big guys, who don't pay any net income -- and that's important for people to understand, the big guys don't pay any net income. If we looked at increase in their millage, we have by law the ability to exempt manufacturing and retail and, therefore, can generate some additional revenues.
I think I understand the concept. I just want to have a follow-up conversation with you to make sure we give you what you want.
Thank you. 116 3/25/09 - WHOLE - RES. 090226 The Chair recognizes Councilwoman Miller.
Thank you, Madam President. I have just a couple quick questions. First of all, I'd like to hear from the Administration who do they consider the most vulnerable citizens so that we'll all be on the same page.
I think among those who we would consider vulnerable -- I'm not sure this is going to be an exhaustive list, but it would certainly be children, the people of lower economic means who don't have the ability or the -- to weather some of these economic storms, but the infirmed, invalids, people of lesser means. But those would be the kind of broad categories, but certainly looking out for our youth.
And I guess that list would also include homeless, senior citizens?
Okay. I just wanted to make sure, because sometimes when I read part of the Plan, I kind of thought you were just talking about homeless people, because you forgot someone else, a senior citizen on a fixed income, would really have difficulty perhaps paying a percent increase in 13 their real estate taxes. In fact, I was 14 at an event on Sunday and a 92-year-old 15 woman said that to me, and I just want to 16 say it to you also. 17
Regarding 19 that, what percentage of the City has not been assessed in more than five years; would you know that?
I think it would be a fairly small percent, because the year before last, the BRT assessed a large number of properties. I mean, well over 118 3/25/09 - WHOLE - RES. 090226 300,000. So I think within the last five years, they've probably gotten most of the properties, but we can check and make sure.
Okay. Because I'd like to get to the Chair a list of the assessment breakdown as it relates to different areas of the City, because that reassessment is going to be important. And in the Plan on Page, I believe, 5 when we're talking about economic recovery and jobs, one of the goals is to increase high school graduation rates by 50 percent in five years. How do you plan to do that, particularly if we're going to cut out and are we eliminating completely CORE Scholarships, CORE Philadelphia Scholarships?
Because 119 3/25/09 - WHOLE - RES. 090226 you know, the CORE was just an easy place for me to refer our constituents to, because you get so many calls around high school graduation time and people looking for money for their children for college, and CORE I thought was really great for Philadelphia residents. (Witness approached witness table.)
I'm Lori Shorr, Chief Education Officer. The money for CORE Philly Scholarships came to us -- we have put money in for that scholarship for many years, so has the School District. We received a letter from Congressman Fattah I believe in November saying that he was shutting down that program.
Okay. And it looks like in the budget the reduction here is, what, 1.1 million?
Yeah. What we did, since the program was going away, is ensure that we had enough money in the 120 3/25/09 - WHOLE - RES. 090226 budget in 2009 to meet all the commitments that had been made to students, and then we took it out for '10, because there's no program anymore.
Okay. So this program was totally funded by Fattah and federal dollars and city dollars, correct?
And you're right that that scholarship has been pivotal for students. There are some things that are coming in at the federal level and the state level that Congressman Fattah is working on federally and also some things that are happening at the state that we're hoping will mitigate some of the negative impacts of that program shutting down.
Okay. Because that will be good, because then 121 3/25/09 - WHOLE - RES. 090226 that actually goes to help you accomplish the second goal of doubling the number of residents with a four-year Bachelor's Degree in five to ten years.
Right. And certainly as tuition has grown over the last 10 to 15 years, finances are a real barrier for many students. So we're -- in fact, some of the things that we're doing is to get more students to complete the student -- it's called FAFSA, but it's the federal form to get student aid, because not all of our students in this city get even the federal aid that they can use to go to college. (Bell rung.)
Yes. Okay. I guess we have to abide by the rules. Thank you, Madam President.
122 3/25/09 - WHOLE - RES. 090226 You're welcome. The Chair recognizes Councilwoman Blackwell if she's in the room. (No response.)
The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. On the real estate tax increase, do you have any sense of the percentage of individuals who own properties who fall within the range of people who will have the real estate tax rebate available to them, meaning that the real estate tax for the property will go up, but in actuality, they will not be paying because they're entitled to a rebate. My sense is it's probably a significant number of folks since we have --
We don't know. We'll get back to you. COUNCILMAN DiCICCO: I think 123 3/25/09 - WHOLE - RES. 090226 that will be helpful, especially when we go out to community meetings and talk about that as well. I think that could be helpful. And the only other thing I would add is, last Thursday evening I had a community meeting in Queen Village, which was the same day that the Mayor gave his budget address, and although they were not happy about the real estate tax increase, the biggest concern they had -- and it goes to some of the other questions that were asked -- is on the full value. It's like, You're going to tax us now, but in the end, it never really will go away because full value will either make up the difference of what goes away and, in actuality, it will always stay the same or actually may increase going forward. So you're going to need to figure out what that response is, and I know we don't have the numbers and now I'm hearing in a few weeks. I think the Chairwoman of the BRT said it would be by 124 3/25/09 - WHOLE - RES. 090226 April 1st, and I think I said that day I'll believe it when I see it. We may be talking about this next April 1st, I mean, the way they operate over there.
Well, I'll probably regret saying this, but based on the conversation I've had with them, I actually think that they will have it to us fairly soon. Whether the numbers are accurate is another thing, but I think they'll have something to show us fairly soon. COUNCILMAN DiCICCO: Thank you. But, again, if you can get those numbers to the Chair, I think it will be helpful. Thank you.
Thank you. The Chair recognizes Councilman Green.
Thank you, Madam President. So just to follow up on the questions I was asking last time, and the 125 3/25/09 - WHOLE - RES. 090226 way I'm phrasing this, it should result in a simple yes or no answer, which then please follow up --
Please follow up with any comments you have. Is the Governor going to support Philadelphia's necessary changes in Harrisburg?
We've gotten an indication -- I guess it was published and may be in a publication today -- that the Governor has indicated support at least for the sales tax, I think I understand, and that we have also been informed that it was in a published report that Senator Pileggi has also indicated some willingness to entertain and basic support for what we're trying to do.
And I think this is an important point. I do not intend to vote for a budget in the 126 3/25/09 - WHOLE - RES. 090226 alternative. In other words, for my vote on this budget -- and I know some of my fellow Councilpeople feel the same -- we're going to have to have the legislation enacted in Harrisburg that authorizes the assumptions, the core assumptions, that are part of this budget. In other words, what you're asking us to do is approve a budget that assumes we're going to get the relief we need in Harrisburg, but if it doesn't, we're approving a very different budget, including a six percent permanent increase in real estate property taxes and a bunch of other things. So like by June 30th or by the time we have to pass our budget, this has to be done, or you're going to have to -- as far as I'm concerned, you should have to come back before City Council to change the Plan. In other words, I'll vote for a budget, but I'm not going to vote for a budget in the alternative, and I don't 127 3/25/09 - WHOLE - RES. 090226 think it's reasonable for you to ask us to do so. Our job is to approve one budget, not a bunch of different scenarios, some of which aren't even covered, like what if we get one set of relief and not another set relief, et cetera. So I just want to put that out there. I don't think it's a reasonable request you're making of City Council. Let us know what the Plan is, get it done in Harrisburg or propose the alternative to us. So that's just sort of my starting point. Could you turn to the Plan. You're referring to a Washington, DC study that relied upon the estimate -- estimated the impact of real estate tax increases based on the assumption of a hypothetical household of three with an annual income of $25,000, but the Washington, DC study basically assumes most people with that income 128 3/25/09 - WHOLE - RES. 090226 level are renters. In the City of Philadelphia, we have one of the highest low-income property owner rates of any major city in the country. So I'm not sure that this is at all applicable to what is going to happen in Philadelphia. Is there Philadelphia centric data that you can provide on this?
Councilmember, no, there wasn't, and, in fact, the table to the right of that on was our attempt to get more specific data. We were trying to split this in a number of ways. We wanted to look at income impacts. We wanted to look at housing value impact. The Washington study is one that's used across the country. It's well thought of. We thought that was a good template to give people a flavor for what would happen. But to the extent that we could do Philadelphia's specific impacts and what we thought would happen to housing values and properties, what we did on the 129 3/25/09 - WHOLE - RES. 090226 right here on was our attempt at that, and there's an appendix in the back that actually looked at doing something similar for over a hundred neighborhoods in the City.
On the right you're talking about neighborhoods. You're not talking about families by income level, on . In other words, back to Councilwoman Miller's question, we're trying to see what the effect is on the most vulnerable, the not so vulnerable, et cetera. The table on the right doesn't do that. I mean, the table on doesn't do that. The table on just doesn't apply to Philadelphia because many of our low-income people are homeowners. (Bell rung.)
Well, two answers to that. We looked at the census data to try to break it by income quintiles, and it just didn't exist. But if you have some suggestions of other 130 3/25/09 - WHOLE - RES. 090226 income levels or other income data, we'd be happy to look at those.
Thank you. The Chair recognizes Councilman Clarke.
I have a question about Councilman Green's comment about the assumptions. So if we pass a budget based on the assumptions that you have proposed without having them approved by the state, the state hypothetically does not agree to the taxes and the smoothing that we're asking for, do you automatically go to Plan B or Plan C without coming back to City 131 3/25/09 - WHOLE - RES. 090226 Council?
I think the answer to that is that the legislation that has been transmitted with the Five-Year Plan anticipates the alternative, so that it would automatically revert to the other plan, but it is within the contemplation of this Council as we have this discussion going through the evaluation of the process. So we are now presented -- I understand Councilman Green's position that he would not like to vote in the alternative, but what we have provided to you is an alternative, and in the event that those two events that are in the control of the state don't happen, we have proposed a plan for your consideration and the legislation to go with it. So there would be the reversion in terms of the increases in the tax rates and those things are in front of you as we speak.
Point of 132 3/25/09 - WHOLE - RES. 090226 information.
I think the answer to the question that Councilwoman Tasco asked you is yes. I mean, the short answer is yes, that you're basically asking us to authorize Plan B or C at the time rather than coming back to us.
And I think that was the answer that I gave her as well as --
And we also have to make sure it's approved by PICA 133 3/25/09 - WHOLE - RES. 090226 as well.
And Plan B raises the real estate from to 6 21 percent. 7 The Chair recognizes Councilman 8 Clarke again. 9
Thank you. 14 I'm trying to get two questions 15 in, real quickly. One, with respect to 16 recording fees, you are requesting an increase in recording fees, and that will raise approximately how much you anticipate?
We have, Councilmember, about 2.4 million, and the fee would be an additional $30 on what's already levied or what's already --
We had not allocated any of the increase back to the Housing Trust Fund.
Is there a reason why? I mean, I know there is, but I got to ask the question.
So the agreement from prior years when the Housing Trust Fund advocates went to Harrisburg and got the legislation created to allow a portion of the recording fees to go to this Trust Fund, that's off the table?
We're not looking to take the current situation and change that. We're looking just at the new revenue, the increment that would be generated by the $30. 135 3/25/09 - WHOLE - RES. 090226
I understand, but I'm saying as we move ahead, if there is any subsequent increases, not to mention this one, then there would be no sharing or no money going towards the Trust Fund?
Have you communicated that to the advocates from the Trust Fund and also members of the Board, who I happen to be one?
No, we did not. We were just looking at the 2.4 to close the gap, and your concern is an understandable one.
I mean, don't you think -- at a minimum, you should at least have those conversations. All right. Thank you. With respect to the stimulus dollars -- and we had a long hearing yesterday, I think quite substantive. We will be following up with the 136 3/25/09 - WHOLE - RES. 090226 Administration on their portion of it, but one of the things that came out that consistently is characterized as one-time funding, and I agree with that, although I do agree that the Administration is putting priorities on those categories that are in the stimulus. But what I'm hearing from the Administration is that it implies that there will be no help for the budget, and I agree FY09 and FY10 you're probably right. But to suggest -- and maybe I'm wrong in assuming that that's what you're suggesting -- that in '11 and '12 and the out years there will be no impact as it relates to the stimulus on our Five-Year Plan, are you suggesting that there will be no new jobs created or are you suggesting that the substantial revenue that's coming to the City -- when I listened to SEPTA yesterday, their presentation clearly spells out how they're going to spend the money, and it's a lot of money, and that's going to be purchase of materials, 137 3/25/09 - WHOLE - RES. 090226 jobs, the whole nine yards. I think you know where I'm going.
Yes. And I think the short answer is, I agree with you. While there's no direct help for the City's General Fund, there will be indirect help, because there will be more jobs in the area. I think Joe Casey had specific numbers for how many jobs it would create. So there will be some help with our tax numbers that come from the stimulus money. So there's that benefit, but there's nothing -- what I was trying to say is, the $80 million we identified, there's not a pot there that goes directly into the General Fund that will supplant current dollars.