But we also need to do it in a way, you know, that keeps our plan balanced. And one of the things that Paul Levy said when he was here is that when we look at Wage Tax reduction, there are consequences. And one of the things he said we have to look at is the impact on services. I mean, and that's what we've been saying all along. If we want to reduce Wage Taxes, and we want to do it by ourselves, there are going to be implications to it.
Okay. Fair enough. Thank you. I have no further questions, Council President.
Thank you. The Chair recognizes Councilwoman Brown. Is Councilwoman Brown in the room?
Thank you, Madam President. My concern was addressed by Councilman Nutter. Thank you.
Thank you. 00067 03/18/03 - Committee of the Whole I was distracted. The Chair recognizes Councilman Clarke.
I want to ask you a couple of basic questions. Why do we do a five-year plan?
And we traditionally do it... We do a tax bill for the Fiscal Year.
The income in the Fiscal Year, and project certain revenues and expenditures for the following four years.
Right. And the reason that PICA Act requires a five-year plan is to make sure that if there are items that we want to include in the plan, that it's over five years. I mean, it's often easy to fix one year in a budget to make it look like you're 00068 03/18/03 - Committee of the Whole balanced. But the PICA Act was designed to make sure that we had a longer term balance.
All right. And then there are other certain realities of a five-year plan that sometimes you need to adjust the five-year plan based on the revenues or expenditures or uncertainties associated with the larger economy, the State, the Federal government. So therefore, it may not be prudent to lock yourself into a particular, either a reduction or an expenditure program that we could not achieve realistically in the third or fourth year.
That's right. There are always a series of risks in the plan, like you said, like what's going on with the economy. We mentioned the pension fund before, where things can get you, know, much worse than they appear to be at the present.
And unfortunately, the likelihood that our economy may worsen, I guess what is it? I guess it's not 48 hours now. Whatever the time line that was set by 00069 03/18/03 - Committee of the Whole our President.
Right. Probably 35 hours. There could be potentially a worsening of the national economy as a result of an impending war. There could also be, assuming that Mr. Rendell, the Governor, can't restructure his Budget that was passed in record time by the legislature, and its impact on the City, that my understanding, it could be upwards of $100 million.
Then the projections in the current five-year plan may have to be readjusted, because we didn't anticipate that reduction of $100 million.
That's right. If the State budget passes as is, the plan will definitely have to be adjusted.
So if we lock ourselves into a mandated, either reduction or expenditure program over the next five years, it 00070 03/18/03 - Committee of the Whole would be that much more difficult to respond to the impact of either the State's potential reduction in $100 million or what possibly may happen as a result of the country going to war.
Okay. All right. I just wanted to get some fundamental issues out there. Thank you. Thank you, Madam President.
The Chair recognizes... Councilman Nutter is next but he's not in his seat. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President, and good morning.
Good morning. COUNCILMAN DiCICCO: We may have discussed this in the past, and I apologize if we're asking you to repeat it. Earlier, Mr. Dubow, in your testimony, you project that in the five-year plan, 00071 03/18/03 - Committee of the Whole at the end of the five-year, I assume, which would be 2008?
Yeah. If you're talking about the $40 million projection? COUNCILMAN DiCICCO: The $834 million.
Yes. That was accumulated deficit at the end of -- COUNCILMAN DiCICCO: Accumulated deficit. In 2000, when we did the five-year plan, the year 2000, what were your projections for that five-year plan, which would obviously bring us to 2005?
I think when we put that plan together, again, it was balanced at the end. I don't know what the exact number was. COUNCILMAN DiCICCO: But it was balanced, right?
Oh, yeah. COUNCILMAN DiCICCO: And we started that year with an approximately $600 million surplus?
No. The highest our 00072 03/18/03 - Committee of the Whole surplus ever got was $295 million. COUNCILMAN DiCICCO: So $300 million surplus?
(Nods head in the affirmative.) COUNCILMAN DiCICCO: So, if we take the $300 million, and your projections are right for the new five-year plan, or the current five-year plan, we will be -- it's about a $1.1, almost $1.2 billion turnaround.
It would have been. COUNCILMAN DiCICCO: The $300 million surplus, and you add in the $800 million projected deficit, that's a $1.1, $1.2 billion turnaround.
Let me just make clear that the plan as presented to Council does not include an $834 million deficit. It includes a series of actions to avoid that, so that at the end being balanced is about $14 million. COUNCILMAN DiCICCO: Why then do we -- Why do we even bring up the $834 million deficit? I'm --
We didn't bring it up 00073 03/18/03 - Committee of the Whole today. Councilman Nutter did. We have it in the plan to say this is where we started; here are things we're doing to get rid of it. But today we didn't mention it at all, just to be clear. COUNCILMAN DiCICCO: Well, it came out in testimony.
It was a question. What Council Nutter said is, if you were projecting an $834 million deficit when you started the plan, why do you include tax reductions? And our response is, we included tax reductions as part of the comprehensive plan that showed our getting to a balance at the end. COUNCILMAN DiCICCO: What is the reason for our current fiscal situation of the expenditure of the $300 million surplus?
There are a whole variety of things that happened. The largest things that have happened to turn around what was a growing fund balance to a decreasing fund balance or one -- Well, it's really what's happened with the economy. We went from seeing wage tax 00074 03/18/03 - Committee of the Whole increases that got as high as five percent to last year where it was under...
It was .061 percent wage taxes -- COUNCILMAN DiCICCO: Kind of neutral.
So, we used to get, if we got a five percent increase -- COUNCILMAN DiCICCO: But -- It was flat.
Yeah, but here's what's changed. So that would, you know, five percent down to basically zero percent on a $1.3 billion tax has a substantial impact on your bottom line. And the other big change that the economy has brought around is our -- Charlie is looking at me like that was insane. COUNCILMAN DiCICCO: I'm a little confused about how we have a flat, as far as the Wage Tax concern. It was flat. There was no 25 decrease. For all intents and purposes we'll say, 00075 03/18/03 - Committee of the Whole assume there was no increase. Why does that have an impact on the Budget?
The plan had projected an increase, and so you were expecting to have an increase. COUNCILMAN DiCICCO: No, but you have a $300 million surplus. That wasn't projected, was it? That was actual; was it not?
Yeah. But if you have zero percent growth in the Wage Tax and at the same time you have health and medical benefits going up 12 percent -- COUNCILMAN DiCICCO: That's what I'm getting at.
-- you have pension fund costs that are going through the roof, you have negotiated an arbitrated award wage increases that are going up three percent, and you don't have your main revenue source growing to support that, you wind up losing money each year. COUNCILMAN DiCICCO: So those health benefits, pension increase benefits or contributions are the main purpose or the main reason why? 00076 03/18/03 - Committee of the Whole
Those are the biggest. I mean, there are other things. COUNCILMAN DiCICCO: What portion of the $300 million would you say that cut into that $300 million?
We actually looked at it -- When we were looking at what they did, we were looking at how we got to, you know, the $800 million problem. And there was a chart that showed that between the pension increase, the health benefits increase, and the increase in our prison health contract, it was about a $700 million hit, just those three items over the five years. COUNCILMAN DiCICCO: Over five years.
Yeah. COUNCILMAN DiCICCO: Maybe I'm missing this because I'm not familiar with it. But I just still can't figure out where the $300 million... Is it all because of the increases that you just spoke about that wiped out the $300 million?
Those were a big part. 00077 03/18/03 - Committee of the Whole I mean, we can give you a chart that can show you $300 million, and then, you know, things that increased. And we can -- COUNCILMAN DiCICCO: I'd like you to supply that to the Chair.
Yeah. So we can... COUNCILMAN DiCICCO: No further questions, Madam President.
Councilman Nutter, I believe your light was on. Do you have any questions?
Yes, I did have one question. Mr. Dubow and Ms. Kammerdeiner, with regard to real estate taxes -- and I'm sure we'll have more of this discussion next week. But we've had a lot of discussion here today, naturally, about property taxes and wage taxes, and the like. During last year's hearings on property taxes, which have spilled into a discussion this year, explain to me why in the budgeting process, for instance, the City anticipated and we approved a budget for the current fiscal year that I believe anticipated 00078 03/18/03 - Committee of the Whole generating $321 million in real estate taxes for the City, and I think it was $443.6 million in real estate revenues for the School District. Is that approximately right?
That's -- The $321 million in '03 was the current portion, so that's accurate.
Right. Why is it, unlike in some other municipalities either in Pennsylvania or across the country, this whole issue and discussion about the -- And you may have another term for it, but I have referred to it as the windfall, this annual phenomenon of you put forward a budget in January, as the Mayor's required to. You make your best estimate, based on the past, and however -- whatever other tools and mechanism and models that you might utilize for the future. We approve the Budget in the Spring. The assessments come out in the Summer. And 00079 03/18/03 - Committee of the Whole invariably, I believe, over the last 30 years, pretty much the assessment number has -- the total value of the assessments has been greater than the anticipated budgeted amount. Is that fairly accurate?
Well, I think there have been years where it goes the other way, too, but I'm not sure --
Why is it that in Philadelphia, as compared to some other places, we don't adjust the tax rate to match what the approved budget amount was, as opposed to allowing what amounts to a back door, unauthorized tax increase on our citizens by having the assessment process drive the total amount of tax revenue? Invariably the amount of tax revenue is in excess of what we told the voters -- I'm sorry -- what we told the citizens that we were approving when we passed the Budget in the Spring, and subsequently you have assessment shock in the 00080 03/18/03 - Committee of the Whole Summer. Why is it that the rates don't match what we actually told the citizens of the City that we were approving and authorizing in the Budget?
I'll answer from a budgeting perspective first, which is that the Budget has, you know, a whole host of things that -- Nothing in the Budget will wind up coming exactly where we budgeted. Things come in higher; things come in lower.
If we take actions to eliminate all the things where it comes in higher, we're only going to be left with things that come in lower, and we'll have deficits. And I know that's what you're proposing, but that's kind of...
...the simple 00081 03/18/03 - Committee of the Whole explanation for why, just from a Budget perspective, we wouldn't immediately take it away if --
We would immediately give back the revenue if it came in higher than the projection, because there will be other things inevitably come in lower --
-- -set that. From a tax policy perspective -- And, you know, I -- I don't -- I wasn't here when, you know, this system was created. But I assume that the idea was that your value is going up, so you are -- your wealth is increasing, and that's the increase in tax. But maybe Nancy can --
And so, I know you didn't create the system. I mean, that's a 00082 03/18/03 - Committee of the Whole flawed concept.
The increase in value of your house has nothing to do with the increase potentially to your, quote, unquote, wealth. I mean, this is wealth on paper, if you were deciding to buy -- to sell your house. Has nothing to do with how much money you have in your pocket.
What can I do with it? I can borrow more money against it but I can't pay the tax bill.
The assessment process and the taxation process we use for real estate is based on and really comes directly from State law. And though I can't detail for you the differences between what we're required to do in a County of the First Class and the other counties in Pennsylvania, I know there are differences in the way we are required to assess.
I understand 00083 03/18/03 - Committee of the Whole that. That's on the assessment side.
But basically that's where the difference comes in. The other counties tend to leave their assessment static, and they use their rate to change the revenue amount up or down on an annual basis. And the Council or other body in that jurisdiction, because it could be a School District, it could be another taxing district, uses that countywide declared assessment value. I believe under the assessment provisions for a County of the First Class, we must do it annually.
And then it would be the choice of this Council, and with the approval of the Mayor, to change the way the rate would be handled. Those are two separate actions. One is required under State law for the assessment practice, and the other is the rate at which we tax using that assessed value.
I understand that. But the rate is a major factor in what the 00084 03/18/03 - Committee of the Whole bottom line is on the person's bill.
But we do establish or have the opportunity to establish that each year for the ensuing year. You've done that by changing the millage from the City to the School District. But basically, this Council does have the opportunity each year during the Budget process to establish the rate for the coming fiscal -- or actually, in the course of the tax, the coming calendar year.
Because the taxes are calendar year based, as opposed to fiscal.
For the record, when was the last time Council changed the tax rates? And what direction did that rate change -- In which direction did that rate change go?
I don't have the history on real estate tax with me. But other than the millage shifts between City and School District, it's probably been about eight years since there was a change. And then I believe it was an upward millage change. I think it was an 00085 03/18/03 - Committee of the Whole increase.
But it was a number of years ago, other than the millage shift.
Actually, it was 1991. Okay. Thank you. We'll have more discussion about that. But it is true that in other municipalities, both in Pennsylvania and in other locales, the tax rate is changed as a function of the total assessment amount, as compared to the municipality's budgeted amount. And they adjust the rate such that the amount that is generated is equal to what was passed. In which case, in our situation over the past few years, it would mean the rate would go down, which would result in less of an increase for many taxpayers.
I believe they set those rates based on their anticipated revenue 00086 03/18/03 - Committee of the Whole from the assessed value that's there. They're still doing it on a future basis. They're not going back and changing it midstream during the course of the tax year.
They're establishing the rate at the beginning of the year for that ensuing tax year.
Which is in essence what you're doing each time that you look at the rates. It's just that historically in the last decade the Council and the Administration have chosen to leave the rates at the same level.
Right. Well, that gives you the opportunity to just blame everything on the BRT and have no responsibility for it. You don't have to respond. Thank you, Madam Chair. And you weren't going to, were you?
You are very smart. Thank you, Madam Chair. 00087 03/18/03 - Committee of the Whole
You're welcome. Are there any other questions or comments from Members of the Committee from our witnesses? (No response.)
Okay. Seeing none, the Committee will stand in recess.
We have two other Bills that Ms. Kammerdeiner has testimony on.
08 and 10. I know there were some questions raised about 08, but we didn't actually provide that. Written testimony has been provided, and if that's sufficient, that's fine from my perspective.
All right. We have the written testimony. If you just want to...
Can I take advantage of the Chair being tied up and just ask one question?
Oh, you weren't asking me? 00088 03/18/03 - Committee of the Whole
No. 3 Unfortunately, the decision on that question is on this side (Indicating) of the table.
Yeah. No; it was a good opportunity for you. Two quick questions. One, the schedule that I discussed regarding Bill 030008 for gross receipts rate as well as the manufacturers, wholesalers, retailers. When could we expect to receive a document on that?
That should not take us long to calculate. I would say possibly even tomorrow.
Tomorrow. And let me ask this question. With regard to establishing a schedule in the law, given that the schedule was put out last year and it's being proposed again this year as a part of the five-year plan, what is the Administration's position on putting forward a schedule, laying out with certainty what the gross receipts tax rate will be? 00089 03/18/03 - Committee of the Whole
I think we'd have to take another look at that. Having it here as a goal, but without certainty on it is one thing. Whether that's something we would be comfortable ascribing to in legislation is something I think we need to ask ourselves and take a look at before agreeing.
Well, but you're committed to this, right? I mean, you're going to --
This is the intention. But there will be an evaluation of where we are, both with the economy and other factors next year, and there could be changes if it's not in the law.
Miss Kammerdeiner, I mean, your testimony makes the case, it seems to me, for doing this. Is there anything that you would anticipate within reason that that would happen that would cause you to change your mind about this particular statement in your testimony? Empirical research by Robert Inman of the Wharton School of Business indicates that 00090 03/18/03 - Committee of the Whole accelerated reductions in the Gross Receipts Tax could act as a job creation program, stimulating the Philadelphia economy, and providing tax revenue gains that may help to offset the short-term revenue effects of the tax rate reductions. Is there anything in that statement that you don't agree with?
Is there anything that could happen that would cause that to be wrong?
What I'm saying is, it's likely that we would support it in law. But we weren't looking at it from that standpoint when it was established for the plan. And you asked the question would we be willing to have it there. I would like to take a look at it and consult with others in the Administration to ensure that that is something that we wouldn't have a problem with in the law.
Well, do you have any reason to think that if you came back to 00091 03/18/03 - Committee of the Whole us next year you wouldn't propose the Gross Receipts Tax rate to be at .19 as a reduction from .21?
Not at the moment, but a year from now the situation could have changed as a result of changes in the economy or otherwise, in terms of our requirements for expenditures.
-- that in the next year things will be so great that we won't need to do it?
It may be so great that we can do a larger change. That's something that I can't predict right now, and this is -- this is not --
I mean, my hair may come back and I'll open a barbershop; but, I mean, that's not likely. So, I mean, what are we talking about here?
I was just 00092 03/18/03 - Committee of the Whole suggesting that I would like to be able to verify with others that we have no objection to that for it being in the legislation, as opposed to being in the plan.
Okay. Lastly, I mean, Miss Kammerdeiner, let me remind you that this accelerated schedule was proposed last year as the reason that... Not only the reasons were job growth, it was the best thing to do, and it was part of the reason as it was proposed why we should -- I mean, it was so good last year, not only should we do it, but we should stop the Wage Tax reductions and do this because of its potential impact on the City of Philadelphia. How can you possibly back away from this idea now? It is astounding to me.
I'm not backing away from the idea. What I'm saying is that because we now have the Wage Tax reductions that were not part of the plan at the time it was suggested last year, we will need to look at it each year to be sure that it still is the appropriate rate.
But we adopted 00093 03/18/03 - Committee of the Whole this also as a part of the five-year plan. I mean, we send this to PICA. We say to the world, this is what we're anticipating doing. Pass our plan, based on these numbers. These numbers have been incorporated into the plan. I mean, short of it being law, with the resolution of going to PICA, I mean, it is the most affirmative statement by the government that this is what we plan to do. I don't understand the reluctance now to say to the taxpayers and the business people: We are going to do this. We want to give you tax certainty. We want to provide a stable tax environment. And you will know now for the next four on the Wage Tax, and the next five on the Gross Receipts Tax, this is what's going to happen in this City. Why wouldn't we want to provide that level of comfort, security, and commitment to the taxpayers and business owners in this City?
By the time we get back to you with the other calculations, we'll get you an answer. I mean, it sounds like a reasonable idea. We just want to consult with people before 00094 03/18/03 - Committee of the Whole we sign off.
Okay. I appreciate it. Thank you. Thank you, Madam Chair.
All right. All right. We do have copies of your testimony on Bills 030010 and 030008. We could give the entire copy to the stenographer, who will transcribe them. Are there any questions from Members of the Committee on either one of the two bills before us? (No response.)
Is there anything that the Administration would like to add?
I believe the testimony covered everything from our end.
Fine. Thank you. Okay. The Committee of the Whole will recess the public hearing. (Brief recess.) We are now back into our Public Hearing of the Committee of the Whole. We will 00095 03/18/03 - Committee of the Whole recess until 1:30 today when we will have public testimony. Thank you all very much. We will have public testimony at 1:30 today. (Recess at 11:30 a.m., to reconvene at 1:30 p.m.) (Reconvening at 1:45 p.m.)
This is the continued Public Hearing of the Committee of the Whole. And this afternoon and this evening we will be having public testimony. Our first witnesses today are Edna Williams and Pastor Charles Lenar. Are they here? (No response.)
Peggy Amsterdam. Are they outside? I'm sorry. You are?
Good afternoon. I apologize for the inconvenience, but as many of you may or may not know, in April we had a flooding in our Chambers, and we've had to 00096 03/18/03 - Committee of the Whole use this courtroom. And as I said, it's not as convenient. And I'm sorry the people have to be standing, and we do have people in the anteroom. But I think with everybody's patience we will survive this. All right, Miss Amsterdam, please identify yourself for the record and proceed with your testimony.
Good afternoon, Councilwoman Verna and Members of City Council. My name is Peggy Amsterdam, and I'm the President of the Greater Philadelphia Cultural Alliance. We are a regional arts and cultural advocacy organization. Thank you all very much for the opportunity to testify today in support of an increase to the Philadelphia Cultural Fund. As you can see, I have with me today several members of the arts and culture community, who are supported by grant awards from this fund. And after I speak, you will hear from Nancy Goldenberg about the history of the Cultural Fund and of its impact on the grantees in the City. 00097 03/18/03 - Committee of the Whole But I'm here to share some information about the organizations supported by the Fund and their commitment to Philadelphia's neighborhoods. The Philadelphia Cultural fund is a very important source of general operating support that allows organizations to carry out projects advancing and complementing their service oriented missions. Without resources to address basic operating expenses, cutbacks are necessary in programming that revitalizes neighborhoods, increases tourism, and provides safe and enriching after-school activities for our children; and our community suffers as a result. Several of the representatives we have with us today have made great sacrifices to be here, and many others are working in the City right now who couldn't attend at this moment. Coming out even for an hour sometimes places undue burden upon these providers of City services. And budgets are very tight right now, as you all know, and many arts and cultural organizations have had to make 00098 03/18/03 - Committee of the Whole sacrifices, adjustments that would include layoffs and limiting services. And these adjustments are not in line with our City's desire to attract and retain businesses and residents. Philadelphia arts and cultural organizations make this City a popular tourist destination, as well as an attractive place to set up businesses, receive an education, seek employment, and establish a place of residency. Our arts and culture amenities provide us with a competitive advantage. Investing more in our cultural assets increases the impact of neighborhood revitalization programs and local economies. Arts and culture organizations have a great impact on communities. They foster cross-cultural connections, stimulate population growth, and create a community where every person, regardless of his or her social, ethnic, or economic background, can contribute as an equal and succeed. It has been found by Mark Sterns, Professor of Social Welfare at the University of Pennsylvania that disadvantaged neighborhoods with 00099 03/18/03 - Committee of the Whole high cultural participation were four times more likely than average to have lower rates of truancy and juvenile delinquency among their youth. He also found that during the 1990s, neighborhoods that had high levels of cultural participation were more than three times as likely to experience population growth as areas with low participation. That participation is made possible by the Culture Fund support of the City's arts and cultural organizations. Supporting an increase to the Cultural Fund, then, is critical to the continued success of our neighborhoods, our economy, and our City. On behalf of all of the cultural representatives here today and many more who could not join us, I thank Council for its past support and ask that you continue this commitment by establishing the fund's continued growth in the City's five-year plan to reach $5 million in the next five years. I understand that Councilwoman Blondell Reynolds Brown is currently preparing a budget amendment for an increase to the Fund's 00100 03/18/03 - Committee of the Whole FY '04 appropriation.
So I would like to thank the Councilwoman, along with the Board Members of the Cultural Fund who sit on City Council, Councilmen Rizzo, Cohen and Ortiz, and the Administration and all of the Members of City Council for their support of this important initiative. Thank you very much.
Good afternoon. My name is Nancy Goldenberg, and I have the honor of serving as President of the Philadelphia Cultural Fund, the non-profit corporation established by City Council in 1991, for the purpose of providing funding to arts and cultural organizations within the City of Philadelphia. Joining me is Anne Edmunds, Director of the Philadelphia Cultural Fund. In January our Board unanimously voted to endorse the long-range financial goal for the fund of reaching five million in five years, a recommendation based upon research on comparable cities and upon recommendations of the Arts and 00101 03/18/03 - Committee of the Whole Culture Policy and Planning Transition Committee of 2000. 75 million in City funding. And while we are extremely appreciative of the City's tremendous support over the past decade, financial and otherwise, in order to achieve our goal, and indeed, to remain competitive with other cities, our appropriation must grow. I am here to respectfully ask your consideration of an increase to the Cultural Fund in FY '04. In many ways, we are a victim of our own success. In ten years the number of grants we have awarded to Philadelphia's arts and cultural organizations has increased from 136 to 214 or 57 percent. Last year alone, the number of grant awards increased by eight percent, yet the fund's level of appropriation remained flat. As a result, several organizations witnessed a decrease in the amount of their grant, despite the fact that they received high marks from their peers. 00102 03/18/03 - Committee of the Whole This decline is particularly difficult for the smaller community based organizations that rely on hard to get general operating dollars to literally keep the lights on. To prevent further slippage among existing grantees, while allowing for an anticipated growth in the number of applicants, we estimate a needed budget increase of $250,000 just to stay even. It's worth taking a look at the big picture. 87 of municipal dollars per person on arts funding. 38 per person. 3 million. Additionally, the size of our grants is only 27 percent of the average grant size of these cities. We must remember that supporting 00103 03/18/03 - Committee of the Whole arts and culture can be a successful strategy for growing our overall economy. Philadelphia region's non-profit cultural sector directly employs 5500 full and part-time workers, supports an estimated $564 million in spending, and generates more than $16 million in State and local taxes. One grantee recently reported that they used their cultural fund grant to employ, quote, more Philadelphia based rather than out of state artists for our work with schools. Just think how arts and culture impacts the tourist industry. Ask yourself how could our tourism industry possibly flourish without the breadth of cultural experiences offered by institutions like the Academy of Natural Sciences or Freedom Theater or Flamenco Ole. And you may ask what the effect of the Cultural Fund is on property values in the City. A recent report, prepared for us by the Social Impact of the Arts Project at the University of Pennsylvania indicates that Philadelphia neighborhoods with a Cultural Fund 00104 03/18/03 - Committee of the Whole applicant present saw their property values increase nearly twice as fast as other neighborhoods between 1995 and 2000. Property values rose by just under $8,000 during the late 1990s in neighborhoods without a Cultural Fund applicant and nearly $18,000 in neighborhoods with a Cultural Fund plant. Just think what life would be like in our neighborhoods without the hundreds of arts and cultural organizations. Taller Puertorriqueno supported 25,000 residents in North Philadelphia. Samuel Fleisher Memorial, over 40,000 City residents. ARTREACH brings to the arts audience by distributing over 170,000 donated discount tickets from 125 cultural organizations.
Needless to say, the Philadelphia Culture Fund is helping to keep our children and youth off streets and engaged in positive activities. It's revitalizing commercial corridors, increasing property values, bringing families and neighborhoods together in ways that lift spirits and establish good will. 00105 03/18/03 - Committee of the Whole It's creating connections between otherwise disparate communities, who are finding common ground, often for the first time. Our Board consists of 6 extraordinarily committed people, including 10 7 members of the community, 4 members appointed by 8 the Mayor, and 5 Members of this City Council. 9 I wish to thank particularly our 10 Council representatives, Councilwoman Blondell 11 Reynolds Brown, Councilman Ortiz, Councilman 12 Cohen, and Councilman Rizzo, for their leadership 13 on behalf of the Cultural Fund and their support 14 for growing our budget. 15 And I'd like to thank our grantees, 16 many of whom are here today. They frequently 17 point to the Cultural Fund for providing a stable 18 source of unrestricted funds and providing the legitimacy that helps leverage additional dollars. I appreciate your time today and your consideration of our request. And any of us would be happy to answer any questions that you have.
Thank you. Miss Edmunds, are you testifying? 00106 03/18/03 - Committee of the Whole
Thank you. The Chair at this time recognizes Councilwoman Brown.
Thank you, Madam President. Good afternoon, ladies. Thank you for your testimony. Let me just put on the record, as I mentioned a couple of weeks ago, that I am absolutely committed to working with both my colleagues who sit on the Cultural Fund Board, namely Councilman Rizzo, Councilman Ortiz, and Councilman David Cohen, but other Members of City Council, too, who care very much about arts and culture, and to work with the Administration for us to come up with a number that does two things: Address the cost of living increase that hasn't happened for the past eight years; but more importantly, brings the Cultural Fund back to at least the FY '02 numbers, where we are no longer because of the increase in the number of our organizations that we're funding. So, my hope is that we can back into 00107 03/18/03 - Committee of the Whole a number that is, as I said, both reasonable and responsible, given where we are with the City's budget. And my colleague, Councilman David Cohen, will speak more eloquently on why none of us believe that that's enough. But given where we are, we have to work collectively to come up with something that's responsible. Speak to us, if you could, about how an opportunity exists for NTI and what that means, but more importantly, how we can look at artists' housing and vacant lots, and the like, and how we can use artists to bring back to life vacant land and that kind of thing, using the NTI as the opportunity to do that.
Well, I think any opportunity to enliven the City and enrich the City with art is certainly worth the investment. As you know, the Cultural Fund's mission is to provide general operating support for arts and culture groups, so we wouldn't find individual artists per se. But we certainly support any type of activities that would increase art throughout the City and give opportunities for 00108 03/18/03 - Committee of the Whole artists, whether it's living or creating art.
So you would see NTI as an opportunity. You make the clear distinction that we cannot fund individual artists.
Well, I was just going to speak as far as the NTI that you mentioned. I think there definitely is a place for artists and for arts organizations to work in collaboration with community development, community centers of all types. I believe that having the arts as part of the community is very important, so I do see a definite role there. The Culture Fund, specifically due to its mission is for general operating support for the arts and cultural institutions specifically, at least as I understand it. So that those very needed -- and especially in these times, more than ever -- just the funds to stay 00109 03/18/03 - Committee of the Whole afloat, to keep the doors open, to be able to provide the services that they're providing is really important as well, equally.
Okay. And I'm reminded by my staff that we expect to do the budget amendment, again, working with my colleagues on City Council. So we should put that on the record. Thank you very much. Thank you for your testimony. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilwoman Tasco.
Good afternoon. I just wanted to ask you... You all are doing a good job. It's a fun Board to be a part of. I was on the initial Board. We, when I was on the Board, had some discussion about how we fund small neighborhood cultural groups, for instance, the local dance group or the arts program at the rec center. Is that something that you have 00110 03/18/03 - Committee of the Whole considered lately doing? Or have you funded any of those groups? Or just what do they do for funding?
You'll have to pull the mike to you. We have old ears.
Anne Edmunds. I'm the manager of the Philadelphia Cultural Fund. Over the past three years, the Cultural Fund's Board and I have been reaching out in neighborhoods that do not have arts and Cultural programming. And what we have found is, the smaller organization -- many of these smaller organizations, particularly those that aren't connected to some of the social service organizations, they were not receiving funding in the early years. So that we have analyzed those particular organizations and we have made provisions. The grants are very small, but we 00111 03/18/03 - Committee of the Whole have made provisions, and we are currently in a planning process with our planning committee and we will be analyzing this -- you know, this topic further.
Do you have a pool of money set aside just for those small groups who don't meet the criteria of the larger organizations?
We don't have a pool of money set aside. But this year for Fiscal 2003 $100,000 supported small, very small organizations. We did provide at least $100,000 for those very small organizations.
Thank you, Madam President. I wanted to congratulate. I don't have a statement, but after waiting a dozen years, 00112 03/18/03 - Committee of the Whole that's why I have to keep running for office, because it takes the government a long time to do the right thing, particularly the government of the City of Philadelphia. Back more than a dozen years ago, we used to have a line item called the line item 500. That line item was for arts and culture, particularly for the very small community-based groups. It had grown to about seven and a half million dollars a year. And arts and culture at the community level was really prospering. It reached into every community. It was too much for the new Mayor, who at that time was Mayor Rendell. He had the vision of the Kimmell Center. He had no time, maybe because there were no campaign contributors in the local community. So he only had time for the big projects. And he engineered the destruction of class 500. And for the last dozen years I've been waiting and hoping for a reemergence of the strength of the arts and culture community, because in a very serious way you're the heart of Philadelphia. 00113 03/18/03 - Committee of the Whole Philadelphia is meaningful only to the extent it gives support to arts and culture, for the business reasons, and for the reasons that the art and culture speak about a City. They tell us the real life, the vibrancy that exists. And I like what you're doing. You're beginning to come back. I am a little distressed by the last answer that only approximately $100,000 -- Maybe my hearing piece was not working. Maybe the figure should have been higher. But we used to contribute at least $2 to $3 million a year to the small local community. Sometime the arts groups were two or three people. But that's how arts and culture emerge in the community. And that ought to be the basis of support. Let the rich people in Philadelphia support the Kimmell Center. They get enough in tax breaks. So they actually save money by making their contributions to the major cultural organizations. But what we need in Philadelphia is a healthy, a vibrant life of arts and culture in this City. 00114 03/18/03 - Committee of the Whole I think your goal of $5 million in five years is commendable. If I had my way, I'd be for it this year. I'd like to see about $4 million added this one year so that you begin to move really in a way that counts. The NTI program needs art and culture if it's to succeed. What's the point of cleaning streets, getting rid of cars, and having empty deserted neighborhoods? You've got to have a real life in the community. And you can't have a real life unless you have arts and culture supporting the life and telling the people about the kind of life people live in the neighborhood. That's what builds community participation and the political local life of the City and gives people a stake in the City. What you're doing is extremely important. I commend you in coming forward this far. And now I'm hoping, and I'm hoping that whatever bill is being offered, it's not nearly enough. And if you make enough noise and keep making the noise and make it loud and don't 00115 03/18/03 - Committee of the Whole worry about doing it just in an orderly way, because if you want attention you've got to attract attention. If you don't have confidence enough to be disorderly sometimes, you're going to be treated like the bad student in a classroom. You'll get punished and you'll get maybe reward of a single apple. But if you act out how important you really feel this issue is, I think the road to success is going to come much quicker than you think, and we're going to restore a commitment by the people of Philadelphia to the Arts and Cultural Fund. Congratulations. The amount that you ought to raise this year -- In my judgment you ought not to raise it by a measly low $200,000.
God, it doesn't even begin to be above one-hundredth of what the lawyers and the Pension Fund case made, as reported yesterday. )
Why are we so modest, $200,000? You know, the City of Philadelphia Budget, the real budget, isn't what 00116 03/18/03 - Committee of the Whole we talk about, a General Fund Budget. We talk about a General Fund Budget when we don't want people to know what the real Budget of the City is. But the City's a giant corporation, which spends money that comes from taxpayers. But sometimes it comes through the Federal, sometimes through the State Government, as well as through the local government. And it's the business of a minimum of $5 billion a year. What's $200,000 in a budget of $5 billion a year? My feeling is that this $200,000 ought to, at least this one year, to be changed to a million dollars. And I intend to form an amendment to try to produce that result. With your full participation, I think we can achieve it. Let's not talk about being responsible at a time when we learn that the City Administration was loaded with these SUV cars. Please notice, City Council didn't have any. Thacher Longstreth was reported in the press as getting one, but he got it through the Mayor's Office, not through City Council. 00117 03/18/03 - Committee of the Whole Because we really are conscious of the need for money, and we want to use the money for the good purposes, not the SUVs, but for arts and culture So, good luck; and keep pressing as hard as you can because I think you're on the road to victory on this issue. Thank you very much. (Applause and cheers.)
Thank you, Madam President. First I'd like to thank the panel who are sitting here today. As an original Member of the Cultural Fund when it was first established a number of years ago, worked very closely with the people at the table and many of the people in the room. And the thing that I'm the most proud of, when it comes to what the Cultural Fund has been able to accomplish, is that all the grants are awarded and continue to be awarded on merit. You remember the days when Council was dealing with Class 500 and other things that 00118 03/18/03 - Committee of the Whole brought some embarrassment to the Chamber. The thing that was the most important, I think, in this Cultural Fund operation is that all of the panels that are put together are headed and sat and represented by professionals in the particular disciplines they are judging. There's no political influence. " They have to go before the panels. They have to perform, show what they're doing, live up to a certain standard. And the panels, their own peers decide who gets the money and how much. We even have an appeal process. When people are not happy with the amount of money they receive, they can go back in and appeal directly to the Board. This is perhaps, in the City of Philadelphia, the only truly merit selection process that exists for the award of money. And I'm very proud that it never changed from the time we first started till today. And I commend the Board Members from Council who are here today 00119 03/18/03 - Committee of the Whole sitting currently on the Board, that none of this has ever changed, that no one, whether they've gotten a grant or have not gotten a grant or not gotten as much as they thought, ever felt that they were treated in a politically biased way. It was all about the merit of the program and the merit of the arts and entertainment value that that group brings to the City. So, I echo Councilman Cohen's words in that regard, that it is truly a program that helps benefits arts in the neighborhood communities. It deals with the orchestra and the ballet and the other big arts groups, but it also deals with Painted Bride and the Fabric Workshop and the Point Breeze Arts and Cultural Center and all the other opportunities in the neighborhood. The one thing that's important for the audience to understand as Councilman Cohen said earlier, this is not rocket science. You need nine votes to amend the Budget, to include $650,000, $750,000, $1 million. Whatever the members of Council decide that they want to increase the Cultural Fund Budget to, we have the ability and the 00120 03/18/03 - Committee of the Whole authority and the ability to vote to do it. Don't make any mistake. Don't, you know, think that there's some magic formula or some magic potion to this. Nine Members of Council voting together, on an amendment to this Budget, can put $650,000 or $1 million or whatever it is we decide we would like to do, back into or additional to the Cultural Fund. And I'm willing to make that pledge today that I will vote for whatever the Members of Council as a group, as a whole, a majority of them decide. If it's $650,000, I'll commit my vote today to $650,000. If it's a million, I'll commit my vote today to an amendment to this Budget to make it a million dollars. But I also think it's important that Council stand up and do what's right. In this regard, Councilman Cohen is right: There is money available. This is a pittance, compared to what other monies get spent in this City. And I am willing to pledge my vote today to $650,000, which was originally requested, or to a higher number, if that's what the Members 00121 03/18/03 - Committee of the Whole of Council deem appropriate. The Budget then goes on to the Mayor's Office, and it's not in our hands any longer, but we will have done our job in reinforcing the act that neighborhood arts and culture is important in this City.
I've always remembered the story, and I tell it a lot: When we talked about the discussion of building stadiums, which I supported and I think something that the City needs and the region needs. But if you think about it, the Cezanne Exhibit in Philadelphia generated more tax dollars and more income than the Flyers, Sixers, Phillies and Eagles put together for that entire season. One art exhibit of Cezanne that appeared, I think, in London, Berlin, and Philadelphia, brought more tax ratables, tax generated revenue to this City than the four sports teams combined. So I think that's a message that people should not forget. And again, I will reiterate my pledge to my vote to a $650,000 increase or more if eight other Members of Council decide that 00122 03/18/03 - Committee of the Whole that's appropriate. And I thank you for coming in and expressing your views. Thank you.
Thank you, Madam Chair. I agree with both of my colleagues, in terms of what they have said about money. And we have to remember that a few years ago what was then the Cultural Fund which was the 500 area of the Budget was around $5 to $6 million. When we created the Cultural Fund because of a few of the problems that Councilman Kenney spoke about, we really cut it down and underfunded it. And I think that the reality of it is that arts brings revenue and stabilizes neighborhoods. You look at the Taller Puertorriqueno, you look at Ambler, you look at 00123 03/18/03 - Committee of the Whole two institutions that have gone into a neighborhood that has all sorts of names and sobriquets, and they represent the soul, the heart of the barrios. And they have stabilized that neighborhood and brought in other art galleries that are now establishing themselves, other restaurants that now are establishing themselves around that area. You take up Point Breeze, for example, and the same thing happened. It was a little nook of a thing when it was -- when it was -- when it started. And through the funding of the City, it has grown to be one of the major art institutions that we have in the City. The other day at the Board meeting we talked about Manyunk and that small little grouping of people. And all they needed was $2,000. And we reviewed that. And $2,000 to a group like this can make a huge difference, in terms of what they bring to that neighborhood. We underfund the Cultural Fund. The results of money that we invest in the Cultural Fund are immeasurable. And I believe that we are 00124 03/18/03 - Committee of the Whole going to discuss this very heavily, and we are going to -- we are going to increase the Cultural Fund by a great deal of money, maybe not $5 million, but we're going to -- we're going to make some significant change in the funding. And we're committed to that in this budget. (Applause.)
Thank you, Madam Chair. President Goldenberg, welcome back to City Council, in a slightly different capacity. I appreciate your testimony. I wanted to know from... I have the testimony from Miss Amsterdam, and then I have this other document that's entitled The Philadelphia Cultural Fund. And it's an analysis and it's a fact sheet, although it does not indicate who developed this. Is this from the City Rep's Office?
Okay. What I 00125 03/18/03 - Committee of the Whole wanted to know was, on of that document, the eight-City... I just want to make sure I'm keeping track of the cities. You have the document handy?
Under the section it talks about comparable cities, you talk about the eight largest cities in the United States, and then it's not including New York. And of the ten largest cities, what's the other City that's not...
Chicago and Los Angeles are not in there. Chicago and Los Angeles.
The number -- the cities -- There's a footnote at the bottom that the cities include L.A., Chicago, Houston, Philadelphia, Phoenix, San Diego, Dallas, and San Antonio.
Okay. All right. So the two cities that are not in there are actually New York and Detroit, right? 00126 03/18/03 - Committee of the Whole
New York. And we're also are not doing anything with regard to Detroit.
Right? Okay. And could you develop for us... These statistics are, I think, quite compelling and important. The next paragraph you talk about the six largest cities that have similar grant-making programs to Philadelphia. Could you develop for us a chart that would show all of those other cities? You make specific reference to San Diego, and what they provide in terms of grant dollars. But I'd like to see all the cities in rank order and the amount...
...that they provide. And your document says that we rank, again, second to last at $1.75 million. Who is actually last?