Could you point to where that is? What was the serious wage tax reduction?
Councilman DiCicco, I know that you're very well read so you have it. I didn't bring it with me, however.
I didn't bring it with me, 418 4/8/02 - WHOLE - TAX REDUCTION BILLS but the point is that it's not incremental. But in the short period that I've been here, people have said this is a little beginning and we're going to do more and more. And I just want to make sure that kids have decent schools to go to, that they get the kind of support to get there that know they need, that there are child care programs, that we find a way to get rid of the lead in kids' houses. This Council has been trying to do. We need to do it more. And I don't want to start taking away from the pot before we're sure we can do that.
Unless more there are jobs for people to pay a wage tax, whatever that tax number, is and contribute to that pot so that we can do some of the things that your talking about. You can't just take the money and let that pot -- eventually you're going to get to the bottom of the pot. Who will be left to pay the bill? There's no 20 such thing as a free lunch. So job creation, in my opinion -- and I don't know where you got the number. I wish you were correct that wage tax reduction would create a hundred thousand jobs.
I would hope that 419 4/8/02 - WHOLE - TAX REDUCTION BILLS that were true.
Councilman, I don't believe that Bill NO. 92 do that.
I certainly don't want you or anyone else to think that that's what we're suggesting. I'm not going to continue to debate. We all want good schools. We may disagree from time to time on how to get there. But we're talking about the potential for job creation. At the very least, I would hope that it will stabilize the jobs that we have today going forward. And all the economists agree, including the nine members of the Mayor's Task Force on Tax Reform have all said the wage tax is the most important thing we can do going forward in terms of creating an environment that will hopefully create an environment to create jobs. They're not suggesting that if we do it that those jobs will come. I'm not suggesting that. But if we don't do it, history has proven, that we will continue to lose jobs for a variety of reasons, one of which, probably is at the top of the list is the cost of doing business in Philadelphia. I think 420 4/8/02 - WHOLE - TAX REDUCTION BILLS it's very simple. And I did have a partial solution to your transportation needs for public school students, but we don't want to talk about those do we? Thank you.
Thank you both very much. Are there any other questions or comments from Members of the Committee. Thank you very much. Our next.
My name is Kenneth Kaiserman. I'm president of the Kaiserman Company. We own and operation buildings in and around Philadelphia. I have always regarded working in the City as a privilege, but given the expenses entailed, has come to be more of a luxury. In view of all the costs, it is a luxury to maintain the City residents with high property taxes, endure high utility rates, send our children to good schools, run businesses where we pay use and occupancy, business privilege, and contribute to the wage tax. 421 4/8/02 - WHOLE - TAX REDUCTION BILLS As building owners with property inside and out of the City, we get tenants coming and going. Unfortunately, in Philadelphia, they are mostly going. It seldom seems to flow the other way. Once they move out of town, it's difficult, if not impossible, to get them back. For instance, from our Rittenhouse Square apartments, affluent individuals are choosing to move out to the suburbs where they will not be encumbered with the same tax burdens. From our office buildings, successful growing businesses are relocating to the suburbs where they will not have to compensate employees for the bite that the City takes out of their salaries. These companies will expand and add new employees, but the bulk of these employees will no longer be Philadelphia residents nor will they be contributing to our tax base. Ironically, most of these companies and most of these individuals would rather be in Philadelphia if they could afford it. They like the diversity and cultural opportunities that we have to offer here. So clearly what we are doing is counter productive. We are rejecting productive citizens and shrinking our tax base. I worry, too, that as our population 422 4/8/02 - WHOLE - TAX REDUCTION BILLS declines, we may cease to be a first-class City under Pennsylvania law. That could have serious repercussions for our ability to control our destiny. Philadelphia must learn to be competitive not only with surrounding counties, but with other major cities. We remain among the most expensive cities for doing business in the country. And if we're one of the costly in the country, then that would make us among the most expensive in the world. Is that the kind of reputation this City needs? We're all here because we want to see Philadelphia grow and prosper. Tax reform and reducing the wage tax are key to achieving that goal. In closing, I'd like to thank City Council for stepping forward on this issue. It seems that we always find the money for things that are important to us. We should be able to find a way to put more money in the pockets of our citizens. Thank you.
Thank you, Mr. Kaiserman. There are a number of bills that are 423 4/8/02 - WHOLE - TAX REDUCTION BILLS scheduled for the public hearing today. Can you tell me which bill or bills you are testifying in favor of.
Well, I'm speaking mostly about 92. I'm not sure what other bills are in question.
Thank you very much. Are there any questions from members of the committee of Mr. Kaiserman? Thank you very much, sir. Our next witness.
I'm Ed Schwartz. I'm here from the Institute for the Study of Civic Values. And as tiring as it has been to sit here through the day, there is a kind of advantage in testifying when they're only a few people around, and I'm looking at people I've known for a long time, because I'm going to say some things that I probably wouldn't have said in the larger room just 424 4/8/02 - WHOLE - TAX REDUCTION BILLS to you. I have done as much work on the budge and this set of issues over the last month that I used to do when I was here. And those of you who were here when I was know that I was in my chair every day for hours, for weeks. And I guess what's alarmed me as much than any particular proposal is the quality of the discussion around it in the public arena appalling, which I've considered to be appalling. I really don't know how anybody could possibly make a decent decision about what to do based on the things, for example, that have appeared in the Daily News on a day-to-day basis. I'm going to go through my testimony because it reflects a dimension of the Economy League report which I found quite interesting that surprised me and then I worked through and it puts this whole proposal in a very different light. But let me just say that part of the problem we have right now is there's a specific bill before Council that is very narrow and modest in its pretensions in terms of how much it cuts from the wage tax and how much revenue. But the engine driving the movement, in fact, has been created by the larger proposals 425 4/8/02 - WHOLE - TAX REDUCTION BILLS that in fact are embodied in the Economy Leagues recommendations that are also now reflected in the legislation that Senator Fumo introduced in Harrisburg which exactly corresponds to the goal that the Economy League set and is, in fact, the basis for the Daily News a few weeks, the Editorial Board saying, "Gee, we agree this little picking at the wage tax is no longer really useful. " So people are marching on behalf this massive change, in fact, in connection with a bill that doesn't do it. But then it's important to understand what the massive change is supposed to look like, and that's what my testimony addressed. I wanted to make one added comment about where is the money. On April 3 the Daily News attacking the Philadelphia wage tax. There appeared a plea from a man named Scott Franklin who wrote simply, "My real estate tax went up 40 percent. " I decided to call Mr. Franklin over the weekend to check out what had happened to him. He turns out to be a man in his 80s living in a modest home near East Falls. 8 percent increase. This would be a modest burden for many of us, but Mr. Franklin is neither poor enough to qualify for the senior citizen exemption nor rich enough to take this lightly. And needless to say, he pays no City wage tax. So why do I raise Mr. Franklin's plight in a hearing about reducing the City wage tax? The answer spilled out in the Pennsylvania Economy League analysis of Philadelphia tax breaks and they're relationship to tax basis and tax revenues is that if we choose to pursue economic development in this way, lowering the wage tax in the hope we can lure upper and middle class professionals back into Center City buildings, then the result will be a sizable increase in property values resulting in assessment increases that will more than wipe out any savings that we in Philadelphia might hope to get from a lower wage tax. This is not a campaign to reduce the tax burden on the people of Philadelphia. It is in effect, a campaign to shift the tax burden from the wage tax to the real estate tax and then ask City Council face the harsh choice of either cutting the budget again because we will 427 4/8/02 - WHOLE - TAX REDUCTION BILLS need to cut it when we reduce the wage tax, or put up with whopping assessment hikes on those least able to afford them. Does this come as a surprise to you? It certainly surprised me.
I stumbled on it, really, trying to figure out how the supply side process was supposed to work. The Economy League press release describing their report in proclaims that the 3 percent tax between the city and suburban rate, the most aggressive scenario explored will actually bring in more revenues by 2006, thanks to their positive effect on the City's economy. And what much of this positive effect that would actually bring in more tax revenues by 2006 turn out to be higher real estate tax assessments. It turns out that nearly one-half of the increased revenues projected to result from the supply side effect are from higher real estate values. So if the wage tax is cut by percent for city residents, real estate revenues in this model rise by percent in just 22 two years and then by 40 percent by 2007. What we 23 have here are the makings of a 40 percent increase 24 in real estate tax assessments over the next five 25 years. A person earning $40,000 a year with a home 428 4/8/02 - WHOLE - TAX REDUCTION BILLS valued at 100,000 assessed at 32,000 would end up saving $339 in their wage tax perhaps, but pay $992 in higher real estate taxes. And for the thousands of people over 65 in the City, people like Scott Franklin were not poor enough for the elderly exception but who no longer work, all they will see are more assessment increases without lower wage tax to soften the blow. And I have a page there you can go through. This is in fact boasted by the Economy League as good thing for the City to raise these property taxes. Even the Economy League analysts express doubt that you in City Council will accept this outcome. The increase in property tax revenue from the increased value in properties is unlikely to be politically feasible, they write, it would simply imply large increases in property taxes by Philadelphia property owners, many of whom have little ability to pay the increased property taxes resulting from the higher values of their properties. This is from their report. But if Council does find a way around what would amount to illegally mandated assessment increases by lowering the real estate tax its, then 429 4/8/02 - WHOLE - TAX REDUCTION BILLS what happens to the supply side effect? Half of it is gone. Jonathan Saidel this past week led off his latest list of potential savings and revenue enhancements associated with tax reform with $235 million in supply side effects. And the Daily News continues to publish these we-can-do-it lists based on information of that kind. Of course, the specific bill that City Council is taking most seriously is a lot more modest. 35 percent over the next four years. 5 percent. 13 percent, then you have to have a 6 percent increase in the wage base the next year. So the realistic schedule here is the one that exists without the added unrealistic wage tax growth. But now we face another conundrum. The 430 4/8/02 - WHOLE - TAX REDUCTION BILLS leadership report issued last year and now the Pennsylvania Economy League insists that only if we reduce the wage tax to a blended rate of 3 percent will we receive the economic benefits that tax reduction is supposed to bring to us. The editors of the Daily News came to the same conclusion. Only a dramatic cut in the wage tax makes economic sense. So what is reducing the City's revenues by $30 million a year supposed to accomplish? Another symbolic gesture? 5385 percent wage tax today is going to persuade them to join us in Philadelphia? A $50,000 a year professional will be saving $94 in four years under the current bill before Council; that's all. Does that sound like an incentive to you? Yet even this modest plan plus that $30 million every year. And I have to add here, I am just staggered at how blindly people hear three $30 million. I administered a budget and came here every year that had $50 million, that's all.
And out of that $50 million, we had to figure out a way 431 4/8/02 - WHOLE - TAX REDUCTION BILLS to deal with a problem for $2 billion. So you'll excuse me if after leaving the government for a few years, $30 million doesn't seem so trivial to me. It does happen to be equivalent to the entire Streets Department budget, it's 50 percent than the entire budget of L & I, and double the budget of Fairmount Park. So whether you can save it or not is another question. It is not small change. And even if we could find ways to save this sort of money for other sources, does sending it back in tiny increments really make more economic sense than applying it to work force development or improve security on neighborhood retail corridors or sustained City-wide effort to help people in businesses, another example, access the Internet. Here's another little item that came to my attention. Yahoo, the Internet service and magazine came out with its annual 50 Wired Cities Report this week. Philadelphia as not even on the list; 50 cities, we're not even on the list. Every other City there in the top five, New York, Los Angeles, Chicago, and Houston on the list. Mobile, Alabama, on that list. Philadelphia was not on that list. Somehow I think that that has far more to do 432 4/8/02 - WHOLE - TAX REDUCTION BILLS with our continuing economic difficulties and decline than the wage tax or anything having to do with taxation. My point is and it was the point just made by the gentleman for the Center for Budget Priorities, that just as welfare recipients now forced to work, many of them face multiple barriers to employment. So Philadelphia faces multiple barriers to economic recovery. And incremental cuts in the wage tax don't address any of them, including the wage tax itself, as a sizable body of evidence suggest. So what should we do about the wage tax and our entire tax structure for that matter? I agree it's a mess. I spent my first three years in Philadelphia back in the 1970s organizing a group called the TEA Party, Tax Equity for America, to address many of the issues that you're talking about here today. We were fighting for fairer property tax assessments and a graduated state income tax, levied in accordance with people's ability pay. The first time I testified here at City Council was on behalf of the TEA Party. George Schwartz was president at that point. We had an 433 4/8/02 - WHOLE - TAX REDUCTION BILLS exchange. '" And that began an exchange between me and George Schwartz that continued for the rest of the decade, for the TEA party. And I'll add one other little point since we're a smaller group. You may recall nine years ago I walked to Harrisburg on behalf of housing, some of you may remember that. That was the second time I did that. In fact, the idea for it came from what I did in 1975. I walked to Harrisburg with petitions for a graduated state tax. So you'll excuse me if some of you who are now really interested in tax reform, you know, my understanding of that is not quite as enthusiastic as it might have been because, you see, I did that issue for three years. And what I learned after that was following, which is very much true to what goes on right now. The only people really interested in what they call tax reform are people who want lower taxes. The people who are interested in government spending in programs, 434 4/8/02 - WHOLE - TAX REDUCTION BILLS they're not here day. Shell is the only one. But by and large they're not here today. They're out in those neighborhoods and they're mad at the lack of services and they don't know what to make of the tax structure. And then tax issues get raised about four months before taxes are due or a budget is due and there's enormous interest in them for about three months. And the budget is passed and the taxes are decided for that moment and everybody goes home. And I've seen it happened here. The land tax, Betsy Reveil (ph) came in here and proposed a land tax one year.
Great interest in it. Budget was passed; nothing was done. And so after a while you decide that's not really useful place to spend your time. And I gave up the TEA Party and started working on behalf of the neighboring groups. But if we want to deal with the wage tax, the serious problem that has been raised by speaker after speaker today, then my advice is that a group of people of the kind that are high level at all levels of government in the private sector, decide in some form, whether it's a formal commission or something less formal than that, to 435 4/8/02 - WHOLE - TAX REDUCTION BILLS sit down with serious goals and set a timetable for a proposal that would come to this Council in the next year when you're all running for re-election or election or whatever about how to deal with this whole problem. And I did not believe that you can solve this problem simply in the City. I think it does have to involve state help when Governor Casey, the older Governor Casey or late Governor Casey tried a state tax reform that included some help to the wage tax, you can bet I got on the phone to try to be helpful to that initiative. We will have a new Governor in Harrisburg in January perhaps friendlier to the City. Every major serious progress that has been done in Philadelphia from the tourism economy to getting us out of the budget crisis when we needed to, have been done with groups of people like that who overcame whatever political differences they had and philosophical differences and got down and did some hard work. And I certainly think that all that has happened here justifies that. I want to conclude in saying comments on two matters of great importance, first to the immediate consideration and then to the larger one 436 4/8/02 - WHOLE - TAX REDUCTION BILLS that have occurred to me through the day. One has to do with the fact that in terms of the debate over whether we can afford to lower the wage tax, there is a huge perception here that somewhere along the way there's all this money. And I have spent the last two or three weeks, as I did here, going through every single recommendation that popped up to save money. At some point before some of them appeared in the newspaper, some people in Controller Saidel's office pointed to an end place in his report where there were suggestions for savings. I looked at all of them. And I did ask the City what their response was. And I have to say as I would if I were a Councilperson asking a witness, their responses were credible. And one by one like disappearing ink, the suggestions to save money disappeared. I also, on the side, have taken an interesting look at some things that the Administration cannot say, but I can. This Administration has budgeted zero for wage increases for employees starting in 2005. Now, they can't sit up here and tell you that that's what they -- that they've got some number in their head. But it 437 4/8/02 - WHOLE - TAX REDUCTION BILLS doesn't require a lot of speculation to say that maybe given that the wage increase in the past few years has been 3 percent that maybe that's the ballpark we're looking at. Well, if you multiply 3 percent of those budgets in the out years, presto you're dealing a with $150 million right there. The other item that's really fascinating to me as a member of the Chamber of Commerce is that the City of Philadelphia is only spending an increase of 9 percent a year for its health coverage. Well, I'll tell you something. The Chamber of Commerce's health Blue Cross plan went up percent this year, and it went up 14 percent last 15 year. We're getting killed. My wife's 16 organization, Philadelphia Fight, is also in that 17 plan. I wanted to be sure it just wasn't Charlie 18 Pizzi got mad at me and the institute got screwed. Maybe he got mad at both of us. But it's actually City-wide.
Now, everybody says the City's health benefits are completely out of line, but they're budgeting 9 percent increase and we just got an 18 percent increase. So if you split the difference, there's arbitration going on with police and fire in 438 4/8/02 - WHOLE - TAX REDUCTION BILLS post-911 America. Do you think that the arbitrators are going to look at police and fire fighters and start trying to sock it to them. So let's say that the health increase goes to or percent. 6 You've suddenly eaten up a couple of hundred, 200 to 7 300 million just in those two items alone. 8 So, you see, when I was here, I used the 9 due diligence with the folks and ask what's going 10 on. And I wasn't political. I did things that even 11 though I was an ally of the Goode administration, 12 the very first issue I raised here was the fact that 13 they promised to hire 300 police officers and they only hired 130. That was the first issue I raised from this floor. I just tried to take the truth where it lead me and that's what I've tried to do here. And I have to say, I have not yet seen one item that has been listed in the newspapers as representing a huge savings that we can make that has had any credibility at all. That doesn't mean they're not there, but I haven't found one yet. And if they're not, then what the Administration is saying about a tight budget and real hard choices between one thing or another is true. And frankly, I lived here for two years when in justifying 439 4/8/02 - WHOLE - TAX REDUCTION BILLS increased spending we decided there were know hard can choices. And I then went over to the Mayor's side. And when I went to the Mayor's side, Charlie McPherson came to the first meeting I chaired of a committee to, in fact, develop Wilson Goode's agenda. " And having sat here on this council and asked thousands of hours of questions, I was shocked, I had no idea. But it turned out that what the City had done, which we didn't know, was to take a $56 million cash allegation from debt refinancing and apply it all to one year. And so that next year we had to eat $56 million. And for the next three years the Mayor and Council come not together on a budget. In the end, we had catastrophe. Now, that happened by over-spending. The Reagan administration shows you it could happen through supply side, economics. Deciding that the projected gains in economic growth and development will somehow offset revenues that you're losing now. So don't think that lousy standards in budgeting can never happened here. This is where we've been. So I do believe that all of this 440 4/8/02 - WHOLE - TAX REDUCTION BILLS testimony suggests that we need to take a very careful look at the whole tax structure and understand the relationship so that we do things with the wage, we're going to do things with real estate tax assessments and they're all related to our economic strategy. But I would do it right. I'd spend a year and really look at it and come back with a proposal with the State and the private sector and both levels of government and all that on board and try to do it that way. The one thing that in fact that has really come home to me today -- and this is where I will conclude. Is that also what's gone on here is in a sense a new dimension to what we see as the economic future to the City. It wasn't the wage tax that killed Philadelphia. It was the decline of manufacturing jobs, losing over 300,000 manufacturing jobs. I mean, in fact, you have to listen to this today, you know, it's almost taking leave of your senses. It's like somebody put a veil over you to cloud your perception of what really happened. When I came to Philadelphia in 1973, the buy watch of that decade was that factory jobs were closing, they were going to Latin America, they were 441 4/8/02 - WHOLE - TAX REDUCTION BILLS going south. I worked for Amalgamated Clothing Workers on a boycott because of the undercutting of the garment trades by southern employers.
Those were the big issues that had to do with the decline of cities. This is not some obscure piece of information. Frankly, there was a study of manufacturing done in the mid-1970s that I used in the economic development report that I issued from here. And I've got to tell you that taxes in that survey was very low on the list of why employers said they were going under or leaving. But they were. And the question then was what would we do. And so in the late 1970s a group of economic develop planners in and out of government got together and started the process of the Gallery, the Center City rail connection and the Convention Center. And the premise was that Philadelphia would rebuild Center City around tourism. And the only exception to that line of development was Bill Rouse (ph) who walked in here and said "I'm going to build a building bigger than Billy Penn's hat. And then there was an outcry. Councilman Street and I and some others supported that. And that did lead to a state of 442 4/8/02 - WHOLE - TAX REDUCTION BILLS office construction, but that was initiated by the private sector. In the 1990s, you tell me what exactly was done in any systematic or coherent way to structure a plan or a tact for office development. I have don't know of anything like that. It was no conversation of that. It was all about tourism. And isn't it interesting, it's like a controlled experiment because we spend all this public energy and money on tourism and presto, we got a lot of new jobs in tourism. We didn't do anything on office construction except this little incremental drop in the wage tax. That's all we did. " Maybe we ought to look at the fact that you just don't get office development by tiny little increments in the wage tax. But -- and this is where I'm going to end my comments -- I am persuaded today by hearing all the folks who were there that in fact if we are going to get these offices back, dealing with the wage tax is obviously a serious obstacle. It represents, therefore, a new dimension in what we're 443 4/8/02 - WHOLE - TAX REDUCTION BILLS trying to do for economic development and dealing with the wage tax is obviously an important part of what we need to do. That's what I've heard today. And frankly, the situation with this building outside the City that wants to come in here, that has more reality to me the thousand jobs and all of that than some of the things that are being touted as the reason. So if we're going to do that, again, let's do it right. Is this tiny little cut going to make the difference in that building coming there? I do understand there's symbolism here. The comments that Janice Davis this morning made were right on target. When Ed Rendell decided to reduce the wage tax, it was sending a powerful message that this City was taking control of its fiscal life as it has not been able to do. That was far more important than any economic gain or loss. And I had misgivings about it economically. I don't see how you say the 1990s were a fiscal success when we reduced the wage tax by so much that we ended up in the kind of situation with the schools that we had and we had to finance through a bond issue, stuff that if we had had the hundred million more dollars in the budget, we might have been able to handle in 444 4/8/02 - WHOLE - TAX REDUCTION BILLS the General Fund. I simply do not believe that the economic growth that we experienced is because of the wage tax, and the percentages of so-called supply-side growth that are listed in the Economy League report wouldn't remotely have created that number of jobs by themselves. That's now the authority on what supply side does, you can't attribute the growth. I think it's far more to do with the fact that we built a Convention Center and made tourism work than anything else, because that's what the data shows. But fine. If it's now necessary to try to build offices and to weight the difference, then let's look more carefully at what really is involved here.
And throwing $30 million away, that to me is not small change. And if somebody who says there's all this fat in the bowels of his government, I think Councilman Kenney used, I must say I've spent as much time at every part of this government's anatomy and I know where there's money, but they're not secret. It has to do with the amount we pay our employees and the benefits, that's where the money is, that's where the savings were that Ed Rendell was able to make. There is not some huge pot of money under the Municipal Services 445 4/8/02 - WHOLE - TAX REDUCTION BILLS Building or whatever is now passing for it. And if you believe that there is, then I think in fact you owe it to the public to start announcing what your own list is. I'd like to hear it as a citizen at this point. Because I'll tell you, I've looked at every single proposal that says there's all this money, and I don't think they're worth the paper that they're written on. They're nonsense. And so in the context of that, then I say as the Administration does, there are real hard choices to be made. " And for the last three years they've had cars removed from blocks, they've had lots cleaned, they've been able to got L & I to demolish buildings even before NTI, and the few times we've had snow they've been able to get side streets snow cleared. People like that. And, yeah, it cost more money. I began to worry because I was here when we were all spending and I began to wonder, God, are we going to bust the budget? So people like that. And I think that we need to hold on to that or we're going to lose those folks that we've got here in the hope that maybe 446 4/8/02 - WHOLE - TAX REDUCTION BILLS some new group will replace them. I don't think so. Again, I appreciate the opportunity to share these thoughts with you this evening.
Thank you very much. Are there any questions or comments from Members of the Committee? Seeing none, I thank you. Thank you very much. I would ask Mr. McPherson to please call our witnesses.
Good evening. Please identify yourself for the record and proceed with your testimony.
My name is Josh Sevin. I am a community and economic consultant and resident of Philadelphia. I'm here also as an executive committee member for a group called Young Involved Philadelphia. It's a grass roots organization that aims to engage and inform young Philadelphians about key matters facing the City. And I am really not pleased that I got here a little late so I have to 447 4/8/02 - WHOLE - TAX REDUCTION BILLS follow Ed Schwartz but will do it.
This morning, depending on when you got into Council, there was a caravan of moving trucks that circled City Hall. Those were members of Young Involved Philadelphia making a statement about their concern about the wage tax especially around allegations that certainly have been dissipated today that it's only a few people in the business community and a few newspaper editors who really care about this issue. The trucks were not meant as a kind of threat. It wasn't those kinds of signs on the trucks. " We wish it were that simple because we all the reality is that a huge number of those trucks to the tune of about 80 people a day are leaving this City and with that their tax dollars and that's a major concern for us. I'm just going to kind of go over a little bit of the Young Philadelphians' perspective on why this is such an important issue. I think a couple of the points on it have been -- you folks have heard again and again and again that for 448 4/8/02 - WHOLE - TAX REDUCTION BILLS highly mobile jobs and highly mobile people, starting up careers and families, the wage tax is a very serious issue. But moreover at a time when the City is so focused on the issue of brain drain that it's major issues there, too. But at the end of a very long day I actually want to mention something that I'm hoping no one's brought up at all today, that that's faith because in all the attempts to retain these recent graduates and young professionals, there's a lot about marketing the urban playground and the Kimmel Center and Old City and the like, but young Philadelphians want a lot more than that. They want a City that they can believe in and a belief that City Hall can really act and move on key issues and there's no doubt that if Council can muster the political will to actually act on this issue, it will instill a huge amount of hope and faith in young and old Philadelphians alike because it's been 60 years. I wanted to mention also what young adults who have fresh eyes into the political process, what they've been seeing around the wage tax debate. They've seen a coalition of civic and 449 4/8/02 - WHOLE - TAX REDUCTION BILLS business groups including some pretty strange bedfellows come together and express strong vocal concerns for an issue that crucial to the long-term health of the City and they've witnessed really high volume and relatively high quality of public debate over a complex issue and they've seen some admirable political leadership from members of this Council. But novices to Philadelphia politics also have seen some taxing behavior amidst this healthy debate. Personal attacks and name-calling, thoughtful and dedicated analyst on both sides of the issue alleging scare tactics and junk. It makes for lively political theater if you're into that kind of thing. But if you're young or old Philadelphian and earnest about the future of this City, it's more than a little troubling. I start off my morning affixing signs to some U-Haul trucks because I wanted to make a statement about a concern about a key issue of the City and then I got here throughout the day and say a cacophony of signs, everybody with their slogans. And we know this is a tough issue. You guys have such a hard job to sort through revenues and expenditures to do this budget. " My concern is even among a lot of these elected officials that kind of sloganeering has been going on through press conferences. And I would wage that on both sides. Opportunities like this -- I don't know, when does a tax revolt like this come around in Philadelphia, every 10, years? Then 10 next time it comes along, most of you probably, 11 well, maybe won't even be on this body anymore. So 12 I think it's all the more important -- I feel this 13 kind of urgency to really seize this moment, seize 14 this opportunity and not 2pass up the chance right 15 there.
The main points of contention, as I really follow this issue, seem to be this stuff about how much money is really available in our budget and how much more we can streamline City Government while maintaining services. You guys have grilled and grilled and grilled the experts on this. But I really thing with all that grilling and the various factions are digging in and firing numbers back and forth at each other, this really remains just an issue of priorities and political 451 4/8/02 - WHOLE - TAX REDUCTION BILLS will. There's been a lot of showing of political and there will continue to be so. The priorities really is a lot more tough. I'm a city planner. When I studied city planning, I was away from Philadelphia and studied this wage tax and kind of got fired up about how important it was and I kind of will do whatever I can as a citizen to try to move us toward a day it's not this albatross around our necks. But I really understand where the Mayor is coming from in terms of his focus on the gross receipts tax and the concern about we're just dinking around with this wage tax. But what's going on right now is kind of giving you guys some back-up from the public to actually go a little beyond. This brings me to kind of my second point beyond faith. Well, it kind of build of faith. I think an action that would really blow people away is that if among the posturing or the slinging that's been going on, if this Council could somehow convene together the folks in Finance, in PICA, in the Controller's Office and all the people here who really get te ins and outs of this budget, because for the public that's concerned about this 452 4/8/02 - WHOLE - TAX REDUCTION BILLS tax ain't gonna get every piece of how it functions, that's for sure. But to actually have, whether it's mediated or not, a consensus-building process goes beyond what we're talking about right now is symbolic, it's saying that we're moving in the right direction with the wage tax. But insofar as we have this moment now, why not get all these great people together in one room and say, Go wild, think about how you can get to 3 percent. And my suggestion isn't just that it would be a matter of faith, it would kind of take the political fire that's overriding the important policy debate away because people would actually have to sit across the table from each other. I haven't been around the City long enough to know if there's any precedent for this kind of stuff. It doesn't seem to me that kind of thing happens in a hearing situation like this where people are talking about specific bills. But it seems to me like if we're serious about ever really reducing this thing, we ought to take it in earnest. In closing, today's young Philadelphian inherit a city that has suffered for more than 60 years under tax that contributes to more than 80 453 4/8/02 - WHOLE - TAX REDUCTION BILLS people packing up and moving trucks and leaving every day. The window of opportunity and political will exists now to deal with the wage tax and pass along a healthier Philadelphia to our children. Young Involved Philadelphians and its coalition partners will laud and work with those elected officials who vote for Bill 92 and who go on to implement further tax reforms, and we most certainly remember those who fail to rise to the occasion when we go to the polls next May. Thank you very much. It's been a long day. I really appreciate you giving me your attention.
Thank you very much. Are there any questions for this witness? Thank you very much for coming in to testify. Do we have anyone else to testify? Seeing no one, this Committee will stand in recess until tomorrow morning promptly at 9:30. Thank you all very much. (Council adjourned at 5:50 p.m.) - - - 454 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of April 8, 2002, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE ________________________________ JOSEPHINE CARDILLO Registered Professional Reporter ___________________________ Lisa C. Bradley, RPR and Notary Public