Good evening and thank you for this opportunity to testify. My name is Kamolika Das and I'm the Local Tax Policy Director at the Institute on Taxation and Economic Policy or ITEP. I've lived in Philadelphia for about three years and my daughter will start at Nebinger next year. We plan to live here long term and I'm heavily invested in the prosperity of our city. C. We conduct rigorous analyses of tax and economic proposals and provide data-driven recommendations to shape equitable and sustainable tax systems. So just to start off, sophisticated studies by both ITEP and Stanford researchers find that corporate tax cuts do not primarily grow local economies. Instead when corporations pay less in taxes the ultimate beneficiaries are the owners of corporate stocks. Most benefits flow to foreign investors. A third flows to the richest percent of households and another third flows to the next richest, percent. So in all 90 percent of the benefits go to foreign investors and the richest 12 percent of households altogether. 13 So you hear a lot of 14 anecdotal data about people and 15 businesses moving to low tax areas 16 but study after study hasn't 17 supported that. This makes sense 18 given that taxes generally make up 19 a small portion of business 20 expenses compared to labor property expenses, manufacturing costs, cost of managing supply chain and so on. Businesses care far more about having an educated workforce and reliable infrastructure. I also want to question the assumption that Philadelphia's businesses are struggling to afford the BIRT and net profits tax. We know from Pew's research that only around a quarter actually incur a BIRT liability and that the median BIRT bill is only $1,300. And while the Commission is charged with examining the City's overall tax system, it would be a mistake to ignore the broader context here. Following TCJA, the 2017 federal tax law, virtually every business including large corporations and smaller passthroughs saw substantial tax reductions. 6 billion from the federal tax cuts, and then the state has piled on. In 2022 policymakers cut the corporate income tax rate in half over eight years. Pennsylvania already lost nearly $130 million in revenue in 2023 and this will cost us nearly 1 billion in 2031. So Philly can't afford more tax cuts. We're already facing a situation that could lead to higher expenses and tighter budgets. Over the past few years Philadelphia received over $1 billion in federal funds that we won't have access to going forward. Philadelphia also receives a lot of aid from the federal government, but the incoming Trump Administration has indicated plans to cut $500 billion in annual spending. We don't know yet exactly what these will entail, but we can imagine there will be less direct federal aid that states and localities will need to offset. Cuts to housing aid, food assistance, health care infrastructure, in other words, Philadelphia needs to raise more revenue just to maintain current services. So we're having the wrong conversation. Instead of trying to figure out how to continue cutting corporations for businesses that have already benefited wildly from federal and state tax cuts, we should be discussing how to progressively raise revenue and cut taxes for those with the least means. , and we found that Pennsylvania ranks fourth most regressive in the nation. So, for example, obviously there's not -- Philadelphia cannot make up for all of these state and federal changes, but what we can do is not add to this regressivity. Philadelphia should explore options to expand property tax circuit breakers, especially for renters, and make the wage tax refund program more accessible, not cut taxes for businesses. Thank you very much. And I'm happy to send you all of these reports.
All right. Good evening. My name is Brett Bessler. I'm the Vice-president and Business Agent, proud member of ASFCME District Council 47, Local 2186 representing municipal employees. Anybody in the room if you support our municipal employees in D.C. 47, let me get a hell yeah. There you go. I know there's a lot of developers and stuff and bosses so that's why it was a little low. Tonight I'm here to deliver public comment, with the support of D.C. 47 President April Gigetts, as representatives of thousands of City employees and advocates for the residents that they serve, we must express our profound concern regarding the mulling over of proposing reductions to the BIRT tax. These tax cuts will not benefit City employees and they will not benefit residents, the residents that they support. Instead they risk creating a revenue loss of up to 300 million per year with no clear tangible plan to offset this significant loss. To put this figure into perspective, 300 million is the equivalent of the combined FY25 operating budgets of DBHIDS, Philadelphia Parks & Recreation, the Office of Homeless Services, the Free Library of Philadelphia and Licenses and Inspections. Alternatively, this amounts to the entire operating budgets of Philadelphia Public Health Department, Streets and Sanitation combined. I dare you to frame this in that way to citizens. With the potential federal and state funding cuts looming due to changes in national leadership, now is not the time to exasperate our challenges with internal revenue reductions that we can control. Cuts like the ones under consideration will inevitably lead to reduced city services that all residents depend on. They will also force our members in D.C. 47 to continue to deliver more with less, an already unsustainable expectation. Currently the City's vacancy rate remains around percent. How can we make the City of Philadelphia a more attractive employer to recruit the "best and brightest," that the Mayor refers to if we impose these cuts? How will the City afford fair, just and robust contracts for municipal unions in 2025? How will the City meet additional demands of hosting global events such as the World Cup, MLB All-Star Game and America's 250th anniversary in 2026? The answer is simple, we will not. If we continue down the path of regressive tax policy, we will fail to meet the goals of the current Mayoral administration. And more importantly, we will fail our residents. We urge you to reconsider these proposed cuts, instead adopt a proactive and progressive approach to our tax structure to ensure the delivery of high-quality consistent services for all residents of the city of Philadelphia. Thank you.
Any questions from the Commissioners for these witnesses? (No response.)
Hearing none, thank you for your testimony. And finally, I'd like to call up Erme Maula. (Witness approached Witness table.)
Also, is there anyone else who would like to testify who hasn't given testimony yet? (No response.)
Hi, friends. I feel it's apropos that I get to wrap it up tonight.
So Erme Maula. I'm a member of the Tax Advisory Committee and just a regular ole person coming to talk to you. Stefan, Richard and Matt, thank you to you and the Tax Reform Commission for having a public testimony session afterwork hours to accommodate those of us who work a 9-to-5 job. I'm a community health nurse, a wife, a reading captain, a friend of the library, a friend of my local park and, most importantly, a Philadelphian for over 30 years. My name is Erme Maula and I care about my neighborhoods and the community is (inaudible) and far from me. I live and vote in the Whitman section of Philadelphia. Over the past few years I have advocated for public services that serve all of our communities, those housed and not, those without home computers or Internet access, those who may not speak English as a first language, those needing to navigate through our city resources, those needing a safe, warm space to be during these 11 degree days, those needing mental 12 health services or resources, our 13 youth, our schools, our elderly 14 and, most importantly, our City 15 workers that keep essential 16 services running. 17 Libraries and our City 18 parks and rec centers are our last 19 non-commercial spaces for people to 20 be in. They are all essential services for those who use them but also for those who work in them. Our City revenue funds these essential services to keep our city green, lean and thriving. These services, however, cannot thrive without proper funding, funding that funds our HVAC systems or water heaters that libraries need to function, that keep the park grounds clean and safe to play on, that fund enough staff to open safely to the public and enough programming and materials to deliver necessary resources to all of our communities. City revenue is important to create pathways for young people to have the proper training to move up through our municipal system of careers, acquiring degrees at the Community College of Philadelphia and ensuring that there are jobs to fill within the city. City revenue creates jobs and helps invite and keep talented people into our city and stay in the city. If we cut the revenue necessary to ensure this, which decreasing the revenue brought in by big businesses would do, we do not generate the revenue needed to ensure that we have the salaries offered to keep the talent needed to keep Philadelphia running. We do not ensure that all municipal workers make a living wage to thrive in our city. We do not ensure that we have the facilities available to house our municipal workers. With the loss of COVID money and the promises of this new federal administration to federally take away our social safety net, I am fearful that we won't be able to take care of our most vulnerable neighbors. Please look long-term and ensure that we can generate the revenue we need to ensure that Philadelphia stays the city we all love. Taxes are our main way we generate revenue. Let's generate that revenue from those who will still thrive even with paying the tax, the millionaires and the wealthy and not from those who are barely able to maintain their businesses or livelihood. The cost of living will continue to increase. Let's not burden those Philadelphians who are already so burdened. Let's look long-term and come up with creative, innovative and different strategies than those that have shown to fail our most vulnerable neighbors, like we don't want to be closing libraries in neighborhoods, closing schools and not incentivizing our youth to be proud City workers and stay here. Creating more revenue, creates more jobs in our city and more services for our residents. Create that revenue. Don't stunt it. We are only as strong as our most vulnerable Philadelphians. And our most vulnerable Philadelphians need new strategies to generate revenue in our city. Please keep that in mind. Thank you and have a good night.
Thank you. Seeing that there's no 12 one else here to testify, we thank everybody for coming out to our public hearing tonight. This concludes the Philadelphia Tax Reform public hearing and thank you for joining us.
Thank you. (Tax Reform Commission Committee concluded at 7:26 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. __________________________________ TANEHA CARROLL