Thank you very much. Any questions or comments from members of the Committee? (No response.)
Thank you very much, Tim. MR. McPHERSON: The last witness that I have is Carol Goertzel. (Witness approached witness 251 2/27/08 - WHOLE - BILL 080022, etc. table.)
Good afternoon. Please identify yourself for the record.
Thank you. Good afternoon, Madam President and honorable members of the City Council. My name is Tara Carlempki. I'm from PathWays and I'm reading the testimony of Carol Goertzel, who could not be here today. PathWays PA is an agency that has been committed to keeping families together and providing both advocacy and services to and on behalf of at-risk children, teens, women and families for almost 30 years. We work directly with over 5,000 individuals each year. In recent years, PathWays PA has provided statewide outreach promoting the Federal Earned Income Tax Credit and Pennsylvania Tax Forgiveness in addition to hosting mobile tax sites in the 252 2/27/08 - WHOLE - BILL 080022, etc. Philadelphia region. Our experiences have given us the opportunity not only to work better with our clients, but also to advocate for better services and policies to help bring them out of poverty. Based on these experiences, we know that wage tax relief is of critical importance to low-wage working families in Philadelphia. Families who would be eligible for the tax relief are already making far less than what they would need to make ends meet in Philadelphia. They cannot afford to lose the opportunity to keep more of the money they earn and need to support their families. Throughout the state, PathWays PA is best known for the Self-Sufficiency Standard of Pennsylvania. This standard is a yardstick that take into consideration real costs in calculating the minimum family income needed to maintain self-sufficiency. Since these costs vary throughout the state, we have calculated the needs of families in all 253 2/27/08 - WHOLE - BILL 080022, etc. 67 counties and adjusted the costs accordingly based on family size and configuration. According to the standard, a family of one adult, one infant and one pre-schooler in Philadelphia needs $44,190 to make ends meet. No fancy vacations, no car, no eating out. Just a two-bedroom apartment, with heat, food on the table, safe childcare and a TransPass to get to work. Although this wage only covers the necessities, it is still beyond the reach of many Philadelphians. Philadelphia has the highest percentage of low-income working families of any county in the state. In January 2007, PathWays PA released "Investing in Pennsylvania Families: Economic Opportunity For All," which shows that 22 percent of working families earn less 23 than 200 percent of the poverty line, or 24 just over $35,000 for a family of three. 25 This amount is still less than many 254 2/27/08 - WHOLE - BILL 080022, etc. families need to be self-sufficient, particularly in Philadelphia where the number of low-income working families is even higher. Forty-two percent of working families living in Philadelphia are low income. In addition to being low income, families whose earnings fall in the bottom three-fifths of income in our state take on more of a tax burden than wealthier families due to the uniformity clause in our tax code. Even though these families are struggling to make ends meet, they lose more of their income to taxes than better-off families. In the highly regressive tax system in which Pennsylvanians must operate, there are few rays of light for low-income workers and their families. The Federal Earned Income Tax Credit and, to a lesser extent, the Pennsylvania Tax Forgiveness Program provide this relief in the form of tax credits to low-income workers. Philadelphians have been 255 2/27/08 - WHOLE - BILL 080022, etc. waiting for further progressiveness in the form of the low-income tax credit, which after much delay was scheduled to take effect in Fiscal Year 2013. However, in the Five-Year Fiscal Plan, this long-awaited tax credit is eliminated, quote, "since the significant tax reductions in several other areas in conjunction with recent expansions to the Federal Earned Income Tax Credit Program will substantially benefit low-income residents and employees of Philadelphia firms," end quote.
While other tax cuts will benefit low-income Philadelphians, they will not do so at the same level as the low-income tax credit. 8 percent. Under the low-income tax credit, the wage tax would decrease for those who qualify for the Tax Forgiveness Program. A three-person family earning 256 2/27/08 - WHOLE - BILL 080022, etc. $25,500 a year, the maximum amount in tax year '07 this family can earn and qualify for the full Tax Forgiveness Refund, pays $950 per year in City wage taxes under the lowest wage tax proposed. This family, who already earns too much for food stamps, makes nearly $20,000 less than a self-sufficient wage. That $950 or any portion thereof would make a substantial impact in the rent, food, utilities or childcare costs of the family. 05 percent reduction in the wage tax saves this family more than $100, which could pay for a one-month SEPTA pass. In his inauguration speech, Mayor Nutter called for changes that could help move hundreds of thousands of families out of poverty, and we have no 21 doubt that he intends to meet that goal. S. history was the Earned Income Tax Credit, which provides tax credits to low-income 257 2/27/08 - WHOLE - BILL 080022, etc. working families. With the low-income tax credit, Mayor Nutter and City Council have the opportunity to help low-income working families here in Philadelphia move out of poverty and into self-sufficiency. We hope that instead of eliminating the tax credit, they will take this opportunity to heart. Thank you.
Thank you very much. Any questions or comments from members of the Committee? (No response.)
Thank you again for coming in to testify. Do we have anyone else that would like to testify? Please approach the witness table. (Witness approached witness table.)
Kindly identify yourself for the record 258 2/27/08 - WHOLE - BILL 080022, etc. and proceed with your testimony.
Good afternoon. My name is Alicia Dorsey. I am a working poor Philadelphian. I represent the Vice-Chair -- well, I hold the Vice-Chair at NPIO and I represent ACORN. President Verna and members of the Council, I am happy to be here today and thankful that Council has taken the time to listen to the community on this crucial issue. I am here today representing ACORN, the City's largest community organization with approximately 13,000 members organized into 12 neighborhood chapters. Our members are low- and moderate-income people committed to making sure Philadelphia is a city where everyone can succeed. Our members came together across the state in 2005 to organize for an increase to the minimum wage. ACORN also organizes tax and benefit centers, helping thousands of low-income working 259 2/27/08 - WHOLE - BILL 080022, etc. families apply for and claim all the benefits they are eligible for. These benefits and the Federal EITC and state Tax Forgiveness Programs are critical elements that lift many families out of poverty. ACORN was an early supporter of the Cohen wage tax amendment. We celebrated when it was adopted, and we are here today to ask this Council to honor Councilman Cohen's legacy and continue to support the wage tax reduction as a rare example of tax fairness. The families that will benefit from the rebate are families that make under 32,000 per year. We are a significant number of Philadelphians and we are spread throughout all neighborhoods and Council districts. More than one in five Philadelphians would benefit from this wage tax reduction, and one in three of the City's children would benefit. We are 260 2/27/08 - WHOLE - BILL 080022, etc. hard-working Philadelphians often struggling with the rising costs of housing, utilities and food. We believe in playing by the rules and paying our taxes, but we also ask if such a high tax burden on our backs is really in the best interest of our City. If the Cohen wage tax amendment is allowed to stand, Philadelphia's families will not be the only beneficiaries. Low- and moderate-income families will spend additional income in Philadelphia, stimulating the local economy. As others have already noted, the Keystone Research Institute has shown that 66 cents of the Cohen-targeted rebate would be spent in the City. In the grand scheme of using tax cuts as a means to stimulate the economy, this wage tax reduction is the most effective cut on the table. Philadelphia's families are looking forward to a new day and a new way. Unfortunately, the dark storm 261 2/27/08 - WHOLE - BILL 080022, etc. clouds of rising food costs, rising utility costs, rising gas and public transportation costs cast long shadows and the foreclosure crisis continues to ravage our neighborhoods with little end in sight. Our wages remain flat, and every day each dollar seems to pay for a little less. Making the regressive wage tax a bit fairer seems to be a logical step for the City to take. For these reasons, on behalf of ACORN members across the City, we urge you to preserve the legacy of David Cohen as embodied in the wage tax amendment. Councilman David Cohen's career was spent in service of the interests of poor working Philadelphians. He always had the courage to take the politically unpopular path to speak up for and act in support of the interests of the least powerful Philadelphians. Please do not ignore this legacy and do not ignore the families that this wage tax reduction will benefit. 262 2/27/08 - WHOLE - BILL 080022, etc. Thank you again for giving ACORN the opportunity to testify here today.
Thank you very much. Are there any questions or comments from members of the Committee? (No response.)
Thank you very much. Do we have anyone else to testify? (No response.)
Seeing no one, I want to thank everyone for their patience and certainly for coming in and expressing their views. This Committee will stand in recess until Tuesday, March the 4th at 10:00 a.m., at which time we will consider the Capital Budget. Thank you again. (Committee of the Whole adjourned at 3:40 p.m.) 263 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on February 27, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)