Ed Schwartz
Thu, 27 Jun 2002 13:39:36 -0700
STATE SENATE WAGE TAX CUT BILL THREATENS
NEIGHBORHOOD SERVICES
As noted in today's Inquirer, the State Senate voted late last night to
impose a reduction of the City wage tax down to 3.5% over the next five
years, costing the City as much as $300 million over that period of time.
The State Senate also approved a bill that would permit suburban counties
to transfer some of the wage taxes collected on suburban workers in
Philadelphia to suburban townships, costing the City another $67 million.
The details are spelled out here:
http://www.philly.com/mld/inquirer/news/local/states/pennsylvania/cities_neighborhoods/philadelphia/3554224.htm
Even granting the assumption that reducing the wage tax might create a
'supply side' effect that replaces part of the lost revenues, my fast
calculation that City revenues will fall by at least $200 million annually
by 2006-07 (that's within a single year), if this plan is put into effect
with no strategy to replace the funds. Even the Pennsylvania Economy League
study supporting wage tax reduction acknowledges that the 'supply side'
effect will recoup lost revenues over an 8-9 year period--and 50% of these
revenues will come from increased real estate assessments in Philadelphia
in 'hot' economic development areas. The authors of the study then
acknowledge that most people in the City would not be able to afford these
higher real estate taxes. But PEL leaders conveniently ignore this warning
in their own statement.
State Senator Vince Hughes (D) made an effort to commit the Commonwealth to
providing $110 million in court costs to the City--which the courts have
ruled the Commonwealth should do--to offset lost revenues. This did not
pass. The State Senate went ahead and voted for the wage cuts anyway.
So who will really pay the price for all this? We--most of all. We're the
ones who devote hours of volunteer time to making government work in
Philadelphia--through block cleanups, and Town Watch, and after-school
programs for kids. We're the ones who know first-hand how frustrating it is
not have enough City workers to implement code enforcement, or to keep drug
dealers off our neighborhood main streets, or provide the needed support
for young people to do well in school. We're underfunded as it is in terms
of providing an adequate response to neighborhood problems. Cutting $200
million out of the budget--more, in today's term, than the *combined*
budgets of the Streets/Santitation Department, L&I, the Recreation
Department, and Fairmount Park--would be devastated.
In response to the City's debate over the wage tax, ISCV has sought support
to produce a "Neighborhood Guide to the City Budget" relating revenues--tax
and otherwise--to the cost of services and neighborhood improvements that
we all work to strengthen. This week the Samuel S. Fels Fund awarded us
this grant--so we will be producing this document and holding neighborhood
meetings around it. Whatever happens in Harrisburg, this is a critical
issue for all of us to discuss over the next year--and discuss on an
*informed* basis. Having wrestled with the City budget for more that 20
years--in and out of government--the lack of sensible, accurate information
on which to base a decision in this area is simply appalling and I'm going
to what I can to provide it.
But..if Harrisburg takes this decision out of our hands, the results will
be--well, let's just say it will make the problems created by Harrisburg
management of Philadelphia's schools seem mild by comparison.
The Senate has voted.
The House has not. But with the fiscal year ending June 30th, there may be
an attempt to pass it there...
So if you believe as I do that we, the people, of Philadelphia ought to be
determining what happens to taxes and spending here--and that we need to
spend a lot more time examining these issues than we've had--you might call
your State Legislator in Harrisburg and say that.
Mad at Harrisburg? Don't Mourn. FAX or Call Back.
FAX Back From Here:
http://www.hallwatch.org/profiles/pahouse
Or Get their Harrisburg office numbers from here:
http://www.phillyneighborhoods.org/Organizing-Phila/Officials-Phila/Harrisburg/harrisburg.html
----
You are receiving this because you are subscribed to the
list named "UCwestBC." To unsubscribe, see <http://list.purple.com>