Will Increased Tax Collections Fatten City Elected Officials' Wallets? Or Deliver Tax Reform

As the city coffers overflow with tax collections, the Mayor has suggested that he will push for raises for top city elected and appointed officials.

Through the first quarter of the current fiscal year, tax collections have been quite robust indeed.  Total tax collections through the first three months of Fiscal Year 2006 are more than 10.1% higher than collections at the same time last year.  For example, the Real Estate Transfer Tax is up by more than 37.2%, the Wage Tax is up by more than 3.7%, and the Sales Tax is up by more than 8.1%.  The collections figures start to come into focus after the first quarter and this is just one more positive indication that tax collections project to exceed budgeted projections for this fiscal year by more than $100 million...even more than the $60 million excess suggested by the city's own projections.

Today's Daily News reports that news of this extra cash has promted renewed calls to enact the Tax Reform Commission's recommendation to phase out the job-killing Business Privilege Tax.

With the city coffers bulging thanks to unexpected tax revenue largely from the surging real- estate market, City Councilman Michael Nutter yesterday said he will once again push his business- privilege-tax-cut bill.  Last June, an identical bill was vetoed by Mayor Street. Council, by a 9-8 vote, sustained the mayor's veto and Nutter reintroduced the bill the same day.

In recent weeks, Street has been touting the city's rising fortunes. He's also talked about new spending initiatives for the homeless, low-income families who will need help on their energy bills this winter and [emphasis added] even a pay raise for top appointed and elected officials . The city ended the fiscal year June 30 with at least $50 million and possibly $70 million more than planned, according to unofficial estimates. And so far in the first quarter of fiscal '06, real-estate-transfer-tax revenue is up 37 percent, wage-tax revenue is up 3 percent and sales-tax revenue is up 8 percent.

"All the evidence is in and it confirms what many of us believed in the spring," Nutter said. "It's time to take action on the business-privilege tax and end this debate about whether or not we can afford it. The fact is that we can't afford not to cut the tax and eventually eliminate it."

[snip]

Brett Mandel of the tax-reform group Philadelphia Forward estimated that the city tax collections are running about 10 percent higher than last year. "City Council should waste no time," Mandel said. "It should take the Nutter bill and pass it, phasing out the job-killing business privilege tax before the mayor spends this new money." (Full Article )  

So what should we do with this extra income that is causing our municipal piggy banks to overflow with cash?  Wednesday's Daily News  reports that Mayor Street will advocate for raises for city elected and appointed officials .  I AM NOT MAKING THIS UP.  In a city with endless needs (from the desperate need to phase-out our job-killing Business Privilege Tax to the countless worthy programs where extra resources could improve the lives of vulnerable residents), the Mayor will push for pay raises...

MAYOR STREET said he'll soon advocate pay raises for top city officials to take effect in January 2008.

[snip]

"I'm going to advocate for raises for appointed officials and elected officials in this government, and I'm going to do it very quickly," Street said. (Full Story )

There you have it friends.  The city administration always finds funding for its priorities and its priorities as outlined by the Mayor's statements include increasing the pay of city officials, but do not seem to include implementing the recommendations of the Mayor's own advisors who called for the elimination of the job-killing Business Priviege Tax.

Do not believe anyone who reports that we cannot afford tax reform.   It it is clear that -- as in every one of recent years -- city tax collections will exceed budgeted estimates.  You can help City Council understand that we CAN afford to phase out the job-killing Business Privilege Tax and that anyone who says otherwise is simply misprepresenting the facts!   Click Here to tell City Council that we CAN afford tax reform -- and call the Mayor at 215.686.2181 to tell him what you think of his pay-raise idea -- TODAY.

 

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