Tax Reform Or More Job Loss...It Is Up To Mayor Street

It comes down to this...the Mayor is currently deciding whether to veto the bill passed by City Council which will phase out the job-killing Business Privilege Tax to grow jobs in Philadelphia.  This week, both of Philadelphia's major newspapers weighed in, urging the Mayor to sign the legislation.  Given the fact that so many credentialed and important voices are urging the Mayor to sign the legislation, it is possible to ask what possible reason he might have for not signing. 

Would The Crucial Tax Reductions Cost Too Much?  


The Daily News correctly scoffed at the notion that a concern for the budget is behind the Mayor's reluctance to sign the bill to phase out the job-killing Business Privilege Tax. 

The actual impact on the budget is modest: $14 million over the next five years (with more in the second phase). Mayor Street says he'll veto it because it will cause drastic cuts in services. But considering how he came up with a creative and effective way to restore cuts to libraries and arts institutions, it's a hard argument to swallow. Especially considering the $21 million in Tax Incentive Financing (TIFs) the city has handed out in the last 12 just two business entities. (Full Editorial )

The Philadelphia Inquirer was equally emphatic:

Street tries to justify such political manipulation under the guise of trying to balance the city's books. But the mayor recently proved he can find additional revenue when he has a mind to. After weeks of insisting cuts to city libraries and fire companies had to occur, he simply proposed a couple of new fees - on billboards and for valet parking - and the cuts went bye-bye.

Just the possibility of voter retribution if the library and fire cuts were made was enough to scare some Council members from tax reform. They need to stop asking Street how high they should jump, and start acting like part of the deliberative legislative body taxpayers have a right to expect. They need to acknowledge that pairing an end to the business privilege taxes with last year's accelerated cuts in the city wage tax is a fair, smart strategy to market Philadelphia as a hot place to invest, instead of a city businesses want to escape. (Full Editorial )

Would The Legislation To Grow Jobs Anger The City's Fiscal Oversight Board?  

The City Administration has suggested that the city's state-appointed fiscal oversight board is against the tax reform legislation.  The Inquirer shows that it just isn't so.

"Street claims the Pennsylvania Intergovernmental Cooperation Authority (PICA), the financial oversight board for the city, might object to the fiscal strain. But PICA chair Lauri Kavulich observed: 'It's ironic that the mayor ignores PICA's concerns while negotiating budgets with Council. But he is happy to use PICA's concerns as an excuse to veto the minimal tax reform in front of him.'

That's a fairly pointed statement from the head of a group that clearly sees the potential positive impact on the city's economic future if reform measures signal to investors nationally that Philadelphia is a more tax-friendly environment.

Does This Vital Legislation Have Policy, Popular, And Political Support?

If you are reading this email, you know that the Tax Reform Commission, the Mayor's Transition Team, the Mayor's Economic Summit, City Council, and a host of other credentialed voices have all joined with residents and employers to call on the Mayor to enact this legislation. Behind the scenes, the city's powerful business honchos are making their voices heard.  The Inquirer notes:

Stephen Steinour, chairman of the Greater Philadelphia Chamber, said businesses appreciate the mayor's recent attentiveness to reform, but they're not interested in a slow political agenda that would put off any business tax cuts until the fall, after the current budget cycle.

'There is mounting frustration, and it's not just with the city banks,' said Steinour, regional president of Citizens Bank, an institution that has done its part to invest in the city by offering low-cost borrowing and investment in relatively risky neighborhoods. 'I think if this tax reform program does not go forward there will be much greater activism.'

His suggestion that the city's corporate citizens will get more involved in the political process is welcome in a city known for limp leadership from its business community.

Mayor Street, who has relied on key business executives for funding aid for various city projects, ought to hear their clarion call for tax reform. Give the people who are trying to sell Philadelphia to the world the help they need to grow this city's economic pie.

So Why Not Sign This Vital Tax Reform Legislation?  

The Philadelphia Inquirer has a theory:

A veto would suggest Street would rather delay meaningful tax reform than put his OK on another legislative victory for his political nemesis, Councilman Michael Nutter, author of the business tax bill.

The Daily News challenged the city's business community to assert its strength so that such political gamesmanship does not threaten the effort to grow jobs in Philadelphia:

If the Mayor wants to put petty politics above the need to grow jobs in the city -- and if the city's business community cannot pursuade him not to -- then we all should be pretty clear about the priorities of the city's government.


If you have a moment free, call the Mayor at 215.686.2181 to ask him to leave petty politics aside, stop making excuses about why we cannot afford this vital legislation, and sign the bill to phase out the job-killing Business Privilege Tax so we can grow jobs in Philadelphia.

Please also take time to Email City Council members today to thank them for their action and their vote to grow jobs in Philadelphia.