Tax Reform Win one for the city

On Monday, City Council members stood up to Mayor Street, the man who has long dominated them, first as Council president, then as mayor.

A solid Council majority pushed through a budget and a tax-reform package against Street's wishes.

The one-year and five-year budgets that Council approved will fall out of balance if the tax-reform package, into which Council tucked some new revenue sources sought by the mayor, isn't approved. By law, the city can't have an unbalanced budget; if it tries, PICA can punish it. PICA estimates a $16.5 million budget shortfall next year, if the tax plan isn't put in place.

The mayor's loyalists echo his warnings that this budget will force horrible cuts in services for children, families and neighborhoods. But consider this: The money difference between his latest offer and Council's budget comes down to $6 million a year. The city wastes at least that on politically inspired contracts each year. Out of a $3.4 billion budget, such a dollar amount can't possibly require draconian cuts in vital services.

So, is it really about the dollars, or is it about the shift in power at City Hall? Politicians care about such things. But rowhouse owners struggling to make a go of it and business people trying to make a payroll could care less. They care about what the city charges and what it delivers.

Council's robust tax-reform plan would be a strong step toward making the city's taxes-for-services bargain far more competitive, which would help Philadelphia capitalize on its still-impressive economic potential as a center of culture, education, health care, biotechnology and financial services.

The mayor declines to believe econometric studies that suggest the tax cuts could encourage development and build the city's job base, in time generating tax revenues to replace those initially forsaken by the tax cuts.

Council's posture is to make an optimistic bet on the city's ability to flourish. The mayor's is to raise dire warnings about any variance from a status quo that has worked only fitfully for working families.

It's time for optimism to win one at City Hall. Street still has time to switch jerseys and sign on as captain of the optimists. He can rescind his threat to veto the tax package and instead devote his extraordinary mastery of the workings of city government to the job of making tax reform work.