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City Council Passes $3.8B Budget
One-Percent Sales Tax Hike Expected
By JENNY DeHUFF, The Bulletin
Philadelphia — City Council unanimously passed a $3.8 billion budget yesterday, marking the beginning of a 1 percent sales tax hike, if approved by the General Assembly.
For months, City Council and the Nutter administration have wrestled with Philadelphia’s budget. Provisions of the mayor’s original budget included 20 percent property tax and 1 percent sales tax increases, but backlash from City Council thwarted that plan.
Citing the reason for the tax increases, Mayor Michael A. Nutter said the city could face “devastating” repercussions of not closing a $1.4 billion budget hole over five years.
Closings of fire department companies, libraries, health centers, recreation facilities and pools were all possibilities the mayor said he had hoped to avoid. Those threats forced City Council to work with the mayor to uncover adequate areas of savings, efficiencies and revenue boosters.
The budget goes into effect June 1.
When City Council presented its counter-budget proposal nearly two weeks ago, At-large Councilman Bill Green, D, said it was a rare thing.
Council’s budget scenario included extending the temporary sales tax increase over five years instead of three and keeping property taxes where they are.
“I can’t remember it ever happening in Philly,” he said of the counter-budget.
“The budget it the least regressive of all the choices. It costs far less than any others we’ve seen.”
Mr. Green said Philadelphia would see a “doomsday scenario” if the budget finds little favor in Harrisburg.
“It is not a good alternative. I’m not happy about the outcome, but it is the best of a lot of bad choices,” he said.
Prior to City Council’s approval of yesterday’s budget, a group of angry citizens lined the walls of council chambers to voice their concerns over the budget compromise.
Members of the Coalition to Save the Libraries, Asian Americans United, AFSCME District Council 47, firefighters union Local 22 and the Vote for Homes! Coalition, were among protesters.
“It’s bad news for the residents of Philadelphia,” said Commonwealth Foundation Senior Fellow Nate Benefield. “Philadelphians have one of the highest tax burdens in the U.S., and it puts Philadelphia at a comparative disadvantage to the suburbs.
“Getting spending in line is the alternative. Philly has budget problems from overspending. [It’s] not doing nearly enough to curtail costs in all sorts of areas.”
Republican At-large Councilman Jack Kelly, said, of all the proposals brought to the table, the $3.8 billion budget is less painful for everyone involved.
“I think its more fair, regardless if you live, work or visit Philadelphia, everyone pays little bit more, but that was the only way to go,” said Mr. Kelly.
“If we’re going to make this city grow, I think what we have to do is lower business taxes and stabilize property taxes.”
Sentiment from the mayor’s office reflected much of City Council’s optimism.
“We found ways to do things cheaper,” said Luke Butler, the mayor’s deputy press secretary.
“These were unusual challenges we face and so what we tried to do was preserve core public services to protect the most vulnerable populations in Philadelphia and not to do anything that would damage the long-term competitiveness of this city.”
State Rep. Michael O’Brien, D-175th, of Philadelphia, warned the city might not realize any new revenues before the fall.
He said Philadelphia must appeal to conservatives in Harrisburg, many of whom will be difficult to persuade to pass a budget to increase taxes.
“It borders on irresponsible that the city has passed a budget precipitated on a hope and a wish,” he said. “I have severe concerns for the financial well-being of the city.”
At-large Councilwoman Blondell Reynolds Brown, D, said Philadelphia joins New York City, Atlanta and Columbus, Ohio in their decisions to either raise taxes or cut spending.
“We’re one of four cities that proposed tax increases. Luckily, City Council was able to craft an alternative proposal, and in doing so, responded to [the people’s] plea to not raise property taxes.
“It’s been magnified because of the recession and our experiencing a reduction in tax revenues,” she said.
In addition to the General Assembly, Philadelphia’s budget now requires approval from the Pennsylvania Intergovernmental Cooperation Authority (PICA), an independent government watchdog agency.
Jenny DeHuff can be reached at jdehuff@thebulletin.us
For months, City Council and the Nutter administration have wrestled with Philadelphia’s budget. Provisions of the mayor’s original budget included 20 percent property tax and 1 percent sales tax increases, but backlash from City Council thwarted that plan.
Citing the reason for the tax increases, Mayor Michael A. Nutter said the city could face “devastating” repercussions of not closing a $1.4 billion budget hole over five years.
Closings of fire department companies, libraries, health centers, recreation facilities and pools were all possibilities the mayor said he had hoped to avoid. Those threats forced City Council to work with the mayor to uncover adequate areas of savings, efficiencies and revenue boosters.
The budget goes into effect June 1.
When City Council presented its counter-budget proposal nearly two weeks ago, At-large Councilman Bill Green, D, said it was a rare thing.
Council’s budget scenario included extending the temporary sales tax increase over five years instead of three and keeping property taxes where they are.
“I can’t remember it ever happening in Philly,” he said of the counter-budget.
“The budget it the least regressive of all the choices. It costs far less than any others we’ve seen.”
Mr. Green said Philadelphia would see a “doomsday scenario” if the budget finds little favor in Harrisburg.
“It is not a good alternative. I’m not happy about the outcome, but it is the best of a lot of bad choices,” he said.
Prior to City Council’s approval of yesterday’s budget, a group of angry citizens lined the walls of council chambers to voice their concerns over the budget compromise.
Members of the Coalition to Save the Libraries, Asian Americans United, AFSCME District Council 47, firefighters union Local 22 and the Vote for Homes! Coalition, were among protesters.
“It’s bad news for the residents of Philadelphia,” said Commonwealth Foundation Senior Fellow Nate Benefield. “Philadelphians have one of the highest tax burdens in the U.S., and it puts Philadelphia at a comparative disadvantage to the suburbs.
“Getting spending in line is the alternative. Philly has budget problems from overspending. [It’s] not doing nearly enough to curtail costs in all sorts of areas.”
Republican At-large Councilman Jack Kelly, said, of all the proposals brought to the table, the $3.8 billion budget is less painful for everyone involved.
“I think its more fair, regardless if you live, work or visit Philadelphia, everyone pays little bit more, but that was the only way to go,” said Mr. Kelly.
“If we’re going to make this city grow, I think what we have to do is lower business taxes and stabilize property taxes.”
Sentiment from the mayor’s office reflected much of City Council’s optimism.
“We found ways to do things cheaper,” said Luke Butler, the mayor’s deputy press secretary.
“These were unusual challenges we face and so what we tried to do was preserve core public services to protect the most vulnerable populations in Philadelphia and not to do anything that would damage the long-term competitiveness of this city.”
State Rep. Michael O’Brien, D-175th, of Philadelphia, warned the city might not realize any new revenues before the fall.
He said Philadelphia must appeal to conservatives in Harrisburg, many of whom will be difficult to persuade to pass a budget to increase taxes.
“It borders on irresponsible that the city has passed a budget precipitated on a hope and a wish,” he said. “I have severe concerns for the financial well-being of the city.”
At-large Councilwoman Blondell Reynolds Brown, D, said Philadelphia joins New York City, Atlanta and Columbus, Ohio in their decisions to either raise taxes or cut spending.
“We’re one of four cities that proposed tax increases. Luckily, City Council was able to craft an alternative proposal, and in doing so, responded to [the people’s] plea to not raise property taxes.
“It’s been magnified because of the recession and our experiencing a reduction in tax revenues,” she said.
In addition to the General Assembly, Philadelphia’s budget now requires approval from the Pennsylvania Intergovernmental Cooperation Authority (PICA), an independent government watchdog agency.
Jenny DeHuff can be reached at jdehuff@thebulletin.us
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John Law wrote on May 23, 2009 5:49 PM: