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A vote on a controversial parking tax cut was delayed as Philly budget negotiations dragged on

Supporters hoped an informal agreement between the city’s largest parking companies and a union representing their workers would push it closer to the finish line.

A parking lot at 8th and Market Streets in Philadelphia. A controversial bill to reduce the parking tax rate is one issue holding up a final agreement on the city's budget.
A parking lot at 8th and Market Streets in Philadelphia. A controversial bill to reduce the parking tax rate is one issue holding up a final agreement on the city's budget.Read moreTIM TAI / Staff Photographer

Supporters of a controversial bill to lower Philadelphia’s tax on parking lot operators hoped an informal agreement brokered Wednesday between the city’s largest parking companies and a union representing their workers would push it closer to the legislative finish line Thursday.

But that agreement, which included promises of higher wages for parking workers, sparked new backlash against City Council Majority Leader Cherelle Parker’s bill from progressives who say parking lot owners shouldn’t need a taxpayer giveaway to pay living wages.

Council on Thursday postponed votes on Parker’s bill, the city budget, and related tax proposals, as lawmakers and Mayor Jim Kenney’s administration continued to negotiate privately over legislation that will shape the city’s economic recovery from the pandemic.

With a July 1 deadline looming, Council President Darrell L. Clarke had hoped to advance the bills out of committee on Tuesday, before delaying the votes to Thursday. But with significant disagreement remaining over spending on antiviolence programs, how to use federal stimulus funding, and whether to cut parking, wage, and business taxes, Clarke on Thursday was forced to delay until Friday.

Councilmember Derek Green said reaching a deal has been more difficult because Council is meeting remotely.

“I don’t think there’s consensus,” said Green, who chairs the Finance Committee. “It was a lot easier [while meeting in person] to get a sense of where people are.”

Parking lot owners say Parker’s bill, which would lower the parking tax rate from 25% to 17%, would boost businesses that were particularly hard hit by the pandemic and help bring visitors back to Center City. The two largest operators, Parkway Corp. and Brandywine Realty Trust, are vowing to raise workers’ wages. But those promises can’t be written into law and are not enforceable without future Council action.

To address those concerns, the two companies and Local 32BJ of the Service Employees International Union reached a deal detailing the promises for workers. Average wages would go from $11 to $13 per hour to $17 to $19 per hour by 2024. All workers would get 401(k) retirement plans, and full-time staff would receive health insurance. The employees would get eight paid sick days and seven paid holidays, in addition to one to four weeks of paid vacation, depending on seniority.

Gabe Morgan, vice president of Local 32BJ, said his union is also skeptical that operators will follow through on their promises. But he said lawmakers shouldn’t pass up an opportunity to improve the lives of the roughly 2,000 people who worked in the industry before the pandemic.

“Somehow [Parker’s bill] is bad government, but the city can just spend a bajillion dollars with no measurable results on fighting poverty, and that’s good government?” Morgan said. “The city spends an enormous amount of tax revenue, money that comes from other folks on all types of things that have way less of an impact than taking 2,000 working people out of poverty.”

He’s asking Council members to approve the measure in committee, and then wait to see if other parking lot operators sign on the agreement before giving it final passage.

» READ MORE: Philly leaders negotiate anti-violence funding, federal aid, and tax cuts as budget deadline nears

Meanwhile, Kenney’s administration is still trying to win over at least nine members, a Council majority, to support the mayor’s proposal to resume small annual cuts to the wage and business tax rates that were paused during the coronavirus pandemic. Kenney’s plan would cost the city $180 million in tax revenue over five years.

While enacting significant tax cuts this year appears to be off the table, proponents of Kenney’s plan hope that even small reductions would send a positive signal to the business community as Philadelphia reopens.

The Chamber of Commerce for Greater Philadelphia, as well as local chambers representing Black-, Asian American- and Hispanic-owned businesses, issued a joint statement Thursday supporting cuts to the wage tax and the Business Income and Receipts Tax.

“We believe that the best way to support businesses that struggled to remain in business during the pandemic, help businesses that want to return their employees to work in the city, and entice new firms to come here is to reduce the taxes they pay,” the groups said.

Council’s more progressive members are critical of reducing revenue that could be used to fund pressing needs, especially violence prevention programs. Because the tax and spending bills are separate pieces of legislation, opponents of the tax cuts could vote against those measures while still voting for the main budget bill, which details spending.

» READ MORE: Kenney’s budget would use stimulus money to cut taxes and return Philly to pre-pandemic spending

In the middle are members like Green, who said he’s skeptical of making a significant cut in the wage tax this year but would like to see a business tax cut designed to aid small and minority-owned businesses.

“Why don’t we do something that really grows jobs?” Green said, contrasting such an approach with a symbolic wage tax cut.

Another area of debate is how much money the city will dedicate to antiviolence programs. Kenney proposed $34 million in funding for community-based strategies, like violence intervention efforts that tap trusted community members to try to head off confrontations before they become deadly. Thirteen Council members signed a letter Sunday calling for $100 million in such funding.

Kenney’s proposed $5.18 billion budget would use an infusion of federal stimulus money to return the city to pre-pandemic spending levels, by restoring some services cut last year, reducing wage and business taxes, and borrowing money for large projects.