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Ferrick: Diaz's proposals have no chance with state legislature

Tom Ferrick writes columns for The Next Mayor, a collaborative project hosted by and made possible by a grant from the Wyncote Foundation.

Nelson Diaz speaks at the Mayoral Candidate Pitch Party at the Field House in Philadelphia on Tuesday, February 23, 2015. (STEPHANIE AARONSON / Staff Photographer)
Nelson Diaz speaks at the Mayoral Candidate Pitch Party at the Field House in Philadelphia on Tuesday, February 23, 2015. (STEPHANIE AARONSON / Staff Photographer)Read more

Tom Ferrick writes columns for The Next Mayor, a collaborative project hosted by and made possible by a grant from the Wyncote Foundation.

It's early in the campaign for mayor, but I can already announce the winner of the coveted E-ZPass Award given the candidate who will spend the most time traveling to Harrisburg to change state law as it relates to Philadelphia.

The envelope, please.

And the winner is . . . Nelson Diaz.

Judge Diaz has (so far) proposed three major changes in state law, including two that would require amendments to the Pennsylvania Constitution.

One would abolish the School Reform Commission and, presumably, the law that was enacted giving it powers to run the district. Diaz wants to replace the SRC with an elected school board.

The second would change the constitution to allow the state to levy taxes on certain properties owned by nonprofits, such as large schools and hospitals, to raise money for the public schools.

The third would amend the constitution to allow Philadelphia to tax residential and commercial/business properties at differing rates, again to raise money for the schools.

All of these ideas are included in Diaz's proposal for funding public education.

Unfortunately, none of these ideas comes with a magic wand - which is what Diaz would need to persuade the legislature to turn these pumpkins into gleaming new laws. Bibbidi-Bobbidi-Boo.

On a scale of one to 10, I give the abolish-the-SRC idea a 3, mostly because it is supported by Gov. Wolf, though not by the Republicans who control the legislature.

As to the constitutional amendments, I would give them a -2 on a scale of 10.

At a candidates' forum in Center City last week, fellow candidate Lynne Abraham was contemptuous of Diaz's ideas about changing the constitution.

"It will never happen," she said in her best Frank Rizzo-style. "And do you know why? Because they hate Philadelphia."

That's true as far as it goes, but there are other factors.

Diaz's ideas would change the constitution, and getting that done is not a race for the short-winded.

A proposed amendment to the constitution must be approved in two consecutive sessions of the legislature and then placed on the ballot for voter approval. The soonest it could happen is three to four years.

But that's only a speed bump. The true obstacle is that these ideas would require amending Article VIII, Section 1 of the state constitution, also known as the uniformity clause. It's short and reads thusly: "All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws."

That clause is why Pennsylvania does not have a graduated income tax or, say, a 12 percent sales tax on luxury cars and a six percent one on all others.

The clause has been tested in the courts a number of times since it was first added to the constitution in 1874, all with the same result. To give one example:

In 1971, Gov. Milton Shapp, after considerable effort, got the legislature to approve a graduated income tax for the state, the first tax on income ever in Pennsylvania.

The state Supreme Court struck it down, saying it violated the uniformity clause. Shapp then had to go back and do the whole tax thing again, only this time to enact a flat 2.3 percent income tax. (The current rate is 3.07 percent, and Gov. Wolf wants to raise it to 3.7 percent.)

The idea on taxing residential real estate at a higher level is called the Levy-Sweeney proposal, after the two men who advanced it: Paul Levy, head of the Center City District, and business executive Jerry Sweeney.

The Levy-Sweeney idea was to amend the constitution just a little - only for property taxes in Philadelphia and only for the express purpose of lowering other business taxes.

Levy has been preaching this idea for years, and it goes like this: We have high business taxes in part because the city cannot tax commercial and residential property at different rates. If we could, perhaps business might accept higher property taxes in exchange for lowering or eliminating other business taxes.

Levy's idea follows his mantra that we should tax things that cannot move: large buildings, as opposed to things that can - businesses that migrate to the suburbs where there are not net profit and other business taxes.

In his paper on education, Nelson Diaz not only embraces the Levy-Sweeney idea, he hijacks it. Instead of dedicating the money for reduction of businesses' taxes, he proposes using a portion of it to fund the public schools.

Since 1874, there has been deep sentiment in Harrisburg against tampering with the uniformity clause. Voters were given two chances - in 1913 and 1937 - to approve proposed changes to the constitution to allow a graduated income tax. Both were rejected.

In 1968, a constitutional convention was held to rewrite the 1874 constitution. The language creating the convention gave it carte blanche on a number of issues, including even the size of the legislature. But the delegates were specifically forbidden to debate, touch, or change the uniformity clause.

I do not see any shift in attitude in Harrisburg today toward changing the uniformity clause in any way. Maybe in 60 years, but not for the foreseeable future.

I blame those of us in the media for this. Early in the campaign, we complained about the lack of ideas being advanced by the candidates. Diaz now brags that he is the only candidate who has a comprehensive set of ideas about funding public education.

We in the media should have been more specific. When we said we wanted ideas, we should have added we wanted good ideas, not half-baked, unrealistic, ideas.