CITY BUDGET A GRAB bag
CITY COUNCIL and the Nutter administration spent yesterday circling closer to a final budget deal, and by the end of the day they managed to pass a partial budget package that looks like a cross between a grab-bag and a Walmart price rollback. At least it as so far managed to avoid a good-government version of a corporate bribe.
CITY COUNCIL and the Nutter administration spent yesterday circling closer to a final budget deal, and by the end of the day they managed to pass a partial budget package that looks like a cross between a grab-bag and a Walmart price rollback. At least it as so far managed to avoid a good-government version of a corporate bribe.
The main components of the deal voted on late yesterday include a 9.9 percent increase in the property tax, a new tax on smokeless tobacco and cigars, and a trash fee for small businesses and multi-family homes. These, along with some cuts, come close to filling the $150 million budget hole.
The good news is that the budget is almost there, without the tax on sugary sodas that Mayor Nutter was lobbying for. But as solutions go, these are far from brilliant.
Everything you need to know about the maturity of Philadelphia's leadership is encapsulated in Council's desperation to avoid a double-digit tax increase. Instead of just hiking property taxes 12 percent, as Councilman Frank DiCicco has suggested, the city's current plan involves a marketing ploy straight out of Walmart's playbook: call it $9.99 instead of $10, or in this case, $12. (On a tax bill of $4,000, the difference between 9.9 and 12 percent is less than $90.)
The end result requires cobbling together a property-tax hike with various other measures that unnecessarily complicate matters and don't really spread the tax burden.
For example, the measure to generate $4 million by taxing retailers who sell smokeless tobacco products, including cigars. As in the case of the soda tax, which the city can't impose as a directed tax, this would basically be a levy on certain kinds of retailers, who would then decide how to pass that cost onto their customers. The additional wrinkle: this may get trumped if the state decides to impose a directed tax on the same products.
Speaking of the soda tax, one proposal discussed in Council would transform the 2-cents-per-ounce tax Nutter wants in order to raise revenue and fight obesity to a $10 million "gift" from the soda industry to Pew, which would use the money to fund anti-obesity programs. In exchange, the soda tax idea would be dropped.
It's unclear where this will go, but the idea raises plenty of red flags. On one hand, it would be great for the city to get $10 million from the beverage industry without actually imposing taxes.
On the other hand, something about the city abandoning a policy proposal because wealthy industry lobbyists paid it to do so makes us queasy. Exchanging tax policy for cash contributions isn't new; one word for it is "lobbying." A less charitable one would be "bribe." This is a door that should remain shut.
We can't help wondering what other policy decisions the city could be tempted to make in exchange for cash. Maybe a beer company will pay us $300 million if we stop arresting people for drunk driving?
If nothing else, the public needs time to consider whether this is a path we want our government to go down. As for the rest of the budget, we wish Council would have stuck with a straightforward property-tax hike that people could understand, instead of pulling this strange collection of levies out of a hat. Or wherever else it's getting these ideas.
