Philly has no business plan
In June, New York State unveiled a new marketing campaign. In it, the familiar voice of Robert DeNiro hypes the "lowest middle-class tax rate in 58 years," before closing with a new slogan: "NY Works for Business." I saw the ad right after the depressing spectacle of Philadelphia's city budget follies. And I thought that, if our city were to launch a campaign, the tag line would likely be: "Philly Stands in the Way of Business."
In June, New York State unveiled a new marketing campaign. In it, the familiar voice of Robert DeNiro hypes the "lowest middle-class tax rate in 58 years," before closing with a new slogan: "NY Works for Business."
I saw the ad right after the depressing spectacle of Philadelphia's city budget follies. And I thought that, if our city were to launch a campaign, the tag line would likely be: "Philly Stands in the Way of Business."
If you're keeping score at home, it's now five years in a row of tax increases from Mayor Nutter, who many of us thought was going to rightsize government, spend political capital to solve our unfunded pension crisis, and be pro-growth instead of a slave to the status quo. Then came the parking tax, followed by a slew of "temporary" (yeah, right) sales and real estate taxes. And now an increase in the business use and occupancy tax. That last straw led Comcast vice president David L. Cohen, a Nutter supporter, to tell this newspaper: "I really don't want to criticize anyone, but I think it was an antibusiness budget. … The city runs perilously close to saying they're just not interested in the job growth that businesses can provide."
We've tried and failed to tax ourselves out of our economic hole. Instead of raising taxes, we have to copy other cities and grow the tax base. That's why, in 2002, Chamber of Commerce head Charlie Pizzi led a march on City Hall to preserve modest wage-tax cuts. Ironically, then-Councilman Nutter was at his side.
But today's Chamber, by design, hasn't been nearly as boisterous in opposition to the rash of job-killing taxes these past years. "We've increased our grassroots effort," says Chamber head Rob Wonderling. "It's better to move the legislative ball forward when policymakers hear from constituents in the neighborhoods as opposed to from board rooms." Trouble is, that's a too-polite approach if you really want to change things in a one-party town.
The Atlanta Chamber publicly has the back of Mayor Kasim Reed when he tackles politically dicey economic-development issues. But that business community includes Coca-Cola, Home Depot, and UPS. Here, our movers and shakers tend to be bankers, lawyers, and developers — many of whom have interests that depend on the kindnesses of local government. We mythologize our toughness in this town, but our business leaders tend to shrink from speaking truth to political power.
This isn't ideological; it's empirical: Local incentives in the tax code lead to jobs. One need look no further than the Navy Yard, where favorable tax deals are attracting new businesses. Or consider the 10-year tax abatement on new construction that brought jobs and newfound buzz to Center City. Mayoral leadership helps, too. But instead of publicly and aggressively courting new businesses, our mayor seeks fawning national press for seeking yet another tax, this one on soda, because, really, who isn't opposed to fighting obesity?
In Chicago, there's been a renewed emphasis on international trade. In Georgia, Mayor Reed unveiled Invest Atlanta, a group that recruits businesses to the city — kind of like our Philadelphia Industrial Development Corporation, only more in-your-face. Our leaders have comparatively played small ball. A few "gateway" offices have moved here — that is, satellite spaces of suburban firms — and the Chamber's Select Greater Philadelphia, which markets the 11-county region to prospective businesses, says it has helped bring more than 70 firms to the area in nine years. But in his testimony before Council in April, it was clear that Commerce Director Alan Greenberger wasn't thinking bold enough:
Councilman Bill Green: Is there a written plan to attract businesses to the City of Philadelphia?
Greenberger: No. … There is this idea about attracting businesses that are in the suburbs to open up offices in the city. … We have a list of about, I think, 20 businesses … [but] there is not a plan in writing. There is an active conversation pretty much every day.
Green: But, if you don't start with something in writing, how do you measure any kind of accomplishment against a goal and the dollars that are being spent to achieve that goal?
Later, Green asked Greenberger to think even more ambitiously:
Green: We've discussed how the Alabama and Tennessee and North Carolina development authorities come up to our manufacturers and recruit them to move to a lower-cost environment … Have we undertaken any effort to identify expiring leases and target those companies in higher-cost areas?
Greenberger: No, it's not been done and I think if it's going to be done, and if it's going to be effective, it has to be done with the state as a partner. … We can't pretend to be a state.
Green: We are not pretending to be a state. We are trying to take knowledge-based industries from commercial leases in other places.
The "we're not a state" line strikes me as an excuse to not aggressively compete. (Green says there is still no comprehensive plan.) This city has gone to war for its economic future with, at best, an incrementalist mind-set.
Remember how, in the '90s, Pat Croce got Larry Brown to take the job as the 76ers coach, a job no one wanted? He stalked his prey. He sent flowers to Brown's wife. He wore the coach down. We need that kind of relentlessness in rebuilding our local economy. We should be making an all-out sales pitch to a different out-of-town business every day. Maybe it goes nowhere, but the answer is always no unless you ask.