I was saddened to read the news about the Fralinger Mummers club's almost losing all of its costumes, but I was also angered by the fact that the fire was caused by an alleged illegally operated auto body shop that shared the building. As it turned out, the Mummers' luck may have prevailed, as it looks as though most of the costumes were spared by the fire. What still troubles me is the city's apparent inability to close illegal businesses and the destructive effect that has on legitimate businesses and public safety.
Though well-intentioned, it's obvious that the city's Licenses and Inspections and Revenue Departments are understaffed and ill-prepared to handle their vital tasks of protecting the public and filling the city's coffers. The result of the lack of enforcement is that legitimate businesses have to compete with illegitimate businesses. To make matters worse, legitimate businesses are forced to pay more in taxes to make up for the city's failures in collecting owed taxes.
The best example of this situation is the parking industry, where legitimate taxpaying operators compete with unlicensed parking lots - in some cases on the same block. The city never audits to confirm that operators are paying all the taxes due and, as a result, resorts to increasing taxes on the legitimate operators. The parking industry, which had already been the highest-taxed Philadelphia business group, has been devastated with a 33 percent parking tax increase imposed in 2008, along with two real estate tax increases and a 20 percent increase in the Use and Occupancy tax that all legitimate businesses pay.
Like most business profit margins, ours are thin, at about 5 to 10 percent. When you combine the tax increases over the last four years with having to compete with illegal operators and a slow economy, you understand why operating a business in the city is so challenging.
Our city leaders are capable of improving the business environment, as they recently demonstrated by updating the zoning code. What Mayor Nutter needs to do next is to take steps that ensure we have the best leadership available at Revenue and Licenses and Inspections. In addition, the mayor and City Council must devote the necessary resources to employ the appropriate number of people and institute the best technology to police, follow-up, and maintain both public safety and tax collection. The end result will be a stronger, safer, more business-friendly city that will be able to lower all of its taxes and better compete internationally.