The Fiscal Policy of a Confused Progressive.
I’ve always considered myself progressive; a strong commitment to the environment, a belief that human rights should be a large factor in our foreign affairs, a progressive income tax verses a flat sales tax, abortion on demand until the age of two, separation of church and state, a welfare system for the disadvantaged, a draconian commitment to the first amendment… you get the point.
But recently, and especially discussing policy around the upcoming election, I’ve found myself in favor of some issues that I think most of my friends would disagree. My question is, can you still be a progressive, and hold these fiscal policy beliefs?
1) Pensions for city employees must go. Yesterday, the city council voted unanimously to override Street’s veto (do I agree with Street?!?) making it easier for cost of living increases on pension payouts to happen. In a few years we will be paying 25% of our city budget to the pensions for teachers, cops, administrators, and other city employees. This is an unattainable amount and a switch to a 401k-like retirement plan for new city employees is a must.
2) The ten-year tax abatement has been a good thing. While I agree that it might be time to drop this abatement for areas of the city I can’t even afford to live in, this idea has increased development in areas you couldn’t pay me to rent in. That seems like a good thing. Vacant properties and empty lots are disappearing and young couples are moving in. We should continue to encourage that.
3) The gross-receipt tax is a nonstarter and should be eliminated. I think business should be paying their fair share of taxes, but a tax on a company’s gross verse their profit seems to drive out small start-ups. My last job was for a company that used to be located in South Philly, but since moved to the suburbs where this tax wasn’t an issue. We need business here, small ones, big ones, successful ones.
4) Sometimes tax breaks to large billion-dollar national companies aren’t a bad thing. I think we need to be competitive with our surrounding area. The idea that large companies want to inherently be in a city no longer holds water. Think of some GIGANTIC corporations and look where they’re headquartered. I bet that about half of the ones you look at are not in a large city anymore. These companies bring lots of jobs, good high-paying, stock-option-carrying jobs with health-care and significant vacation time. The kind many highly educated people want. We need to compete with the likes of Montgomery County and the state of Delaware in a language that greedy businesses speak; cost-benefits.
5) Reduce the city wage tax. Yes we need one, I’m happy to pay it, but it shouldn’t be higher than New York’s. This wage tax has a real affect on keeping young people from not living and working in the city. Believe me, I used to work with all of them.
I guess what I want to know is how common is this fiscal variation amongst young progressives? Am I the only one out there, or are there people who see significant municipal positives from a slightly more conservative fiscal policy?
It ties into someone else's
It ties into someone else's post about "what is a progressive". There is no common platform. One progressive can be for the environment, but have a totally contradictory view about abortion.
One progressive can believe we need to tax and spend to increase services for the poor while another progressive may think some level of fiscal responsibility is necessary while trying to make life better for everyone.
"Progressive" is such a vague term. At its base level, it is someone who just wants things to progress for the better. There is no guarantee that anyone is going to agree on how that progression takes place.
Amen
I hear you on some of those concerns, esp the pensions. Of course we as progressives want people to have fair and protected pensions, but the city is now in the position where we are looking at a serious long-term crisis and no one seems to know entirely how to fix it (Nutter seems to have the best grasp on this, and that is coming from a Dwight Evans supporter). My progressive heart tells me to support these pensions and help workers protect them, but at what point does it become overwhelming and impossible? We're flirting with that fine line very seriously these days, which has caused me to rethink a lot of traditional fiscally progressive values I've always just kind of had and never thought twice about. But then again, if we had a smart fiscally-minded Mayor, maybe I wouldn't have such an inner-conflict because he/she'd be able to address these issues competently.
I also have a big problem with the trade unions. My mother and father were both members of various unions at times, so it's not as if I don't have the perspective and respect for collective bargaining. It bothers me that with a beautiful convention center to compliment a vibrant downtown with great dining and entertainment, we are still competing with Valley Forge and Atlantic City for major conventions. It's simply too expensive to do anything here, so we keep taxes high to offset lack of outside income, which still forces people elsewhere. It's a dangerous cycle and there are times I do think about how our city would be right now if Sam Katz had been elected.
So I guess the answer to your question is: yes, there can be different variations of fiscal policy amongst progressives. And I happen to be one very liberal-minded voter on all social issues who has begun to embrace a few traditionally conservative fiscal ideas.
Be Nice to Charlie
I totally disagree with you Charlie, but you are a sweet boy.
Keep the attacks civil people (you know you are Dan, Stan, Price, et.al.).
more on this
There is no hard and fast definition of progressive. The most common element, at least at YPP,seems to be internet-saavy, "liberal," mostly middle-class, and often white.
That said, here's what I think about your fiscal position:
1) Pensions for city employees must stay. Pensions are guaranteed retirement benefits, 401 k's are not. The City and the School district combined employ more Philadelphians than any one else. If they send the signal that it's ok to throw retirement benefits under the bus, there's no hope for anyone else. The bigger issue is that Social Security doesn't really cover people the way it used to and that people are living longer. Until national-level systems and issues are realigned to deal with these realities, the City needs to hold down the fort on pensions. Otherwise it will be seen as ok to get rid of one part of safety net that has transferred old age in America from a torturous stage of being ignored and mistreated until a tragic death (see 19th century) as opposed to a chance to catch up on years of lost sleep, endured in the forced servitude that is our capitalist system and the 40-hour work week.
Further, city pensioners buy stuff and pay property taxes and are able to afford their homes. Gutting their income will only cost the city more in the long run.
Ten-year tax abatements are fine as long as they create sustainable growth that offers opportunities to people of all incomes to realize the dream of owning a home. The past 4 or 5 years of tax abatements in Center City have been a total joke and fly in the face of conservative free marketeers who say the market should not be artificially constrained.
Business taxes should be realigned to be more fair. However, any changes in structure should be revenue neutral. And there is no proven correlation between tax policy and business tax location--that is a dynamic process with many different factors which influence business location decisions. Correlation does not equal causation.
I agree that tax breaks to large billion-dollar national companies aren’t always a bad thing. However, tax abatements and TIFs need to be awarded in the context of an economic development plan that favors business development of sustainable companies (those that will be around for a while) and those that fit our local economy and niches well and those that pay quality wages and offer appropriate benefits.
The city wage tax should be graduated so that everyone pays according to their ability to pay. That's different than initiating immediate, across-the-board cuts or comparing rates to other cities without analyzing the complete tax structure and local economies in play.
In answer to your question, you can call yourself whatever you want, and progressive is a confusing term, but I don't think you can make the city fiscally solvent for the next 100 years with the plans you have outlined above. Economic development is also a lot bigger than tax policy and I am surprised Charlie that you have focused so much on it as opposed to thinking out of the box on issues: like making Philadelphia the premiere green-building center of the East Coast which would attract new development, new residents and provide high-wage employment opportunities for existing residents.
Pensions
The real issue with Municipal pensions is how much they are underfunded. They are now funded at abouy 55% of liabilities. Our fund is funded at 121%. Harry Gross says if your pension fund drops below 80% you shopuld worry.
Our Union (Operating Engineers)knows what we can charge contractors before they are willing to fight to go scab or go out of business. The City Unions better come up with a plan or they may see their funds go broke. This could mean people who counted on these funds may never see them. A little pain now may be better than alot of pain later.