This is Ida May Fuller. From the Social Security website:
Miss Fuller (known as Aunt Ida to her friends and family) was born on September 6, 1874 on a farm outside of Ludlow, Vermont...Ida May never married and had no children. She lived alone most of her life, but spent eight years near the end of her life living with her niece, Hazel Perkins, and her family in Brattleboro, Vermont.
Miss Fuller filed her retirement claim on November 4, 1939, having worked under Social Security for a little short of three years. While running an errand she dropped by the Rutland Social Security office to ask about possible benefits. She would later observe: "It wasn't that I expected anything, mind you, but I knew I'd been paying for something called Social Security and I wanted to ask the people in Rutland about it."
On January 31, 1940, Ida May Fuller was the first person in the US to get a Social Security check. Sure, there are problems with Social Security today, but imagine voting for Roosevelt in 1932, seeing him pass the Social Security Act in 1935, and getting a check that helped you retire--a previously unheard of federal benefit by 1940. That sure would make me want to keep voting...
The New Deal was by no means perfect (our leftist equivalents in the 30’s saw it as a major compromise) but at least the Democrats and Roosevelt did something to respond to the Great Depression, and address the injustices caused by the the excesses of 1920’s corporations.
Can we expect the same today? (woo-hoo! The Fed is suggesting a rate cut--that'll solve all of our problems!)
Even though Democrats today have managed to regain power in the US Congress, the real accomplishment of the Republicans was not their 30 year majority rule, but the slow devolution of federal power to the states they achieved while in control. The result is that we are more reliant on the kooks in Harrisburg than ever before. And it's a lot harder for cities to go to the Feds for big pots of money to solve local problems.
What’s my point?
- The Presidential election is very important, but the Democrat we elect next November can only do so much to address Philadelphia’s problems: violence, wage loss, net population loss, a weak education system, and environmental assault.
- City Council and Mayor Nutter can tinker around the edges—-there is a lot to do there—-but at some point, they have to dive in to the big issues, and the biggest among them is generational poverty and a shrinking middle class.
These are familiar themes of course, but as we move into the first 100 days of the Nutter Administration and the new City Council, I’d love to see the new leaders of the city lay out a New Deal for Philadelphia--in writing, in detail.
I want to be able to post a picture her in the next few years of a woman, like Ida May Fuller, who gets something from city government she never expected before like an affordable housing unit paid for by expiring ten-year tax abatements, or a free education at Community College, or a decent-wage job, or free after-school for her kids.
There's been a lot of talk about hope the past few weeks, and this is my greatest hope. That’s not too much to ask is it?
Depends.
It's all about funding.
But, realize, the city has limited funds and resources. We have, what is considered by some, to be a looming budget disaster. Unfortunately, without more help fro Washington or Harrisburg, your requests may be too much to ask for (not that I disagree with them). I think, a Democrat as President can make those things you want more likely.
I think the expiring tax abatement money is already spent. Didn't we talk about that before.
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
Nope.
DeWitt made reference to the inclusion of the expiring tax abatements in the five-year fiscal plan. However:
1- The doc he linked to did not include a specific reference to the dollar amount and role that money plays. It'd be great if someone could find it.
2- The first five year of expiring tax abatements come from 1998-2003, so the bulk of abatements that likely will expire as a result of the housing boom post-2003 has yet to be accounted for or "spent."
And of course it's about funding, but my point is that even the best Dem and the best Congress can not undo 30 years of steady devolution over night. Local responsibility is key, and tacking Harrisburg is even more important.
But we can't wait that long to deal with those quagmires, when there is much urgency right here at the local level.
Here's a reality most are scared to talk about: maybe a fiscal crisis is a good thing. Maybe the middle-class and, especially the upper-middle class people in this city should be forced to pay more in taxes to deal with the growing problem of poverty in our city.
More in taxes?
Ray, realize, there is a vast difference between high Federal versus higher local taxes. If the Federal Government raised taxes on my income, I have no where else to move to pay less taxes. I'm an American, and this is where I will stay. People like me will suck-it-up.
But, if Philadelphia starts raising its income tax, people like me can easily move out of Philadelphia. They've done it before--a 40 year history of flight, where taxes were raised time and time again. I'm not saying the wage tax was the cause of flight, but it certainly didn't help matters. On the local level, governments must stay at least marginally competitive to keep its residents. There is too much competition. The notion is especially relevant here in Philadelphia where the services recieved are not worth the money paid. Schools, trash collection, streets, etc.
I guess what I am saying is, Philadelphia should not enact policy that encourages people who already pay high municipal taxes to leave. That is not sound planning.
Now, my idea is that groups like Casino Free and PNA should be working to ensure that if casinos are built, the money generated here in Philadelphia doesn't go to a marginal wage tax cut, but to doing things like you mention above. I mean, here is a nugget--a new revenue source. Imagine if, instead of giving me $100.00 more a year (I personally have no problem with the present wage tax rate), you would put that money to funding for Community College and free tuition for Philadelphians (obviously, we can talk about critera later) or put it to expanding public transit or whatever.
I guess I'm dreaming. But, I think we agree, but get there differently.
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
My very first post on YPP
On casino-funded redevelopment in New Jersey.
!!
i would not
we do not have an annexed income tax in Philadelphia, like some cities do. We have an unfair, flat wage tax. If that tax were annexed, so that Philadelphians paid based on their ability, we could raise the rates in the higher end and likely REDUCE the tax burden for the majority-I'd guess about 90% of Philadelphians based on similar calculations done at the state level on the PIT.
However, my point is not to get into a long debate about taxes specifically, but to say as Jennifer says below, WE, at the local level, have to come up with a New Deal (comprised of policies that may be totally different than those proposed in the 30's, but a new deal nonetheless) cause no one else is coming to our rescue on SOME issues any time soon.
What do you think about the
What do you think about the use of casino revenue?
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
tricky
sure, but of course the problem is--like in NJ--when you get reliant on it, it gets harder to work against it. And even though slots parlors may start operating soon, my fervent hope is that CFP and community groups have amassed enough power to prevent more licenses from being issues and most importantly, can prevent table games from being added. That is a serious danger that must be addressed.
So, rather than factoring in casino revenue via taxes, I'd rather see some big, up-front payments for capital concerns (which I guess is what Mayor Street did, but weakly) like a subway extension to NJ or a new water-front light rail, or even burying 95 or maybe some affordable housing construction.
Taxes - Perception over Reality
I agree with Gaetano in that we have seen what happens when the city has "high" taxes and poor services relative to the surrounding areas. I also think he has hit a pertinent point with his $100 a year statement.
An increase of one percent in the wage tax wouldn't make an actual difference in the day to day lifestyles of the huge majority of people living in this city. For someone making 75k a year (I know most people don't make this, but I think these would be the people fleeing from the increase), 1% of their income is $750 a year, $62.50 a month. In most cases, for someone making that type of money, 62 bucks a month will not change their lifestyle or spending behavior. But the perception of paying that extra money causes people to completely change their ideas of acceptable tax levels and where they will live their lives.
If there is a perception that people are paying more than their fair share, the reality of a few dollars a month doesn't actually matter.
A big piece in that
is the quality of services.
It's a lot to ask for all at once, but in the long run, the city'll be better with really superior services. That, plus all that cities have that suburbs don't: we stop being automatically on the losing end of that balancing game.
chicken and egg
and how do you provide good services without money to pay for their provision?
The revenue thing is somewhat of a red herring, as there are cities and whole states where even if the revenue exists, the will to address economic inequity does not.
It is sort of convenient to say, "oh yeah, I guess Philadelphia should deal with its huge rate of poverty--higher than any city of our size nationally--but we're strapped."
That's a cop-out that justifies crappy economic development policy of yore and/or helps avoid messy feelings about the rise of an economic super-class in Philadelphia today.
Yeah, you definitely need money
Totally chicken and egg. Though it is a leap of faith, we have to end up in a place where we are both getting more and spending more, and people are never going to want to give more for less or even what we have now.
Quality of Service
Is a huge piece of the puzzle. Unfortunately, it is difficult to cure--and, how much can additional revenue increase performance of workers versus good management.
One example: Right now, as I've said before, when the sanitation workers hit my block, they leave trash cans and rubbish (they dropped) all over the sidewalk. They don't pick it up. They don't leave cans upright. They just let them fall. Thus, walking on my block is akin to an obstacle course with fallen trash cans and debris everywhere. This is one example of services where funding will do nothing to correct--the attitude that I should be happy to just have my trash picked up. Frankly, I think I'm entitiled to have a sanitation worker leave my block as he/she found it, with trashcans (though empty) upright. And, when a bag breaks because he/she is dragging it across the sidewalk, they should have to clean it up.
It irritates the hell out of me and I'm dedicated to seeing a solution!
Also, recylcing. Need I say anymore.
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
Recycling =
among the #1 new day tests. Seriously, lord.
move to west philly!
we already got it. i am ready to move on to recycling 4s and 5s.
West Philly fan
Single-stream recycling is great, and should be city-wide, but I could also handle having recycling pick up every week (like it is in the NW and elsewhere) instead of every other week (like West Philly). Once you start to get serious about recycling, all that paper really piles up.
Not just quality
Cities compete with suburbs not just on the quality of services, but the mix of services. It's not just that you can pay less in taxes by leaving the city--you can pay only for the services you expect to use (schools, police) and not for services you don't expect to use (homeless shelters, health centers). Living in a city pretty much forces you to be a social democrat. That's a big part of the dilemma--we're competing for tax base with entities who can push the burdens of poverty onto the city, and we have no way of forcing those entities to carry their share of those burdens.
No surprise, I suppose
I have to agree with the dilemna John Hogan describes here. There are a lot of programs I would love to see done here but that I fear very much for local government's ability to pay for them and still compete with surrounding counties. Philadlephia still has so far to go in terms of being a place where middle class and working class folks will choose to raise a family, I feel we need to focus on getting Philadelphia to do a much better job of delivering those basics in terms of city services and get the Federal Government back on track in terms of doing what it can and should beyond that. Philadelphia does not exist in a vacuum and there is a reason why the original New Deal happened at a Federal level.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
Sean is right that "there is a reason why the original New Deal
Sean is right that "there is a reason why the original New Deal happened at a Federal level."
There is much that Mayor Nutter can do and much that is beyond his control. The big bucks are on the federal level.
If we want to do something about generational poverty then we must elect a Democratic president and a Democratic Congress.
Then we can push for a substantial increase in the minimum wage. Ray has often brought up the importance of raising wages. Well, there may be an opportunity to do this but we all have to get beyond the Democratic nominee whoever she/he is and work like we never worked before.
If we are to get a shot at a New Deal in the foreseeable future it won’t be by trying to do so in within the city limits of Philadephia, but by changing national priorities.
that's just not true
It is true that a Mayor is very limited in terms of what s/her can do in terms of raising revenue in large sums, but Karen is wrong. The big bucks are not at the federal level in any way, shape or, form like they were for FDR.
And Sean is right that the New Deal happened at the federal level for a reason in 1935, but it simply would not be possible, at least for a minute, to do that today.
It's called devolution for a reason, and there is a great deal more money and power at the state level than ever before. And of the funds the federal government does have control over, money for cities is not a priority. Cities have been consistently defunded for years--before the Republicans even got control.
Lastly, it's important to note that I am not asking for THE New deal to be done over--I am talking about a New Deal for Philadelphia (a pretty unspecific request), and I think that is eminently doable at the local level if there is a will for it.
I'm not so sure
The federal government's budget is just short of three trillion dollars. That's 60 billion dollars per state, if you divide it evenly; about 10,000 dollars per person per annum. Pennsylvania's share of the federal budget, as a share of population, is about 120 billion dollars. Philadelphia's would be about 15 billion dollars.
The state budget, including federal money it receives, is shy of $30 billion. The city's, including federal and state money, is $3.5 billion.
Ray is right about one thing; the days of the federal government giving money to cities directly for use in the general fund, or even to fund specific programs, may be over. This is a problem since historically, federal money has made up a big chunk of the city's total intake. That process is in steady decline. So we can't count on the feds to shore up the budget as such.
However, the federal government and the state of Pennsylvania could, should, and have the resources to take action that would greatly benefit the city and its residents. Universal health care is the most immediate thing that comes to mind. Let's suppose that in the next five years, a bill could pass Congress that would pay directly, from the federal budget, for health insurance for every child in the U.S. under the age of eighteen. This replaces all of the SCHIP plans, parts of Medicaid, etc. Parents don't have to worry about their children's health care when they switch jobs; employers and insurers, including states and cities, no longer have to foot those costs; and millions of kids get health care when they wouldn't otherwise.
Not only does this benefit the city and the state and everyone with kids, who now have more money in their budgets to do other things, but it could provide the germ of something like a New Deal at the federal level. And this is why people who are opposed to the expansion of government programs hate things like SCHIP; because they are scared to death that anything that both makes moral sense and actually works will begin to convince people that big, smart government can actually help them and their families, and then they will ask for more.
We could do universal health care for kids at the federal level. If we could move heaven and earth, fiscally, we could do it at the state level, maybe. But I really doubt we can do anything of that kind of world-changing scale at the local level.
Philadelphia, along with the region, could, I think, completely rethink the way we educate our children; the way we use public space; the way we transport people all across the city; and maybe the way we tax capital. All of those things would be great. And Psst! Brady, Fattah, Spencer, Casey, and co -- it would help if we got a chunk of that federal money too.
Not quite right
The state's general fund alone is worth about $30 billion alone. The federal dollars that come into the state are hard to calculate--it's not like there is a line item in the state budget--they come from all kinds of sources--like TANF money that goes to DPW comes via HHS I believe and unemployment money to the state DOL comes fro the federal DOL, and the EPA gives money another way, etc, etc.
See this chart from the PA Budget and Policy Center site:
Keeping focused Tim
Tim, it's truly a matter of debate what one city can do. I'd argue that in this day and age of devolution, one city could set a precedent by tacking one issue--like affordable housing--and be an innovator that could have a larger impact. That's sort of the point of my post: i don't care what it is, but Philadelphians deserve some kind of new deal than the won we have. I think expiring tax abatements are one place to start.
But you Tim, you named something even more concrete. You said that the city should offer a uniform tax deduction for all Philadelphians--let's say it's $10,000. So everyone gets to knock 10 k off their wage taxable income, and you raise the wage tax by a point or so, what probably ends up happening is that most people's tax go down or stay the same.
That would be a beautiful thing: it may not change the world, but it would change the state. Sure, the city would get sued over this, but having a whole first-class city challenge the state's tax uniformity law would be great. It would lead to progressive taxation in the state that could make a difference for lower wage earners and it is a way to raise more revenue without hurting the majority of wage-earners.
I put "change the way we tax capital" for a reason
I like the idea of a flat-sum tax exemption in a number of contexts: wages, property taxes, BPT. It's simple, it's familiar (since many people use a standard deduction on their federal income taxes), and it's often more progressive in actuality than most progressive taxation schemes. It might be the one place where the anti-tax reformers and the social-justice progressives could, theoretically, come together. We can't abolish the wage tax, but hey -- we can let everyone earn a chunk of money without the city taking a piece. And if it works, you can make the exemption bigger and bigger. (Of course, we can still fight about whether we want/need to raise the overall rate.)
It's also pretty easy to do a back-of-the-envelope calculation of what the loss in revenue would be. For a top end, let's say there are a million wage-earners in the city, and they all make $10K or more. With the wage tax at 4% (splitting the difference people who live in the city and people who don't), that's about $400 million in foregone revenue, if you set the exemption at $10,000. That's about a third of the current revenue from the wage tax. (1.2 billion -- if I remember correctly, I haven't checked that figure. It's over a billion, though -- by far the city's largest source of income.)
So maybe $10K is too much -- at least right away. So you do what the federal government does, and what we've done with the wage tax -- walk the exemptions up. Start with $5K, with the target to hit $10K by 2015. That would be a $200/year cut now for everyone making $10K or over, and a $400/year cut in eight years.
It's also very easy to calculate what functional rate you would pay. Again, let's say the exemption were $10K.
$10K - 0$ - 0%
$20K - $400 - 2%
$40K - $1200 - 3%
$60K - $2000 - 3.33%
$100K - $3600 - 3.6%
$200K - $7600 - 3.8%
$500K - $19600 - 3.92%
There are a number of different ways that you could process the exemption without requiring wageearners to file a return; the easiest could be just to cut people refund checks at the end of the year.
We can't give up on the feds
We can’t give up on the feds, for three reasons.
First, the federal government can spend much more money than the state governments because it has a much broader tax base and can deficit spend.
Second, states and cities are limited in how much they can tax because high taxation drives capital out of states and cities. We can all disagree about how great this effect is, but we have to face the fact that our economy is largely capitalist in nature. It is not a right wing claim that there a limits on state and local taxation, by the way. That claim was and is a staple of left wing and liberal analysis of state and city governments. See, for example, Paul Peterson, City Limits and John O’Connor, the Fiscal Crisis of the State.
Third, devolution of domestic spending from the federal to the state government is not a fact of nature. There is nothing in the way our political economy works that keeps the federal government from spending more on domestic concerns. It is a fact of politics and ideology. It can be changed by a Democratic sweep of Presidency and Congress in November 2008 and a sustained ideological movement to challenge the way we have been thinking about the responsibilities of the federal government since Reagan became president.
There is a problem about funding specifically for cities, in that the majority of the population lives in suburbs. But suburbs have problems with crime. That is why Clinton was able to find federal funding for 100,000 new police officers. Many suburbs have problems with community decay and economic growth. That is why an aggressive campaign and a democratic government can give us money for new investments in community based economic development.
you're right
sorry my style has created a polemic response. I agree--of course the feds matter. Let me just repeat though what i said at the start:
That's not to say the feds don't matter, they very much do. I am just saying the buck can not always be passed to them.
Your're right, too
And thus:
1. While there may be limits on how much Philadelphia can spend directly in lifting people out of poverty, as Mayor Nutter reviews every department and program in the city, he needs to be focused on how these departments can function in a way that combats poverty. That means, among many other things,
a. City services have to be distributed in a way that improves communities and the opportunities in them. Poor neighborhoods need clean streets. They need aggressive L&I enforcement of nuisance businesses. They need improving schools. They need well maintained and adequate parks and recreation areas. They need good police protection. Right now, a combination of inefficiency and ineffectiveness, and a bias toward providing services for the upper middle class, gets in the way of providing those services. We need good, effective government. But we also need much more equal government.
b. Nutter has to take the lead in making a case for the cities. He has a potentially great ally in Chaka Fattah. They have to work together, hopefully with some Congressional leaders from other cities, to create an agenda for new federal programs for the improvement of communities and relief of poverty.
Is there a c? Is there a big new program that can reduce poverty dramatically? I don't think so. I think we need improvements in lots of areas. But perhaps someone else has another answer.
sure, new investments
.,.and dare i say taxes...
what are we doing with the expiring tax abatements that are not yet accounted for?
are the scheduled wage tax cuts a good thing? why? how directly they will alleviate poverty and create opportunity for working families?
how are we going to cut the BPT?
if government waste is going to be cut, where will the loosened revenue go?
what are our goals for new investments? better health centers who set treatment goals: like they see 70% of uninsured Philadelphians? more affordable housing unites for sale or for rent? universal after-school? what about the School District?
Circular Reasoning
What is your basis for believing the "expiring tax abatements that are not yet accounted for"?
If you are going to keep making this claim, I'll keep calling you out on it. It's fine if you want to propose all sorts of pie-in-the-sky programs, but you are the one who stated that they can be paid for with expiring tax abatements.
I'm all for handing out free money. I just disagree with your assumption that the City can afford it. And if I believed that the City could afford to just start handing out checks, I'd be right in line to propose City Council consider a "A New Deal for Philadelphia." But because I am of the opinion the City cannot afford such programs, I don't consider the policies you propose to be reasonable.
Your entire policy proposal is premised on the assumption that the City has money in the budget to pay for it. Why can't you provide ANY evidence of your assumption???
If you think the City can afford your policies, explain how. And do so by reference to specific evidence. Not just by reference to your assumption that the City can afford it.
Presently, you are assuming the very facts necessary for the success of your proposed policy. In other words, if you want us to assume the city can afford a new deal program, provide evidence that demonstrates why your assumption is correct.
Your unwillingness to provide any evidence for your assumption is particularly frustrating because you routinely demand others provide evidence to justify their assumptions. New services will create just as big a hole in the budget as tax reductions. In response to your criticism of tax reduction policies, people have come on this site and provided you concrete explanations how wage tax/BPT cuts will alleviate poverty and create opportunity for working families. As I understand your position, your position is "Despite the evidence presented by the policy's many supporters, Ray can't take the leap of faith necessary to believe that tax reductions will spur the job/business creation necessary to offset the potential decreases in city revenue." Despite the specific evidence provided to you, you don't buy the assumption that tax cuts lead to business investment and on that basis you don't support the policies urged by tax reformers.
So, the way I see it, either provide evidence for your assumptions or stop demanding others provide evidence for theirs. You can't have it both ways.
zzzzzzzzzzz
oh dewitt.
Expiring Tax Abatements...
For what it's worth, this is taken from page 7 of Nutter's "An Honest Budget Now" paper, as released during the campaign:
The italics above is Nutter's, not mine.
==================================
I'm not playin' around about it.
maybe i can't count...
but 5 years is 5 years right? so the abatements started in 1998, so the only expired abatements counted for so far are from 1998-2003? right? so what happens to the abatements that were offered starting in 2003? They'll be paid to the city starting in 2014 right? what will we do with that money then? that's what i am talking about.
I was just providing a
I was just providing a secondary source for DeWitt.
Wouldn't post-2003 revenue depend on how/what, specifically, the spoken-for funds have been used for, in terms of being one-time projects or ongoing expenses? Either way - 2014 is a long way off (with lots of time for new expenses/revenue decreases to creep in) where I come from, and he certainly has a point with respect to identifying guaranteed sources of revenue to pay for proposals.
==================================
I'm not playin' around about it.
i know this is hard to grasp
my original post is a request for our new Mayor and Council to take responsibility--as much as possible--for offering Philadelphians a New Deal. Not THE New Deal, but a new New Deal. Why? Because cities are not very well valued by the federal government right now--their traditional savior, and the federal government in general has gotten away as much as possible from large-scale progrms in favor of private contracts and block grants to states.
In that context, my posts asks city leader to find a way to fund programs that will make a real difference in the struggle to end generational poverty and to help save Philadelphia's rapidly dwindling middle class.
I am not in charge. I don't have to provide facts about revenue sources because i am not sugesting any specific spending--i am just throwing out ideas and identifying needs.
Lastly, Fran, the tax abatements are abatements from property taxes. So when the abatement ends, the property owners will have to pay property taxes every year they live in the house. That is a pretty steady stream of income. 2014 may seem pretty far away, but it's not. It will take at least 2-3 yers to plan a program for say affordable housing that the unaccounted for expired tax abatements in 2014 could be spent on.
It's not like
we won't know how much money will be coming in. So we can project additional revenues far ou tinto the future just as we can project spending.
But the further out we get two things happen:
1. We become more uncertain about these projections. Tax revenues and spending can vary a great deal with changes in the national, state, and local economy.
2. We become better able to make choices that shape the distant future. (There is less we can do about the near future.)
So the key question isn't really whether the is accounted for or not. I presume that whoever projects the city budget in the future has "taken account" of expected revenues from the end of abatements.
The real questions are
1. What is a reasonable projection of the city's budgetary shape in 5 or ten years. Is there money for new spending?
2. What choices do we make? How do we hold down spending on, say, health care without harming workers. (Start by passing RxPA, by the way.) How much inefficiency and waste is there, really, and how much can we eliminate? What taxes can we cut with the hopes of spurring growth (the BPT?) and what taxes can we increase without harming growth (the parking tax? converting the wage tax into an income tax?); What does the city do now that it really shouldn't be doing or can do less of (paying to send sending trash to landfills? subsidizing stadia?); What can the city do to bring in more money (creating commercial opportunities in the parks?; stop leaving so much grant and federal money on the table?).
I don't know the answers to all these questions. But I would be extremely surprised if we couldn't adjust things so that we could free up, say 100-200 million a year for major new initiatives five years out if we are willing to give up something else and if we are willing to be creative in exploring new opportunities for saving money and bringing revenue into the city.
That's why I think that Ray's thought experiment makes sense, even if we can't say right now where the money is going to come from.
I am sure the revenue from
I am sure the revenue from expiring tax abatements is already included in the City's projected revenues for the next five years. And based on the projected revenues which includes the increased revenue from the expiring tax abatements, the City still projects itself to be in a hole.
Also, you are the one that has proposed using this "new" pot of money to fund new programs. It should be your burden to demonstrate that this so-called "new" money that your entire premise relies upon is in fact "new" money and not already included in the City's budget projections.
And if you're not able to do exactly that, your proposal amounts to nothing more than a bunch of rhetorical hot air.
I think it is fair
to point out lack of defined revenue as a (even potentially fatal) shortfall of calling for a new New Deal. Sure.
But I have been thinking a lot about how annoying the Barack Obama call for 'hope' is to me: that whole rhetoric of hope, optimism, and faith. It is so contrary to what I feel like this cultural, political, and historical moment calls for.
And yet I KEEP finding myself saying, "but I am hopeful that..."
...That Barack Obama will surprise me by his progressiveness if he gets elected. ...That Michael Nutter will do the same once he takes power.
The one aspect of the hope rhetoric that I find really compelling, as much as it otherwise annoys the hell out of me, is that there is benefit in us jointly acknowledging how far we have to go, how big the goals are. Putting this seemingly impossible stuff on the table.
Call it rhetorical hot air, but I think there is real benefit to it and it is the first step to opening the productive conversation that actual change comes out of.
So back to what I like about this website: productive conversation: what are the possibilities for creative revenue sources? What are the limitations? Are the success stories with other cities? Pretty vague, but lots of people reading know more than me.
what do you do when a blow-dryer...
...says you are full of hot air?
hot air
I agree that there is definitely something to be said in favor of "hot air" in and of itself. But Ray seems to constantly call out people for not providing details of their plans yet never holds himself to the same standards.
I'm just saying that if Ray is going to constantly demand that people come to YPP and provide the details of their plans to do such and such, he ought to be prepared to do the same when he comes forth with pie in the sky stuff.
so here's the deal
i appreciate the power you attribute to me, but my posting style is very pass the buck, on purpose. i do what i can to make change, but i know that implementing a New Deal for Philadelphia is a bit beyond me.
And DeWitt, I am so sorry you feel attacked. As I said to a few weeks ago, I believe you that the five-year fiscal plan includes revenue from expired tax abatements, but i could not find it, and thus don't have the details on how significant that is.
Frankly does not matter than much to my point, because the big money (post-03 abatement money when I think the boom really began to take off in local real estate) is not accounted for yet. And even if it is, are we really saying that Mayor Nutter is married to a fiscal plan created by Mayor Street? After all, Nutter-supporter Brett Mandel has been very vocal in his criticism of Mayor Street for hiding revenue. I am sure there is some room for flexibility--but it's really up to a revenue expert--which neither of us is to figure it out.
I stand my earlier point, which is not undetailed at all, that I want to know if the will to address poverty and the loss of the middle-class, and the growth of a super-rich Center City elite, is there.
It's true
Ray asked me to come up with a plan for fixing the affordable/public housing shortage
Point is . . .
And, I appreciate DeWitt's comments, if anyone here had to actually prove or show money for half of the stuff we write about as a prerequisite, we wouldn't be writing much.
Many of us are dreamers. Some may never see the City's budget. Others may not have the time to do the research into what our suggested programs will cost. But, one thing I like about YPP is that we can all, collectively dream about something, and then fight about the specifics.
Ray may ask for details from us, and it is completely fair to ask details from him. But, hardly any of us can provide the specificity each other wants. I wish I had the time to research what I like, but today alone I have to coordinate discovery with local counsel in New England, research a point of law, try and settle a case and still be responsive to the partners and clients. I think, all you have to do is change the job function and many of us are in the same boat.
The points of Ray's post that resonate to me, however, are how do we solve the issue of generational poverty and a shrinking middle (and possibly working) class here in Philadelphia. Both of these issues need to be dealt with. And, is Philadelphia able to do it on its own. I think that is the crux of the issue.
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
From Michael Nutter's housing plan
on renewal, rather than the expiring money, but still:
I very much agree with Ray, though I wish I had more finance knowledge or vision to know where the money can come from. But as with the ongoing housing programs expiring NTI bond dollars were used for, we need to find the money if the federal government doesn't provide it. Along with the enforcement push to lower crime, an aggressive New Deal-style jobs and economic development program is absolutely necessary if we are going to have a sustained turnaround on the crime numbers and the social dislocation that is behind them.
I agree, with Ray, in part.
And, I think we can all agree that money has to come from somewhere.
Philadelphia, and other similarly situated cities, walk am extremely thin finance tight rope. There is over-competition for places to live, work and do business. The question is, how do we walk the tightrope and get everything we want.
That is a very difficult thing to do.
But, with a new revenue source, potentially, coming in, why not think big.
I am working to elect Larry Farnese to the General Assembly. Unless otherwise expressly stated, this and every comment or blog I post on YPP and any action I take hereon is solely attributable to me and not Farnese or Friends of Farnese
Just to throw it up, here's Nutter on property tax reform
As Mayor, I will promote a property tax system that treats people fairly, is predictable, and easy to understand.
The biggest difference between black and white working families is the value of their assets and for most Americans their biggest asset is a home. Research shows that African-American households have about one-eighth of the wealth of white families with similar incomes, and most of that wealth difference comes from differences in homeownership rates and housing values.
Around the country, policy makers look for ways to increase the assets of working families to help secure their entry into the middle class. In Philadelphia, we are in the middle of the largest wealth-creation cycle we've ever seen: the enormous increase in housing values that neighborhoods throughout the City are experiencing. Those rising values are very good news in a City that leads the nation in homeownership rates (Philadelphia is almost 60 percent; New York is 30 percent.)
But there?s a problem. Rising values can mean rising property taxes. That turns good news into bad news and changes the headline from 'Philadelphians growing wealthier' to 'Philadelphians fear gentrification.' My Better Housing Now Plan protects Philadelphians from the pressures of rising property taxes while preserving the benefits of rising property values.
For many low-income residents or elderly residents on fixed incomes, any significant rise in property taxes may make their homes immediately unaffordable. Philadelphia does have a program for senior citizens on fixed incomes who can apply to delay paying taxes until time of resale. However, this program is only available to very low-income people. There is no program to ensure that all low and moderate-income residents can afford to stay in their neighborhoods and benefit from the increased value of their home equity.
For years, the city of Philadelphia has had an inefficient and unjust property tax system. Because of years of an ad hoc and piecemeal process, identical properties have widely different assessments. As a result, neighbors on the same block pay very dramatically different amounts in property tax. This is wrong, and it is bad for the city, because it impedes new investment. For this reason, I support a fair and accurate city-wide property reassessment. However, this is only one step in the process. The Board of Revision of Taxes sets the property values. It is the Mayor and City Council that set the tax millage rates. This must be done carefully, so that the reassessment does not harm our residents.
As Mayor, I will work with City Council to implement two-part reform of our property tax system.
• First, I will propose and work with City Council to enact a homestead exemption that will exclude some fraction of assessed value from taxation for all property owners. The value of the exemption will be calculated to have minimal impact on overall revenue generated by the property tax and will make the property tax progressive.
• Second. I will propose and work with City Council to enact a cap and deferral plan for paying property taxes that will protect property owners from unreasonably large and rapid increases in their taxes. Under my plan, no property owner would ever face an increase in their property tax exceeding 10 percent in a single year. Property owners who qualify on the basis of low and/or fixed incomes would have lower caps, including zero increases for very low-income owners. In all cases, the amount of tax owed by the property owner above the capped amount would be deferred until the sale of the property.
This two-part reform will allow people to participate in the enormous appreciation in property values underway in many Philadelphia neighborhoods while preserving peoples' option to stay for as long as they want. Philadelphia is in the middle of an enormous wealth-creation cycle and the biggest beneficiaries are the long-time residents who have held on during decades of decline. Now that Philadelphia real estate has increasing value again, I want to make sure all Philadelphians benefit.
Progressive Exemptions
Nutter's proposals for capping property tax increases are really spot on. One of my problems with the anti-property tax sentiment in the city is that justifications for the bottom end (senior citizens on fixed incomes) are used to protect a rise in rates for the top end (large commercial propertyholders). Essentially, it's a targeted tax cut that actually helps the people it is supposed to help. And everyone gets some assistance, without the revenue being cut altogether.
Re: Ray's broader points above, I wonder whether this approach could work for taxes like the wage tax and the BPT. If you add a broad exemption -- I don't know, say the first $10,000 in wages or the first $100,000 earned by a business (note that these are numbers plucked out of thin air) you can make the taxes more progressive and reduce the overall tax burden but avoid the complications of a fully graduated rate system a la the IRS.
This doesn't mean that we still couldn't/shouldn't have rate decreases at or near the top, to prevent the flight of larger industries and white-collar workers, but they could be much more gradual, and the overall hit to the budget could be much smaller (since you'e not dropping the percentage as fast). You could even have a different kind of incentive structure for larger, more profitable businesses-- say, a larger BPT exemption to companies who pay all of their workers above the prevailing wage.
This wouldn't necessarily make the tax code unduly complex, or uncollectible the way much of the property tax is now. And everyone gets a very tangible reduction in their taxes.
You are a genius Tim
This is exactly what the folks at the Keystone Research Center have discussed as a solution to the lack of progressivity at the state level. There's some debate about whether or not it would stand up to a constitutional challenge, but the point is no one has tried it.
If Mayor Nutter and Council, raised rates, or stopped wage tax decreases, but introduced an exemption like this, most people in the city would see a decrease in taxes, or no increase, and yet revenue would increase.
This would be a great plan in a New Deal for Philadelphia and only the City could do it and then defend it in court.
This is seriously a brilliant idea.
re: complications
PS- The lack of progressivity in local and state PA taxes is not about any implementation burdens: progressive taxes are flat out illegal according to our state constitution.
Sigh to that
but anyway, really really exciting, this stuff.
The New Deal idea is good
The New Deal idea is good because it brings us back to what it means to be DEMOCRATS! I remember Stevenson's run for president and Robert Kennedy's campaign. In Philadelphia, we should be thinking along those lines again. I must part ways with any line of thinking that has the city addicted to casino revenue for future projects and programs, however. If we swallow that pill, we will forever be hooked on the medicinal value of predatory money. Years from now, when we need more schools built, will we add table games? Or when we want to host the olympics, will we simply sell another license to gamble? Slippery slopes are slippery for a reason. No?
Talk of new New Deals from the Washington Post
Editorial: A Different Recession.