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Stunning Wage Tax Revenue Growth Threatens To End City Fiscal Crisis
Submitted by RepMarkBCohen on Wed, 12/17/2008 - 6:29am.
Just as the battle lines are hardening, newly compiled figures on wage tax revenue growth threaten to end the battle over the mayor's proposed cuts by giving the mayor a good reason to delay them.
For the first five months of the current fiscal year, buoyed by a strong showing in November, wage tax revenues are $24,404,000 OVER projections. Assuming the $4,881,000 per month surplus over expectations continues through the remaining seven months of the fiscal year, the city would wind up with a $58,571,000 surplus above expectations in wage tax revenue for the fiscal year.
That is not the most optimistic way to make the projections. The city is collecting wage taxes at the rate of $125,141,400 a month. Assuming that monthly pace continues, the the city will wind up $342,978,000 AHEAD of its total revenue projection of $1,158,586,000.
My theory is this: many people are so consumed by economic anxiety that they are accepting all overtime offered and accepting job offers they previously would have rejected.
The growth in wage tax revenues is not the whole sgtory: sales taxes and transfer taxes are falling below projections and eating up most the wage tax revenue surplus. But, even so, with these three taxes combined, the city in the first five months of the fiscal year is $4,209,000 above its projections. This annualizes out to $10,221,600 above its projections.
These healthy numbers are consistent with state figures, showing large growth in income taxes in November. It was the state figures that prompted me to request the city figures.
Property tax collection figures will not be recieved by the city until the end of February, and business privileege taxes will only be coming in at the end of April, and the amount will not be certain until the summer. And the pension fund, like virtually all pension funds virtually everywhere, needs a good stock market rally.
But it is clear that the city financial situation is not as bad as it was initially feared, and the combination of federal economic stiimulus programs and sagging oil prices may well make many or all of the city's projected service cuts unnecessary.
How can your calculations be
How can your calculations be so different from Nutter's? Are your sources different somehow?
same question
How is this possible?
My Source For Revenue Numbers Is Finance Director Rob Dubow
My source for revenue numbers is City Finance Director Rob Dubow, who faxed the numbers I quoted to me at 2:22 p.m. yesterday afternoon.
The simple arithmetical calculations that I made and fully explained above are my own.
Why are you hearing these numbers from me and not directly from Mayor Nutter? Because these numbers support the position that the cuts are unnecessary, a position I hold and he does not.
To give the Mayor credit, I got these numbers from Dubow after asking the Mayor for them.
So.
Can you clarify the whole "$342,978,000 / $1,158,586" thing?
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- All politics is local.
Three Zeroes Were Dropped From the Wage Tax Revenue Projected
Three zeroes were dropped from the wage tax revenue projected to be collected: that number should read $1,158,586,000, or $1.158 billion.
The increase that will be realized if revenues continue to come in at the same pace the last seven months as in the first five months is $342,978,000 or 342.978 million.
I wish there was an online link for the material that was faxed to me, but there is not. I apologize for my weak early morning proofreading.
the the city will wind up
I'm pretty darn sure these numbers make no sense. It's impossible that even the most incompetent person could be off by a magnitude of 300+. Some of the other numbers also seem to have dubious relation to each other.
Any chance there is any hard data to back this up so people can double check these figures?
Seems like this:
Seems like this: http://www.picapa.org/docs/Monthly_Tax_Updates112008.pdf
Patrick Kerksta did ask about this a while back: http://www.philly.com/philly/news/local/35698184.html
yeah - that does seem like a funky number
I'm thinking maybe it should have been 342,978 ahead of 1,158,586?
perhaps that's the real
perhaps that's the real "sgtory".
Wage Tax Revenues and others
This goes back to the Saidel assertion that wage tax cuts will bring in more revenue. Although supply-side is less demonstrable at the macro/national level, on the local level it makes a heck of a lot of sense: the defined area lowers its tax, so capital and labor, like water flows into it. yet, the PICA report is nowhere near as glowing with the data as I see here. Is there another source?
Let's also keep in mind that real estate tax revenues are up according to the Mayor and PICA, as they are nation-wide.
www.ourcommonwealth.org
WHAT?
no. srsly. what?