Five Ways Mayor Kenney Can Shore Up the Budget Without Tax Hikes
If city government is serious about funding public education, it needs to stop acting like there’s no other way than overtaxing working-class Philadelphians.
That’s basically what Mayor Jim Kenney said on Thursday during his annual budget proposal. As with most of his excuses for tax increases, the mayor’s justification is the need to fund public education. Under Kenney’s plan, Philadelphians can expect property and real estate transfer tax increases, as well as an effort to slow the planned reduction in the wage tax rate.
Highlights from the budget include almost $100 million going to the Philadelphia Police Department over five years, as well as a $20 million increase over five years for drug overdose prevention programs. City Council members are having mixed feelings about the plan, and we can only hang tight for an epic hearing showdown in the weeks ahead.
But as someone who watched the melodrama of the soda tax saga carry on until a climactic bait-and-switch plot twist, I refuse to be bamboozled again by another year of Kenney’s lackluster budget proposals. If city government is serious about funding public education, it needs to stop acting like there’s no other way than overtaxing Philadelphians. Guilt-tripping working-class citizens into paying more than their fair share for public services is a tired trope being carried out by a progressive administration that should know better. There will never be a magic-bullet taxing solution to increasing local funding: It’s going to take fiscal maturity, social responsibility, and corporate accountability.
Here’s some major ways the city can strengthen its budget without overtaxing everyday people.
Cut wasteful municipal jobs.
With a workforce of around 27,000 full-time and part-time employees, our local government is one of the city’s biggest employers — that’s twice the number that Comcast, Philly’s largest private company, employs in the city. Seriously, how many deputies and assistants do we need for every new commission and department being launched each year? Taxpayers hand over nearly $1.6 billion annually to fund all of these jobs. If we reduced the salary budget by just 5 percent, we would have an additional $80 million in our coffers.
Beef up accountability at the Department of Revenue.
Everyone knows that paying taxes in Philly is a joke. Hundreds of millions of dollars have gone uncollected by the Department of Revenue, primarily for delinquencies in liquor, property, business, and wage taxes. Our city is so terrible at collecting money that even an elected official like DA Larry Krasner can describe his lien for more than $10,000 in unpaid taxes as an “oversight.” What’s the point in enforcing new taxes if you can barely get the money owed from the existing ones? The city needs to spend more energy confronting the Department of Revenue on what’s already owed rather than making Philadelphians keep paying more to supplement the dysfunction.
Put more pressure, not less, on the PPA.
The Philadelphia Parking Authority seems toothless when it comes to scofflaws. Hundreds of millions of dollars owed on parking tickets could be providing increased revenue to our schools, but are instead being delayed or ignored by motorists, and eventually excused by City Council. (Because the PPA is a state-run agency, the city does not regulate it directly, but it does control the appeals bureau that decides whether tickets and fines are dismissed.) Pa. auditor general Eugene DePasquale claims that the PPA has caused the School District of Philadelphia to miss out on roughly $78 million in the past five years — and the agency reportedly has failed to collect $580 million in outstanding parking tickets and associated fees since 1990. What’s the point of having an organization that’s supposed to help fund our schools if its debtors are given a free pass?
Eliminate the DROP program — no excuses.
The Deferred Retirement Option Plan program is a perfect example of an idea that sounds great in theory, but terrible in practice. The program, proposed by former Mayor Ed Rendell in 1999 to retain top talent on the job longer, has now led to some workers abusing the process by timing their retirements to get the maximum pension payment and DROP payout. Making matters worse, there’s a loophole that allows for elected officials to run for re-election and resign for a day to get their payout and then immediately return to public office. Known in some politico circles as “the DROP Queen,” former City Councilwoman Marian Tasco collected a $478,000 DROP payout in 2011 after retiring on the final day of her then-previous term, only to be sworn into a new term shortly after. This loophole is costing the city millions of dollars and fattening the pockets of people who have no intention of retiring. Ending DROP would greatly preserve taxpayer’s dollars and reduce an excessive abuse of resources. Since its inception, $1.4 billion in taxpayers dollars have been given out through DROP, including $104.6 million in 2016.
Make corporations pay their fair share in taxes (or at least something more than what they’re currently doing, for crying out loud).
Look, something’s gotta give: With all of these eds and meds, booming tech companies, and media corporations, Philly should be getting more from these institutions than just promises of job growth and economic impact. As our city grows in viability, we should be scaling back on the over-the-top business incentives we have been pitching to major companies. And even though many argue that tax abatements have helped put the city on the map, now that we are on it, we shouldn’t be making the same deals. Reducing tax abatements and strongly encouraging mega nonprofits to partake in PILOTs (Payments in Lieu of Taxes) — we would definitely help evenly spread out the revenue burden. Philly could stand to make an additional $13 million if we collected PILOTs — which wouldn’t do much for our massive budget, but would definitely make a dent in public school funding.
This post has been updated to clarify the number of employees who work directly for the City of Philadelphia and their total salary numbers, as well as the regulatory relationship between the PPA and the city.