Philadelphia's taxation without cessation

Neighborhood representatives urged City Council to avoid further tax increases last month as members worked to draft the latest city budget. ED HILLE / Staff Photographer
Neighborhood representatives urged City Council to avoid further tax increases last month as members worked to draft the latest city budget. ED HILLE / Staff Photographer
Posted: July 03, 2012

Another city budget season has come and gone, and, for the fifth straight year, Philadelphians will endure more tax increases even as the city's long-term fiscal challenges remain unresolved.

With the murder rate on the rise, "rolling brownouts" limiting Fire Department resources, and adored-but-underfunded parks struggling to do more with less, this latest budget represents more than a missed opportunity; it's a tragedy worthy of Shakespeare. All the hand-wringing, missed deadlines, and brinkmanship ended up amounting to what the Bard's Macbeth called "sound and fury, signifying nothing."

The annual preparation of a city budget should mean an effort to document the citizenry's good intentions, express our shared civic aspirations, and provide the government with the tools and direction to address the challenges that confront us. This latest installment did little to advance any of those causes.

The public was never afforded a chance for meaningful participation and input in the formation of this budget. The city never set goals for service delivery or weighed options and trade-offs to inform our budget choices. Mayor Nutter simply handed us his budget, and from the time it was presented, last winter, until City Council passed it, last week, it changed only at the margins.

There was a time when the mayor embraced the idea that public deliberation should help shape the budget. But this year, that idea did not even get lip service or platitudes. It was the mayor's plan, take it or leave it.

Money for nothing

This year's budget debate was bogged down in discussions of whether to move forward with the mayor's plan to reassess properties under the Actual Value Initiative — without informing Council or the public of the "Actual" or the "Value." While this is a much-needed plan to make the city's real estate taxation fair and accurate, Council's decision to delay it for a year was wise under the circumstances. But city leaders and citizens spent far too much time on that subject at the expense of everything else.

Now, after yet another increase — on top of two previous increases that were originally billed as "temporary" — Philadelphia property owners are paying close to 20 percent more in real estate taxes than we were in 2010. And owners of commercial properties are being whacked with a hike in the use-and-occupancy tax on top of the property-tax increases.

So the cost of living and doing business in Philadelphia has increased substantially in recent years, but for what? Few would suggest that the extra money has purchased improvements in the quality of our lives or of the marketplace.

Taxation without cessation

As usual, the budget is too concerned about counting how much we plan to spend instead of tracking what we accomplish with that spending. Think Philadelphians are glad that the Phillies are among the top-spending major-league teams? No, we just want wins. (Desperately!) Similarly, we don't want more public-safety spending; we want fewer murders and fire deaths. But nothing in the budget or in the debate that surrounded its adoption suggests it will produce the results citizens want.

Meanwhile, the city's long-term fiscal problems are greater than ever. The costs of employee benefits (especially costs associated with unfunded pensions) continue to grow. The city plans to spend approximately $113 million more than it did last year, and $90 million of that increase — nearly 80 percent — is expected to go to the rising cost of benefits. The mayor, however, has advanced no innovative thinking on this issue, nor has he engaged in meaningful negotiations with the city's white- and blue-collar workers (who have been working without a contract since 2009) to try to address the crisis.

The solutions to the problems Philadelphians endure every day will have to wait for another budget. They are being put off for, as Macbeth put it, "tomorrow, and tomorrow, and tomorrow."

We can do better today, though. We can transform the budget process into a meaningful effort to articulate the purposes of city government and to hold it accountable for results. We can negotiate with city unions. We can consider creative solutions like asset sales to address long-term pension problems. We can reduce our need for taxation without cessation by collecting delinquent taxes and embracing technological advances to make the tax structure fairer and less burdensome. We can budget to make Philadelphia the city it should be.

Brett Mandel is a former candidate for city controller.

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