Just two days after Mayor John Street's annual budget address, City Controller Jonathan Saidel came to Penn yesterday to introduce his tax structure analysis report -- a powerful appeal to sharply reduce city taxes.
That appeal stands in contrast to the mayor's budget proposal, in which he urged that future tax cuts, including those to the wage tax, be reduced.
An audience of nearly 80 people gathered in Steinberg-Dietrich Hall to watch a heated panel discussion on Saidel's plan. The other panelists joining Saidel were West Philadelphia City Councilwoman Jannie Blackwell, Pennsylvania Economy League Executive Director David Thornburgh and E-consult Corporation Principal Stephen Mullin.
"The alternative to not reducing taxes is extinction of the city of Philadelphia," Saidel said.
He identified heavy city taxation as the major hurdle for entrepreneurial spirit and the expansion of businesses in the area.
"The Philadelphia I grew up in is totally different from the Philadelphia today," Saidel said, describing an idyllic picture of orchards and horse farms, which eventually turned into "devastated neighborhoods."
Saidel said that back when he was growing up, people were not driven out to the suburbs by high real estate taxes in the city.
According to Thornburgh, taxes constitute 50 percent of the cost of living in Philadelphia.
"That puts the city at a gross disadvantage," he said, emphasizing that the tax reduction policies suggested by Street in his budget address only benefit a small number of residents.
"Taxes are controllable; they are within our power to change," Thornburgh added. "If we do change them, they can quickly and dramatically change the choices people are making" about living in the city.
While acknowledging that "whenever we tax something, we discourage it," Mullin warned that calls for dramatic changes ultimately decrease the political feasibility of Saidel's report.
Mullin further emphasized that any tax reform must be absolutely consistent with city revenue.
And the lack of such unison is the city government's primary reason for denouncing Saidel's plan.
Blackwell said that as soon as Street and City Council President Anna Verna read the report, "They dismissed it. We really have a lot of work to do... to convince them."
Saidel requested that City Council give him a public hearing so that he could present his report to them.
Although all council members endorsed a public hearing of Saidel's proposal, it was postponed due to procedural delays.
Saidel reacted to these circumstances by saying, "I try not to spend time at City Hall unless I have to."
Saidel criticized the tax aspects of Street's new budget and dismissed claims that Philadelphia cannot afford the suggested tax cuts.
"This is a kneejerk reaction," he said. "What we cannot really afford is not reducing taxes."
Still, Saidel remains confident about his ideas.
"The greatest strength of my report is its common sense," he noted. "Its greatest weakness is that government seems to be imperious to change."
"All of this is about trying to create a climate for development, and that is why I am interested in" the report, Blackwell declared.
Chris Patusky, Deputy Director of the Fels Center of Government at Penn, is one of the co-authors of the report.
Good taxation "is one of the three most important issues facing the city today, along with land transport and school systems," he said.
Those in attendance clearly recognized the relevance of the issue, and while Saidel's ideas for reform were quite persuasive, some audience members still raised valid concerns about the application of such a substantial tax reform.
"A lot of different points of view were aired today, and I am really pleased this is a time of discussion," said Penn Professor John Kromer, who organized the presentation for his Urban Studies course "The Politics of Housing and Community Development."
"This kind of debate that is happening in Philadelphia now is not going on in any other city," Kromer added.
