Philadelphia – Today, Philadelphia City Council unanimously passed legislation to require a regular review of tax benefits offered by the City of Philadelphia. The legislation aims to improve exemption and incentive programs by analyzing the City’s existing benefits, as well as those offered in other comparable cities in an effort to measure Philadelphia’s competitiveness.
“Taking the time to thoroughly assess what we are doing as a government to help generate economic growth both in the city and the region is a good business practice, similar to a performance review,” said Councilman Allan Domb (At Large) who sponsored the legislation. “The purpose of this legislation is to ensure that the available programs are effective and that we our maximizing our resources; and, if not, hopefully have a better understanding of what needs to be improved. Ultimately, the goal is to help put Philadelphia in a competitive position to continue to be an attractive place to live, work, and do business.”
“A number of research studies have called into question the economic value of tax incentives to states and municipalities. I’m grateful to my cosponsors, Councilman Domb and Councilman Greenlee, and to the full Council for approving this bill today,” Council President Darrell L. Clarke said. “As we enter a new period of political uncertainty, every revenue dollar is precious and every foregone dollar must be accounted for. Regular reporting on job creation and other metrics tied to tax incentives will empower City Council to use tax incentives more judiciously and strategically.”
According to a Pew Charitable Trusts report issued in August 2016, “Philadelphia has 21 city-approved business tax reduction programs or provisions, the most among the nation’s 30 largest cities.” The report also acknowledges the City does not regularly evaluate its programs which lead to hundreds of millions of annually foregone revenue. Now, as a result of the recently passed legislation, the City’s Department of Commerce will commission a third party to do the evaluation and issue a detailed report.
“We were happy to work with Councilman Domb on this bill,” said Commerce Director Harold T. Epps. “This report will serve as an important baseline for the Department of Commerce’s business attraction and retention efforts moving forward. By evaluating the use and success of current incentive programs, along with reviewing programs in other cities, we will be able to better strategize to make Philadelphia more competitive.”
The first report is due to be provided to Council by June 30, 2018 with future reports due every three years.
Councilman Allan Domb is serving his first term as an At-Large member of Philadelphia City Council. He is chair of Council’s Committee on Housing, Neighborhood Development and the Homeless. More information at phlcouncil.com/AllanDomb
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