PHILADELPHIA—Councilmembers Kendra Brooks (At-Large) and Jamie Gauthier (3rd District) issued the following statement on proposed cuts to the Business Income & Receipts Tax (BIRT) and the City’s wage tax that passed out of City Council’s Committee of the Whole today:
“We will be voting no on tax cuts that will lead to cuts in city services. These cuts will benefit wealthy companies and make it harder for the City to provide the services that working-class Philadelphians depend on, from after-school childcare to affordable public transportation. These tax cuts will cost the City millions in revenue, and will result in less than $20 in annual savings for a low-wage worker in Philadelphia. Instead of leveling the playing field, these cuts deepen the gap between the rich and the rest of us.
“Tax cuts lead to service cuts. The proposed cuts are permanent and recurring, and will lead to $170 million in lost revenue over the next five years alone. With no plan to replace that revenue by reinstating PILOTS or the Philly wealth tax, we must ask: What services will the City cut?
“$170 million over five years is what it costs to do each of the following:
- Keep 255 full-time teachers in the classroom – at least one per school!
- Hire 18 Streets Departments teams to clean our streets and address illegal dumping
- Repair over 11,000 aging buildings to turn them into affordable homes and make neighborhoods safer for everyone
“We believe that City Council can and must make it easier for small and medium minority-owned businesses to operate and succeed in the city. That includes investing in city services and staff to make it easier for diverse entrepreneurs to get off the ground and succeed in their first few years. It includes investing in more staff for L&I so it’s easier for small businesses to get the permits they need to expand. It includes investing in more frequent street cleaning and repairs, more green spaces, and more pedestrian-friendly corridors where new businesses can thrive. It includes streamlining City processes and improving inter-agency coordination and communication. We cannot make these investments while also cutting taxes.
“We know, for example, that illegal dumping is a top concern for Philadelphia residents and businesses alike. But instead of funding four additional Streets Department teams to address illegal dumping, at a cost of $36 million over five years, the City is choosing to cut taxes that will result in $170 million in lost revenue. Given the overwhelming support for quality-of-life improvements, this course of action is both unpopular and unsustainable.
“It strikes us as fiscally irresponsible to decrease our revenue at a time when federal American Rescue Plan funding is about to run out and economists are forecasting recession.
“Taxes in Philadelphia are not significantly higher than other major cities, and cutting taxes does not lead to job growth or help families escape poverty. The cut in the wage tax will save low-income Philadelphians less than $20 per year, but will mean thousands of dollars for people like Brian Roberts, CEO of Comcast, who already has millions. We do not believe that this wealth will “trickle down” to local families. Cutting taxes in the hopes of creating jobs is an approach that has not worked when Republicans have pushed it in the past, and it will not work in Philadelphia.
“If we are serious about reducing the tax burden, we could give low-income Philadelphians automatic refunds on their City taxes. City Council already passed a law exempting low-income residents from paying the City Wage tax, but very few Philadelphians actually completed the complicated paperwork necessary to get the money they were owed. Making these refunds automatic – just like automatic state and federal tax refunds – would be the most effective way to reduce the tax burden on working families.
“In our first term in City Council, we have worked to expand the services that improve the lives of Philadelphians and make our city a cleaner, greener, and safer place to live and do business. We have fought to open libraries and rec centers on weekends so that young people have safe, welcoming spaces to spend time. We have fought for more streetlights, more green spaces, and more Streets Department teams to clean up illegal dumping. Unlike tax cuts, these are proven, effective ways to reduce crime, prevent violence, and make the city safer for all of us.
“As parents, we know that when families are deciding where to raise their children, well-staffed schools and accessible community spaces like libraries, pools, and rec centers are far more important factors than wage tax cuts worth less than a week of summer camp. We know that small businesses seek out locations that are safe and clean, with reliable municipal services and plenty of pedestrian traffic. We have seen this revitalization happening in pockets of the city, and we know that expanding it will take real investment in the neighborhoods that need it most.”
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Background:
Email from Inclusive Growth Coalition
Kenney’s budget proposal: $150 million in lost revenue over the next 5 years
Losing $150 million over 5 years could mean losing:
= 223 full time teachers – one in every school!
= 466 special ed assistants – two in every school!
= having libraries and rec centers open on Saturdays
If we have $150 million to spare, we could use it to:
= add 16 additional Streets Department teams to clean up illegal dumping
= open libraries and rec centers on Sundays
= hire 223 additional full time teachers – one in every school!
= hire 466 additional special ed assistants – two in every school!
Numbers:
Teachers = 134K per teacher per year
Librarians = 134K per teacher per year
Special Ed assistants = $64K per asst per year
Streets Department team to address illegal dumping = $1.8 million per year
In the mayor’s budget, the cost of expanding to 6 day service for neighborhood library branches is $10.7 million more in FY24 and 51.3 million over 5 years.
The amount of money spent on Parks and Recs employees in FY 24 is $65.7 million.
Fixing up homes: According to Rebuilding Together, badly damaged homes need $15000 in repairs.
