By Tom Waring
Times Staff Writer
The Philadelphia Tax Reform Commission has been meeting regularly to examine business, wage and property taxes.
It’s too soon to tell if a consensus is forming.
“Right now, I’m not for or against anything,” said Ed Schwartz, a Mount Airy resident and chairman of the commission.
Schwartz, founder of the Institute for the Study of Civic Values, and the other members of the 15-member commission are looking forward to May 15, when a public hearing will be held at City Hall.
The tax reform commission was created last November, when 80 percent of voters approved it in a referendum.
Members were sworn-in at the beginning of 2003. Since February, the reform commission has heard from Wharton School economist Robert Inman, state budget secretary Michael Masch, Board of Revision of Taxes chairman David Glancey and others.
The commission has broken down into working groups to examine specific tax issues. The discussions have been civil.
The TRC serves as an advisory panel. Any recommendations it makes must be approved by City Council and the mayor.
Its deadline to issue a report is Nov. 15. There must be at least 10 votes to pass any recommendation. That will be followed by legislation at the city level and policy recommendations at the state level.
The mayoral election is set for Nov. 4. The commission will present an opportunity for Mayor John Street and challenger Sam Katz to comment on its findings, since a preliminary report will be issued in the early fall.
During the next six months, there will also be town meetings.
The two local residents serving on the commission — Fox Chase resident and Northeast Philadelphia Chamber of Commerce president Al Taubenberger and West Mayfair’s Tom Forkin, an attorney and president of the American Street Erie Avenue Business Association — will make sure there is one meeting in the Northeast.
The commission — whose members serve without pay — might also comment on Gov. Ed Rendell’s budget proposals, which include property tax decreases everywhere but Philadelphia. City residents would enjoy a cut in the wage tax but would be hit with a hike in the state income tax.
The ballot question creating the commission was placed on the general election ballot following the heated battle to preserve tiny wage-tax cuts. Street tried to stop the wage-tax cuts, but Council voted to keep them in place.
Street has four appointments to the commission. The president of Council also makes four appointments. One member each is appointed by the city controller, the chief executive officer of Greater Philadelphia First and the heads of the Greater Philadelphia, Greater Northeast Philadelphia, African-American, Hispanic and North Philadelphia Chambers of Commerce.
It’s a volunteer group with a diverse membership.
“The common goal is to help the city,” Schwartz said.
Schwartz and Taubenberger, the vice chairman, visited the Times editorial board last week to give an update on the commission’s work.
“We absolutely have to get the tax situation under control,” said Taubenberger, who has headed the local Chamber of Commerce for 11 years.
Schwartz, a Democrat who served as an at-large member of City Council from 1984-87, said the TRC’s mission is to reduce the tax burden in a fiscally and socially responsible way. He knows there will be costs and consequences to any recommendations.
Few will argue that Philadelphia’s taxes are not high.
The wage tax for city residents is about 4.5 percent. Schwartz, noting that suburban communities tax their employees no more than 1 percent, labels the city wage tax as a “badge of dishonor.”
The city realty transfer tax is a whopping 3 percent, with another 1 percent going to the state.
The city sales tax is 7 percent, while most of the rest of the state pays 6 percent.
There’s a 10 percent tax on the retail price of alcoholic beverages. It was imposed after a bitter battle in City Council in 1995, but opponents haven’t bothered to try to repeal it.
While those taxes are high, the city argues that it needs the revenue for its general fund and for the School District of Philadelphia.
The commission has to balance that with the city’s need to remain competitive as it tries to attract and maintain jobs, businesses and residents.
Taubenberger, who also serves as president of the Burholme Community Town Watch and Civic Association, is grateful that Schwartz has welcomed his input as a resident of the Northeast. He’d like to see recommendations that are well thought-out, not reactionary.
For instance, Taubenberger is lukewarm toward City Controller Jonathan Saidel’s land-value tax proposal, noting that many homes in Burholme and Fox Chase that have yards would experience a property-tax hike.
Taubenberger, pointing to the loss of residents and manufacturing jobs, wants to see the city grow. It won’t happen under the current tax structure, he argues.
“People are leaving, and not a whole lot of people are coming in,” he said.
Schwartz insisted that the commission would not stand for the status quo.
Meaningful tax reform will be hard, the commission chairman said, but not impossible.
“The question is, ‘What is the cost?’ ” ••
The Philadelphia Tax Reform Commission will hold a public hearing on Thursday, May 15, from 1 to 8 p.m., in Room 696 at City Hall. Anyone interested in testifying can call Robin Leary at 215-686-2142. Written testimony is also welcome.
Reporter Tom Waring can be reached at 215-354-3034 or twaring@phillynews.com