By Tom Waring
Times Staff Writer
The Tax Reform Commission has completed its work, and it’s time for City Council and the Street administration to either accept or reject the panel’s findings.
The 15-member commission last week unveiled a series of proposals that, among other things, cut business taxes and wage taxes.
The biggest proposals in the package include the gradual elimination of the business privilege tax, a decrease in the wage tax to 3.25 percent and improvements to the real estate tax assessment system.
“It’s a win for everybody — property owners, wage earners and businesses,” said Tom Forkin, a Mayfair resident and commission member.
Forkin and his fellow commissioners voted, 14-1, to accept the TRC’s recommendations during a Nov. 18 event at the Academy of Music. The only dissent came from Jonathan Stein, of Community Legal Services, who wanted a greater wage cut for poor people.
Last week’s vote came a month after the commission announced its interim report. At the time, Mayor John Street’s campaign said he’d have to study the report. Republican challenger Sam Katz endorsed the recommendations.
At last week’s event, commission chairman Ed Schwartz presented the 135-page final report to Janice Davis, head of the city Department of Finance. Davis said she would analyze how the proposals would affect the budget.
An early indication of the city’s opinion of the document will come in late January, when Street presents his budget.
City Council President Anna Verna also received a report. She, too, wasn’t ready to commit to adopting the plan in full.
Others called for implementation of the plan.
City Controller Jonathan Saidel said the city has studied its tax structure “ad nauseam.”
“It’s time we made this green folder the law of our land,” he said.
The report has been endorsed by dozens of individuals and organizations, including the Mayfair Community Development Corporation and the Greater Philadelphia Association of Realtors.
Mark Schweiker, a former Pennsylvania governor who is now president of the Greater Philadelphia Chamber of Commerce, was on hand at last week’s announcement to show support for the package.
Even Greg Fajt, secretary of the state Department of Revenue, decried the “paralysis of analysis” that has slowed city tax reform over the years.
Forkin, though, knows the only endorsements that really count are from the mayor and Council.
An attorney, president of the American Street Erie Avenue Business Association and former City Council candidate, Forkin calls the report “well reasoned, apolitical and financially sound.”
“The question now is whether it will sit on the shelf somewhere,” he said.
The other local resident on the commission was Al Taubenberger, president of the Greater Northeast Philadelphia Chamber of Commerce.
Taubenberger, co-chairman of the commission, said the panel acted responsibly. He’s particularly happy with the business tax cuts.
“It shows people that Philadelphia is open for business,” he said.
Taubenberger, a resident of Fox Chase, also is pleased that the wage tax would drop from 4.4625 percent to 3.25 percent by 2014 if the commission’s recommendations are enacted.
“I wish it would come down quicker,” he said.
The idea for the commission originated early in 2002, when Street announced he wanted to stop decreasing the wage tax. The Greater Philadelphia Chamber of Commerce led the opposition to Street’s plan, and the mayor backed down.
On a grander scale, business people and others believed it was time for the city to take bold steps to reverse a half-century of losses in jobs and population.
Councilman Michael Nutter sponsored a bill to place a referendum on the ballot to create the commission. In the November 2002 election, 80 percent of voters approved creation of the TRC.
The commission began its work in January. It hosted a number of public hearings, including one at CORA Services in July.
The TRC was prohibited from making spending recommendations to the city, but it didn’t hold back in its criticism of Philadelphia’s tax structure.
The total cost in lost revenue for the tax cuts is $334.8 million through fiscal year 2009. That’s a mere 2 percent of the overall budget.
Schwartz, a former city councilman, said high taxes serve as a “stone wall” to economic development. He thinks lower taxes, for example, would help spur development at Penn’s Landing, improvements at Philadelphia International Airport and expansion at the Pennsylvania Convention Center.
Besides proposing to cut wage and business taxes, the commission suggested creating a taxpayers advocate position to work with citizens on property tax assessment appeals.
How should the city make up the lost revenue from all the proposals?
The commission suggests, among other things, a more aggressive approach to collecting outstanding taxes and enforcing housing code violations.
Also, according to an independent analysis, the city would see an increase in property values and gain 175,165 new jobs by 2017, thanks to the cuts in the wage tax and business tax.
The issuance of the report marks the official end of the commission’s work.
Schwartz, though, said he and the commissioners would join the public discussion and debate on the recommendations and make sure the report doesn’t “gather dust in the Municipal Services Building.”
“We’re required to disband,” he said, “but we don’t intend to disappear. ••
The complete package of tax recommendations can be viewed at www.philadelphiataxreform.org
Reporter Tom Waring can be reached at 215-354-3034 or twaring@phillynews.com