Posted Feb 28, 2016, 5:00 AM
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Join Date: Oct 2011
Location: Philadelphia
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Kenney, state lawmakers call for property, wage tax changes
Quote:
In a show of solidarity not seen in Harrisburg in quite some time, a bipartisan group of state lawmakers gathered in Philadelphia's City Hall Friday, along with Mayor Jim Kenney, and local civic and business leaders, to announce a legislative plan that would up the tax rate on the city¹s commercial properties while lowering wage and businesses taxes.
The bill, which would modify the state¹s constitution, aims to create up to 100,000 jobs in the city through a restructured tax system that is considered more attractive to business owners.
State Rep. John Taylor said the legislation would reposition the sources of Philadelphia¹s budget, making the city less reliant on wage tax currently 3.92 percent for residents and about 3.49 percent for nonresidents.
"There is no other city in the Commonwealth as tied to the wage tax as Philadelphia," said Taylor, adding that Detroit is the only other major American city to have a model similar to Philadelphia's.
"And that is not company we want to be in," he said.
If the proposed changes make it through Harrisburg a process that could take at least two years, it would allow Philadelphia to enact its own legislation "to assess real estate taxes on business properties at a rate up to 15 percent higher than the rate on non-business properties."
In turn, the wage and business taxes would be lowered. The rates would be reduced in sync with the raise in commercial property taxes on a dollar basis to prevent the creation of a funding gap, the lawmakers said.
No exact rates are named in the proposal. Kenney, however, said his goal was to lower the wage tax to less than 3 percent over the next 10 years. The proposal says the rate changes would move together and the commercial real estate tax could be as much as 15 percent higher, but no more, than the residential rate.
With the current residential rate of 1.3998 percent, the commercial rate could be as high as 1.6098.
The proposal has the support of the Philadelphia Job Growth Coalition, a 20-member group that includes several commerce chambers, unions and major commercial property owners, like Brandywine Realty Trust.
"How do we take Philadelphia from being a bottom job growth to a top growth city?" asked Gerard Sweeney of Brandywine which would certainly be affected by the tax change.
Sweeney said shifting the burden from wage and business taxes to commercial real estate taxes would make Philadelphia more competitive nationally, attracting more businesses that then create more jobs.
According to data provided by the Central Philadelphia Development Corp., also a coalition member, the number of jobs in the city has grown by 1.1 percent annually since 2010. In contrast, the 25 largest cities in the country, excluding Philadelphia, have added jobs at a rate of 2.8percent.
"It is sometimes good to take the path less traveled," Sweeney said.
Despite the support of many local civic and business leaders, there are others who remain unconvinced this is the right course of action.City Council President Darrell Clarke, often a Kenney ally, reiterated his opposition this week with the introduction of a resolution.
In the resolution, Clarke said he supports a change to the constitution to allow the city to implement different property tax rates for each type of property but is against connecting those changes to an adjustment in business or wage taxes.
"This radical and, to Council¹s knowledge, unprecedented proposal would irrevocably tie the City¹s hands in an ill-advised manner," the resolution stated. "It is the complete opposite of what is needed because it would onlyrestrict the City¹s flexibility."
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http://www.bizjournals.com/philadelphia/...awmakers-call-for-property-wage-tax.html
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