PHILADELPHIA | Highrise Development Thread IX

[cardeza]

Originally Posted by 3rd&Brown

Not to bring this back up, but after this discussion (in part because I'm one that is super negative on this topic vis a vis Philadelphia), I did some digging. It turns out the city has been cutting the NPT 5 basis points (0.05) per year for the past few years and has them scheduled for the next 3 already. At it's high point (very recently), the NPT was 6.5% on income generated in Philadelphia. With these cuts, the tax will be 6.0% in 2022.

While it needs to drop much further, I was happy to find the cuts are certainly happening at a faster rate than the wage tax was ever cut. Although I think the city could be cutting it faster (say 10 basis points per year) while city coffers were flush, I'm glad to see that they're decisive cuts.

I suppose it's not being talked about more because taxes in Philadelphia are a touchy issue. Any time it is perceived that a business is getting a tax cut, some camps lash out. Given that, I can't say I'm unhappy it's not talked about much.

People seem to not grasp that a healthy budget includes a surplus and money to set aside for future recessions. Ive seen comments suggesting that because there is a surplus there should be a tax cut equal to that surplus- essentially removing any possibility of setting aside money in the rainy day fund. A one year surplus is just that- a one year balance. When you cut a tax rate you are cutting revenue each and every year going forward- i.e. they are two different issues. You can find citizens, businesses and policy groups offering different stances and solutions- but there is no consensus. Levy and the business groups are all in on increasing real estate taxes so that business taxes can be lowered. Home owners are not on board with this as you can see from all the complaining about paying higher taxes as city real estate values increase. You are seeing an uproar and we aren't even talking about an actual RATE INCREASE- just taxes keeping up with valuation. The business groups knew this was going to be an issue which is why they proposed the dual rate legislation in Harrisburg- which was never passed. Back to square one.

[3rd&Brown]

Originally Posted by cardeza

People seem to not grasp that a healthy budget includes a surplus and money to set aside for future recessions. Ive seen comments suggesting that because there is a surplus there should be a tax cut equal to that surplus- essentially removing any possibility of setting aside money in the rainy day fund. A one year surplus is just that- a one year balance. When you cut a tax rate you are cutting revenue each and every year going forward- i.e. they are two different issues. You can find citizens, businesses and policy groups offering different stances and solutions- but there is no consensus. Levy and the business groups are all in on increasing real estate taxes so that business taxes can be lowered. Home owners are not on board with this as you can see from all the complaining about paying higher taxes as city real estate values increase. You are seeing an uproar and we aren't even talking about an actual RATE INCREASE- just taxes keeping up with valuation. The business groups knew this was going to be an issue which is why they proposed the dual rate legislation in Harrisburg- which was never passed. Back to square one.

I never said the city should consume its entire surplus on cutting taxes.

Further, the property tax increases are arbitrary. My property taxes have gone up 200% in less than 5 years. I assure you the value of my home has not gone up 200% in five years. I wouldn't be so mad if other taxes were decreasing more quickly, but I assure you they are not.

Further, even if the value of my home had gone up by that much, who says the city should be automatically re-assessing as such? Each and every tax increase should be scrutinized. The city cant decide to increase the value on your home at will without it being challenged.

[Aaamazarite]

Here's the old rendering

[iheartphilly]

^
Thanks for clarifying with the re-post. I got confused because it was mentioned on the Beurger site (assuming that was the Beurger Center for Advanced Pediatrics) and Roberts Proton Therapy Center on the other side of the river. I thought the new build was gonna be wedge between them.

[summersm343]

It's the other side of the river he's talking about. In University City.

Look on Google Maps. On one side you have the Buerger Center - the new one. On the other side is the Colket Research Center. There is green space in the middle. In the back of the green space (against the train tracks), there is a small one story building that says 'Raymond G Perelaman Campus" on it. It's mostly utilities and such right now. There are foundations in here for a future highrise.

[iheartphilly]

^
ok cool. I think I got it now.

[ScreamShatter]

Originally Posted by cardeza

People seem to not grasp that a healthy budget includes a surplus and money to set aside for future recessions. Ive seen comments suggesting that because there is a surplus there should be a tax cut equal to that surplus- essentially removing any possibility of setting aside money in the rainy day fund. A one year surplus is just that- a one year balance. When you cut a tax rate you are cutting revenue each and every year going forward- i.e. they are two different issues. You can find citizens, businesses and policy groups offering different stances and solutions- but there is no consensus. Levy and the business groups are all in on increasing real estate taxes so that business taxes can be lowered. Home owners are not on board with this as you can see from all the complaining about paying higher taxes as city real estate values increase. You are seeing an uproar and we aren't even talking about an actual RATE INCREASE- just taxes keeping up with valuation. The business groups knew this was going to be an issue which is why they proposed the dual rate legislation in Harrisburg- which was never passed. Back to square one.

Let's be realistic, Trump tax reform got rid of the exemption of local wage taxes, property taxes, etc and that's increasing taxes on many of Philly's middle class and upper middle class people. If Philly wants to continue seeing population growth and not a return to population decrease, tax cuts are required.

[PurpleWhiteOut]

Originally Posted by summersm343

It's the other side of the river he's talking about. In University City.

Look on Google Maps. On one side you have the Buerger Center - the new one. On the other side is the Colket Research Center. There is green space in the middle. In the back of the green space (against the train tracks), there is a small one story building that says 'Raymond G Perelaman Campus" on it. It's mostly utilities and such right now. There are foundations in here for a future highrise.

Yep, the office tower IS going behind the Buerger Center. It would be too inconvenient to put offices on the other side of the river, and they even mentioned there will be access to the Buerger Center on the corresponding floors. The future phases in that rendering likely refer to future research buildings that they mention they will need in about 6 years.

[iamrobk]

Originally Posted by ScreamShatter

Let's be realistic, Trump tax reform got rid of the exemption of local wage taxes, property taxes, etc and that's increasing taxes on many of Philly's middle class and upper middle class people. If Philly wants to continue seeing population growth and not a return to population decrease, tax cuts are required.

It hasn't really been talked about much (or at all, really), but the property tax abatement actually serves as a decent hedge against the recent tax reform bill.

[City Wide]

^^^^
As a long timer in Philly one aspect of this discussion that I think never seems to be considered is that of wanting the City to do a much better job of controlling and managing the expense side of the balance. I think there is much too much energy spent on increasing revenue and next to none n the other direction. That's ok in some cases, but the City's leaders don't seem to show any desire to do anything except spend and seemingly have no understanding that all this increase in revenue (the City's budget is almost double from 10 years ago)comes at a real cost to real people.

Just look at the discussion regarding the $15M unspent dollars from the bond sale that was suppose to go to moving the police dept. etc. to West Philly, you would have thought the council members were a bunch of 6 year years in a candy store on allowance day, and the mayor is no better. The City is probably billions in debt, but they can't wait to spend this $15M.

After 40+ years, I'm starting to consider running for the hills, and I always thought I'd go out toes up when I finally left town.

[ScreamShatter]

Originally Posted by iamrobk

It hasn't really been talked about much (or at all, really), but the property tax abatement actually serves as a decent hedge against the recent tax reform bill.

True, but only for 10 years though, and that really depends on if someone is buying a new house or not. Then the property tax in combination with wage tax has to be taken on top of federal taxes. If Philly wants to retain people, it will have to drastically reduce taxes or prepare for people to start leaving.

[ScreamShatter]

Originally Posted by City Wide

^^^^
As a long timer in Philly one aspect of this discussion that I think never seems to be considered is that of wanting the City to do a much better job of controlling and managing the expense side of the balance. I think there is much too much energy spent on increasing revenue and next to none n the other direction. That's ok in some cases, but the City's leaders don't seem to show any desire to do anything except spend and seemingly have no understanding that all this increase in revenue (the City's budget is almost double from 10 years ago)comes at a real cost to real people.

Just look at the discussion regarding the $15M unspent dollars from the bond sale that was suppose to go to moving the police dept. etc. to West Philly, you would have thought the council members were a bunch of 6 year years in a candy store on allowance day, and the mayor is no better. The City is probably billions in debt, but they can't wait to spend this $15M.

After 40+ years, I'm starting to consider running for the hills, and I always thought I'd go out toes up when I finally left town.

I agree. The city definitely needs to decrease spending and reform taxes. But that'll never happen with one party rule in Philly. We need more Republicans (moderate sane Republicans) in Philly to balance out years of Dem rule.

[cardeza]

Originally Posted by ScreamShatter

I agree. The city definitely needs to decrease spending and reform taxes. But that'll never happen with one party rule in Philly. We need more Republicans (moderate sane Republicans) in Philly to balance out years of Dem rule.

reforming taxes simply means shifting burden from one group to another. No one who benefits from current tax structure is going to sit by idly and accept reforms that place more burden on them. The party that rules does not change budget realities and thus has little bearing on whether or not drastic tax "reforms' take place. State law and budget realities limit the options- hence the reason Nutter wanted to sell PGW to get a big infusion of cash to use towards lowering some taxes. Interestingly, I'm not aware of any suburban municipality that is actively lowering taxes. If people want to be somewhere it seems taxes aren't typically the primary factor they evaluate. I think people have been warning about a pending mass exodus ever since Philadelphia's population started to increase. As far as I know, the trend remains upward as we speak

[cardeza]

Originally Posted by 3rd&Brown

I never said the city should consume its entire surplus on cutting taxes.

Further, the property tax increases are arbitrary. My property taxes have gone up 200% in less than 5 years. I assure you the value of my home has not gone up 200% in five years. I wouldn't be so mad if other taxes were decreasing more quickly, but I assure you they are not.

Further, even if the value of my home had gone up by that much, who says the city should be automatically re-assessing as such? Each and every tax increase should be scrutinized. The city cant decide to increase the value on your home at will without it being challenged.

Valuation increase is not a tax increase. The rate hasn't changed in years and it can't change without legislation. Based on press coverage its obvious the OPA methodology needs significant work. Philly and other areas in this state are SUPPOSED to update valuations on a regular basis, but it doesn't happen. That is not a case of doing something illicit- it's actually following state mandates. Suburban jurisdictions are even more unbalanced in terms of tax burden (Inquirer has written about this) because the counties have avoided doing mass re-appraisals that would make things more fair. Philadelphia does not have to perform revenue neutral mass appraisals- which is technically a good thing for those advocating that property taxes cover an increased portion of the budget load.

The accuracy needs to improve, but the idea that people prefer that outdated real estate information be used for valuations so they don't have to pay more taxes in an area with appreciating values doesn't hold water in my book. An accurate system is one in which the valuations track closely with values which means appreciation in the real world will lead to higher tax bills.

[iamrobk]

Originally Posted by cardeza

reforming taxes simply means shifting burden from one group to another. No one who benefits from current tax structure is going to sit by idly and accept reforms that place more burden on them. The party that rules does not change budget realities and thus has little bearing on whether or not drastic tax "reforms' take place. State law and budget realities limit the options- hence the reason Nutter wanted to sell PGW to get a big infusion of cash to use towards lowering some taxes. Interestingly, I'm not aware of any suburban municipality that is actively lowering taxes. If people want to be somewhere it seems taxes aren't typically the primary factor they evaluate. I think people have been warning about a pending mass exodus ever since Philadelphia's population started to increase. As far as I know, the trend remains upward as we speak

Bingo - especially for the City. Sure, there are some expenses that could be cut, but that's true of any government (or business, for that matter). But we can't really make structural changes at the local level that aren't just shifting tax burdens around.

Also, re: PGW, I could be wrong but I think the plan was to put most/all of the money into the pension fund. I guess it could have helped lower the wage tax (or whatever) slightly faster, but I don't think the plan was to sell PGW and simultaneously make a big wage/property/business tax cut.

[PhillyRising]

The city has to get off of the city wage tax. Mayor Tate and then Mayor Crumb Bum back in the 60's and 70's thought if they raised property taxes that it would harm homeowners. So they raised taxes on what could be moved and you saw the city go into a nose dive. You can't move the houses.

The wage tax and some of the business taxes aren't helping the city in the long run. There needs to be a complete overhaul of the city tax code.

[Redddog]

Originally Posted by PhillyRising

The city has to get off of the city wage tax. Mayor Tate and then Mayor Crumb Bum back in the 60's and 70's thought if they raised property taxes that it would harm homeowners. So they raised taxes on what could be moved and you saw the city go into a nose dive. You can't move the houses.

The wage tax and some of the business taxes aren't helping the city in the long run. There needs to be a complete overhaul of the city tax code.

Turning an aircraft carrier.

There are sooo many variables that come into play - and politics isn't designed to allow for this. Tax reform requires across-the-isle agreement and that, more today than ever before, won't happen.

I agree that the expense side of the ledger is a major problem. It costs so much more for the government to build/renovate/operate than the private sector. Unions? I think so.

How many of us have passed a SEPTA construction site and actually seen someone working? It's taken them over a year to tile 15th street station. I'm pretty sure that I could have had that done myself in about 3 months, working weekends and evenings. The lazy, entitled union worker of today is the reason why budgets blow up. Or at least a big reason.

[cardeza]

Originally Posted by iamrobk

Bingo - especially for the City. Sure, there are some expenses that could be cut, but that's true of any government (or business, for that matter). But we can't really make structural changes at the local level that aren't just shifting tax burdens around.

Also, re: PGW, I could be wrong but I think the plan was to put most/all of the money into the pension fund. I guess it could have helped lower the wage tax (or whatever) slightly faster, but I don't think the plan was to sell PGW and simultaneously make a big wage/property/business tax cut.

I believe you are correct, but the domino effect of shoring up the pension fund would have been to allow for more aggressive tax rate reductions. Not only was council against this idea- PGW was in so much debt that the net profit was going to be much smaller than originally hoped when the process started.

[cardeza]

Originally Posted by PhillyRising

The city has to get off of the city wage tax. Mayor Tate and then Mayor Crumb Bum back in the 60's and 70's thought if they raised property taxes that it would harm homeowners. So they raised taxes on what could be moved and you saw the city go into a nose dive. You can't move the houses.

The wage tax and some of the business taxes aren't helping the city in the long run. There needs to be a complete overhaul of the city tax code.

I think the wage tax started in the 20s or 30s. It hasn't been increased in decades- maybe since the 80s. It's typically not the tax most associated with job growth because businesses don't pay it directly. The CCD and others have repeatedly made the point that other cities tax real estate a lot more and thus rely less on other taxes. Convincing people here that the the path to prosperity is through significantly increasing the real estate rate would be a tough sell.

[cardeza]

Originally Posted by Redddog

Turning an aircraft carrier.

There are sooo many variables that come into play - and politics isn't designed to allow for this. Tax reform requires across-the-isle agreement and that, more today than ever before, won't happen.

I agree that the expense side of the ledger is a major problem. It costs so much more for the government to build/renovate/operate than the private sector. Unions? I think so.

How many of us have passed a SEPTA construction site and actually seen someone working? It's taken them over a year to tile 15th street station. I'm pretty sure that I could have had that done myself in about 3 months, working weekends and evenings. The lazy, entitled union worker of today is the reason why budgets blow up. Or at least a big reason.

I'd say 90% of "public" projects are done by private companies. There are a few exceptions (such as street paving- the City actually does much of that in house) but generally speaking private contractors build, pave, renovate, etc. for public entities. Doing work in an occupied station that can't be closed is slow, inefficient and expensive. The alternative would be to shut the station down for 6 months to complete the project- don't think the public would be too thrilled with that option.