Coalition aims to improve city's job growth

A broad coalition of business, labor and civic groups has proposed a plan for job growth in Philadelphia.

The plan calls for reductions in city wage taxes and business income and receipt tax (BIRT) reductions. The reductions would be offset by a 15 percent increase in the commercial real estate tax rate.

During a Tribune editorial board meeting, Paul Levy, president and CEO of the Center City District and Steven Bradley, chairman of the African American Chamber of Commerce of Pennsylvania, New Jersey and Delaware touted the coalition’s proposal.

“There’s been three or four different job commissions over the last 10 years and they are all coming back to this issue of the city’s wage tax and how that’s a barrier to growth in the region,” Bradley said.

Philadelphia has a 3.92 percent wage tax — the highest wage tax of the 50 largest U.S. cities for individuals making less than $100,000, Levy said.

“The wage tax in this city is about four times the regional average which is about one percent. If you’re paying business income and receipt tax, it’s a 20 to 30 percent premium over suburban costs,” Levy said, noting this discourages businesses from relocating to Philadelphia.

The coalition has spent the last two years building momentum around the issue of stimulating the city’s job growth.

Earlier this month, City Council passed a resolution urging the state Legislature to modify the uniformity clause of the Pennsylvania Constitution to allow for a differential real estate tax rate between commercial and residential properties to fund the accelerated reduction of wage and business taxes to foster the growth of Philadelphia’s job and tax base.

The next step is for legislation to be introduced in Harrisburg.

“Our message to Harrisburg is, give Philadelphia the authority to help itself,” Levy said. “We want a much more competitive tax structure. Give us the authority to do that.”

The coalition’s proposal comes as Philadelphia is facing a 26.3 percent poverty rate and declining jobs. Philadelphia lost 284,344 jobs in the last four decades, the group said.

While Center City and University City areas experienced some job growth, other sections such as North and West Philadelphia have not seen resurgence of jobs since the manufacturing base left. The Center City and University City districts account for about 54 percent of all jobs in Philadelphia.

“The bottom line is that the growth in University City and Center City simply isn’t big enough to offset the years of other decline in the city,” Levy stated. “We’ve reached a point to where we are flat. We’ve come out of the recession in Philadelphia with some modest job growth but we still have less jobs in the city, than we did in 2001.”

According to the coalition, 37 percent of city residents outside of Center City are commuting to the suburbs to find work.

The coalition’s plan is a 10-year strategy to shift the burden from wage to business taxes to real estate commercial taxes. An analysis of the coalition’s proposal suggests that an additional 50,000 to 100,000 new jobs could be created over the next decade.

The group projects the growth of jobs and the expansion of the real estate tax base across the city means that $42 million more in real estate taxes will flow to the school district in the plan’s first five years. After that, it will generate $40 million to $60 million more each year in new real estate tax revenues for the district.

“The substantive thing that happens here is by shifting dependency to the real estate tax, by growing businesses, we grow the tax base of the city which is good for the school district,” Levy said. “We’re not proposing anything that is adverse. If you want to solve poverty, solve unemployment and solve a weak tax base for the schools, you got to grow jobs.”

The following organizations are supporters of the proposal: African American Chamber of Commerce, Brandywine Realty Trust, Building Owners & Managers Association Philadelphia, Central Philadelphia Development Corporation, Committee of 70, Economy League of Greater Philadelphia, General Building Contractors Association, Greater Philadelphia Chamber of Commerce, Greater Philadelphia Hispanic Chamber of Commerce, International Brotherhood of Electrical Workers, Local 98, Metropolitan Regional Council of Carpenters, Northeast Chamber of Commerce, Parkway Corporation, Philadelphia Building and Construction Trades Council, PREIT, PRWT Services and Services Employees International Union, Local 32BJ.

Source: Philly Tribune