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With school deficits looming, Philly debates tax strategy ahead of new budget

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

As Mayor Kenney readies his proposed budget this week, a recent Philadelphia City Council tax policy hearing featured several familiar voices and perspectives on how he could deal with deficits looming for the city’s school district. The debate could foreshadow an emerging conflict over to how to fund Philadelphia’s schools at a time when the city is slated to take more control over them.

For years, business leaders have pressed Philadelphia to shift its tax burden away from business and wage taxes and toward higher real estate levies, arguing that the city’s unusual tax structure restricts job growth. The city generally has moved in that direction, though not as quickly as the business community would like.

On Wednesday, business leaders including Gerard “Jerry” Sweeney of the Brandywine Realty Trust, hammered that same message in a hearing on tax policy before City Council’s Legislative Oversight Committee.

“Our problem is our tax structure,” said Sweeney, co-author of a plan that would allow the city to tax commercial properties at a higher rate than residential properties.

Countering Sweeney were Marc Stier of the left-leaning Pennsylvania Budget and Policy Center and Jeff Hornstein, the new executive director of the Economy League of Greater Philadelphia.

Stier and Hornstein argued that the single-minded focus on tax policy was misguided. Instead, they said, the city’s growth will depend on its ability to create a strong school system and provide other core city services.

“Research connecting tax change to economic growth is not that strong,” argued Stier. “The research that points to the close connection between levels of public investment in education and economic growth, in fact, is very strong.”

Herein lies the looming showdown.

Read the rest of this story at WHYY News

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