BY JOE SHAHEELI
The first half of every year is governmental budget season. Both City Hall and Harrisburg have to get their act together between now and June, if they want to run a government. And both local bodies are held to budget-balancing in ways that don’t reflect federal politics; they have to get it right each year. Which is not to say they do. That’s why we have citizens, and voters.
Mayor Jim Kenney delivered his budget proposal to City Council President Darrell L. Clarke last week and Clarke was largely benignant. That in itself betokens a smooth and efficient city budget process compared to the turbulent Nutter years.
The council president issued this statement on Mayor Jim Kenney’s Fiscal Year 2018 budget proposal:
“Mayor Kenney’s $4.4-billion spending plan appears to meet our City’s needs and does not include property-tax increases, and for that, he and his team should be commended. The City has steadily lowered wage and other business taxes over more than two decades, and the next fiscal year should continue that trend.
“I also welcome proposed new investments toward supportive housing to prevent homelessness; increased support for foster families and the Child Welfare unit of the Dept. of Human Services; and expanded employment and skills training for young people and those who have been involved with the criminal-justice system.
“This budget proposal reflects many of the stated concerns of City Council and the people we represent. For instance, we have urged the administration to address high overtime costs by making personnel investments. Proposed appropriations for the Fire Dept. to increase staffing, including for emergency medical services, should rein in overtime spending and bolster public safety.
“But when the City expands employment opportunities, it must do so equitably. Enhanced and targeted job growth in challenged communities help address inequality and provide countless secondary benefits, particularly as relates to crime and recidivism. I will also continue to urge the administration to make meaningful investments in our neighborhood commercial corridors. In the coming weeks, City Council members and staff will examine this proposed budget through the lens of racial and economic equity, as we do every year.”
Kenney’s budget is benefiting from a modest income bloom. The recession over, its inner-city neighborhoods hot, for once the City can anticipate increased revenue from natural growth … if it can avoid strangling the same though overreaching governmental greed.
Pa. Faces Budget Crossroads Too
In Harrisburg, budget deliberations are reaching their peak as well, racing like Philadelphia toward a July 1 deadline. Harrisburg is notoriously sloppier about meeting that deadline than Philadelphia; but this year there are signs Keystone State mahoffs want to avoid the political hysteria at the national level and actually get things done instead, for a change.
Most state budget hearings will be concluded by today. By tomorrow, we should have a pretty good blueprint for how it will unfold. Much hinges on the all-powerful Republican majority’s ability to accept at last that it can’t always (or ever) get what it wants: a balanced budget without enhanced revenues. Chances are they’ll be in a rare mood to look for creative new ideas.
Democratic Gov. Tom Wolf has laid out a program that calls for no broad-based general tax increases while tightening the screws on out-of-state businesses and Marcellus Shale businesses (often the same thing).
Alas, shale gas was 2009’s boom-industry fantasy. It made a difference in the Commonwealth’s economy, but rather a small one, since most of its investors and extractors are based out of state.
Expanded gambling is another popular nostrum for the General Assembly’s budget shortfalls. But it can never be a self-sustaining solution. All gaming revenues crash against the pocketbooks of ordinary consumers, who will not spend more in casinos if they are not earning more at work.
Now comes Auditor General Eugene DePasquale, who recommends regulating and taxing marijuana. He expects this industry – not just medical marijuana, which is already being implemented in Pennsylvania, but recreational marijuana – to be worth $20 billion and employ more than 280,000 in the next decade.
“The regulation and taxation of the marijuana train has rumbled out of the station, and it is time to add a stop in the Commonwealth of Pennsylvania,” DePasquale said.
“I make this recommendation because it is a more sane policy to deal with a critical issue facing the state. Other states are already taking advantage of the opportunity for massive job creation and savings from reduced arrests and criminal prosecutions. In addition, it would generate hundreds of millions of dollars each year that could help tackle Pennsylvania’s budget problems.”
DePasquale said Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington have all regulated and taxed marijuana in recent years. Washington, D.C. has legalized marijuana, but does not yet have retail sales. Other states are considering regulating and taxing marijuana, including Delaware, New Jersey and Maryland.
“In 2012, Colorado voters approved legalizing, regulating and taxing marijuana. Last year, Colorado – which has less than half the population of Pennsylvania – brought in $129 million in tax revenue on $1 billion in marijuana sales from the new industry that had already created an estimated 18,000 jobs.
“The revenue that could be generated would help address Pennsylvania’s revenue and spending issue. But there is more to this than simply tax dollars and jobs,” DePasquale said. “There is also social impact, specifically related to arrests, and the personal, emotional, and financial devastation that may result from such arrests.”
In Colorado’s experience, after regulation and taxation of marijuana, the total number of marijuana arrests decreased by nearly half between 2012 and 2014, from nearly 13,000 arrests to 7,000 arrests. Marijuana-possession arrests, which make up the majority of all marijuana arrests, were nearly cut in half, down 47%, and marijuana sales arrests decreased by 24%.
“All told, this decrease in arrest numbers represent thousands of people who would otherwise have blemished records that could prevent them from obtaining future employment or even housing,” DePasquale said. “Decriminalization also generates millions in savings from fewer arrests and prosecutions.”
DePasquale said Pennsylvania has already benefited by some cities decriminalizing marijuana.
In Philadelphia, marijuana arrests dropped from 2,843 in 2014 to 969 in 2016. Based on a recent study, the RAND Corp. estimated the cost for each marijuana arrest and prosecution is approximately $2,200. That’s a savings of more than $4.1 million in one Pennsylvania city.
Last year, York, Dauphin, Chester, Delaware, Bucks and Montgomery counties each had more arrests for small amounts of marijuana than Philadelphia. Those counties had between 800 and 1,400 arrests in 2015.
Don’t Tax You, Don’t Tax Me…
Although Gov. Wolf and the Republican-controlled General Assembly have dealt cordially with each other so far, Senate Republicans have been kicking up resistance to some of his narrow-based revenue boosting proposals.
The governor’s idea to replace an array of tax credits for expanding businesses with one-time block grants is causing discomfort on the GOP side of the aisle. Likewise, his plan to remove exemptions from the Insurance Premium Tax is thought to have grave implications for health-insurance premiums in particular – this at a time when the national chaos around the fate of the Affordable Care Act is rocking the health-care marketplace with uncertainty. Blue Cross and Blue Shield plans would be subject to new taxation; the fear is these costs would be passed on to consumers.
The governor is also asking to eliminate several sales-tax exemptions on particular goods and services. In addition, he would pursue refunds of state grants that had been given to companies on a promise of increased hiring – should it subsequently turn out those new jobs never materialized.
The governor would like to ax the Keystone Opportunity Zones and City Revitalization & Improvement Zones, replacing them with other tools to stimulate the economy in distressed areas.
All these programs have beneficiaries in the private sector and all will be making their concerns known to their legislators.
Now that the governor and the legislature are both talking up streamlining state government, it becomes difficult for the GOP to seek dramatic new spending cuts. And given the spending cuts driven through by the Corbett administration after 2009, there isn’t much low-hanging fruit left in the realm of “waste, fraud and abuse” for them to go after.
The crucial play in Harrisburg this spring will be how many revenue-enhancers the Republican caucuses can stomach. The likeliest alternative – a model Republicans have followed in the past – is to borrow money to paper over the deficit.
Reform a Theme for Untermeyer
Philadelphia’s flock of district attorney hopefuls are vying with each other this season to promote changes in prosecutorial policy. In general, the changes they are pushing would ease up on tough stances.
Michael Untermeyer has joined a chorus of criticism aimed at the asset-forfeiture program. This program permits the DA’s Office to seize a property – typically a home – where illegal drug activity has been found, even before a conviction, and even if the owner of the property is not charged in the crime.
Eleanor Young, a West Philadelphian, lost her home and her car after her son, who was living with her, was arrested on drug charges.
“It’s simply unfair for this woman who’s 70-something years old to lose her home when she’s had no involvement with narcotics violations,” Untermeyer said. He wants a policy of “meaningful review” of all such cases.
Untermeyer is also pressing for a program that would divert minor drug offenders directly into treatment programs without any criminal prosecution.
Evans Zings A.G. Sessions
Like the rest of America, Philadelphia’s political class remains riveted on the commotion in Washington.
Congressman Dwight Evans (D-Phila.) released the following statement as a response to reports US Attorney General Jeff Sessions may have lied to the American people under oath about his involvement with the Russian government during the 2016 presidential election during his confirmation hearings:
“The truth is the truth and it will be brought to light. If in fact Attorney General Jeff Sessions lied to the American people about his involvement with the Russian government during his confirmation hearings, the administration must make a powerful statement, do what is right, and demand his resignation,” the Congressman said. “This type of conspiracy and confusion threatens the safety of the American public and that is something I cannot and will not tolerate. The American people deserve a clear answer about Russian involvement in the 2016 presidential election as well as communication with officials on President Trump’s leadership team.
“Recent reports make it incredibly evident that we need an independent, bipartisan commission to investigate the influence between the Russian government and the Trump administration.
Evans also weighed in on the announcement by his Republican colleagues that they are ready with a plan to “repeal and replace” the Affordable Care Act.
“House Republicans released a bill that would take health care away from millions of Americans, putting the poorest Americans, our seniors, people with pre-existing conditions and working-class families at even greater risk of getting sick,” Evans said. “House Republicans and the Trump Administration say they want a healthcare plan that drastically cuts costs and covers more Americans than the current healthcare law, yet last night after weeks and months of secrecy they release a plan that does no such thing. The new plan is an insult to Americans who have fought hard to try and get ahead.”
According to the Philadelphia Dept. of Public Health, approximately 220,000 Philadelphians would lose their health insurance if the Affordable Care Act is repealed without an adequate replacement. PDHP reports that this would be about 22% of Philadelphia residents between the ages of 18 and 64.
Toomey Lauded as Bipartisan
US Sen. Pat Toomey (R-Pa.) was awarded the inaugural Legislative Action Award from the Bipartisan Policy Center for his numerous bipartisan efforts, including protecting children in the classroom, helping small businesses succeed, fighting the scourge of opioids, and keeping guns out of the hands of criminals, terrorists, and the dangerously mentally ill.
Early in his first term, Toomey worked with Sen. Chuck Schumer (D-N.Y.) and President Barack Obama to author a series of bills that became law and cut regulatory burdens on small and medium-sized businesses, making it easier for them to raise much-needed capital and create new jobs.
He teamed with Sen. Joe Manchin (D-W.V.) to champion legislation to expand background checks for commercial gun sales to help keep firearms out of the hands of violent criminals and the dangerously mentally ill.
Toomey and Sen. Bob Casey (D-Pa.) have worked to confirm 16 federal judges serving Pennsylvania – a number greater over the same time period than any other state except California and New York.
“As we celebrate our recent achievements, we are mindful that many of our nation’s key institutions are under great strain. Despite real divisions, there are some in Congress with the unique capacity to overcome differences and govern a diverse nation,” said Bipartisan Policy Center founder and President Jason Grumet. “Sen. Toomey is a leader with strong convictions who knows how to bring people together and get things done. The Bipartisan Policy Center is pleased to honor Sen. Toomey’s legislative skill and express our deep gratitude for his distinguished service.”
“The people of Pennsylvania want policy makers in Washington to get things done,” said Sen. Toomey. “In the Senate, that usually means 60 votes and obtaining support from both parties.
“While none of us will agree all the time, the country needs lawmakers to resist the call of obstructionism and work together, where they can, to tackle the great fiscal, economic, and security challenges of our time. That’s why I will continue to seek consensus and pursue headway on these matters on behalf of all Pennsylvanians.”
197th Race Ballot Turns Democrat-Free
Commonwealth Court Judge Anne Covey pounded a nail into the coffin of endorsed Democratic candidate for the 197th Legislative seat in Kensington Emilio Vázquez by upholding a Common Pleas Court decision that his name had been submitted too late to get on the ballot.
Barring an unlikely reversal by the State Supreme Court, this means the only name that will appear on the ballot in the March 21 special election to fill that vacant seat will be Republican Lucinda Little. Although this district typically votes only 5% Republican, 5% of somebody can beat 95% of nobody.
The Democratic Party machinery has sworn to back up Vázquez, its 43rd Ward leader, with a write-in campaign. But it faces several obstacles. The district has notoriously poor turnout, even for regularly scheduled elections. Its different wards are often embroiled in fractious factional disputes, making them hard to coordinate in an organized effort.
In addition, the Green Party is mounting a write-in campaign of its own behind locally famous anti-poverty activist Cheri Honkala.
Dueling partisan write-in campaigns are unprecedented in city political history. In the resulting three-way race, Little may eke out a victory.
Little reacted to the news by saying, “In an area of Philadelphia so often neglected by our leaders, and in a seat that has seen three Democratic State Reps in a row forced out due to corruption, the system actually has served the people of the 197th for once. My team put in the hard work to get on the ballot fairly, and since then we’ve been focused on engaging the voters of my district, where I actually live, on issues that are important to them: corruption, schools, and of course the beverage tax which hits Philadelphians in their pocketbooks.
“We are optimistic that we can take this seat and show voters in the 197th what it really means to be democratically represented by somebody who cares.”
The Republican City Committee is mounting an all-out effort to fund Little’s campaign.