ELEPHANT CORNER: Philadelphia City Council’s Construction Tax Faces a Rough Road Ahead

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MAYOR JIM KENNEY remains opposed and probably will veto the construction tax narrowly passed by City Council.

Kenney has given himself till the end of the summer to decide whether to act. As the bill passed with only eight votes, Council may not have the 12 votes necessary to overturn the veto. COUNCIL PRESIDENT DARRELL CLARKE may be able to flip a few of the nos (or those who were not there for the vote). However, I do not think he will be able to turn the three Republicans (BRIAN O’NEILL, AL TAUBENBERGER and DAVID OH) or real-estate developer ALLAN DOMB. I doubt BOBBY HENON and MARK SQUILLA, who both appreciate the negative impact of this bill on construction and the builders’ unions, can be persuaded to vote yes. I should note that the construction unions including Electricians’ Local 98, lobbied against the bill.

Kenney opposed the bill, which was designed to raise roughly $20 million per annum for affordable housing. Kenney initially opposed the bill as he felt it might be a detriment to Amazon’s choosing Philadelphia for its second headquarters. However, Council amended the bill to exempt Amazon last month. Kenney remained opposed to the bill. Kenney actually said, “Philadelphia is already considered by many to have a pretty onerous tax system, and it is certainly not clear that adding another tax is the best way to address our housing crisis.”

MAYOR Jim Kenney is not keen on City Council’s tax on new construction, which aims to fund affordable housng.

The City of Philadelphia should not be in the business of building affordable housing. That is the purview of the federal government, which funds and runs the Philadelphia Housing Authority. I can see why the City believes it is its job to supply the homeless with shelters and other temporary relief.

The funds from this tax would go to construction of dwelling for families making less than roughly $100,000 per annum. Why would we subsidize people making that kind of money? But then again, our City Council and mayor think it okay to offer tax cuts on high-end condos and offer corporate welfare for large corporations.

Giving a tax exemption to Amazon as this bill has outlined is yet another example of corporate welfare. The City does not need to give tax breaks on top of the billion-dollar-plus package the Commonwealth of Pennsylvania is offering Amazon.

Please note GOV. TOM WOLF is fighting any Freedom of Information Act disclosure of any details of his Amazon deal. Yes, we are supposed to pay for it with our taxes, but cannot know what we are financing. Could you imagine any major corporation doing a billion-dollar deal without showing the deal to its board of directors and eventually publishing it (in detail) in its financial-disclosure documents? The board of directors represent and are advocates for the owners (stockholders). Who is advocating for us the taxpayers? I hope no one would even think to suggest that the Wolf administration truly represents the interests of taxpayers.

Pennsylvania, according the Commonwealth Foundation, is the largest donor of corporate welfare in the United States. Our corporate welfare exceeds on both aggregate dollar and per capita bases than that of tax-and-spend State of California.

I was happy to hear Kenney talk about our onerous tax structure in the city. However, I am not trusting that he finally has seen the light and will back off on further tax increases. But what was good about his opposition to the construction tax that he rejected a tax that would impact large and small businesses across the board.

While we want Amazon here, the solution is not exempting them from this contraction tax, but rather what hopefully Kenney will do – veto the whole bill. I am sure the Pennsylvania package to Amazon is more generous than others to compensate for our tax and regulatory structures, which are far from business friendly in my opinion. The good news for us is that the states around us, especially New Jersey, are probably worse for businesses. If we want to attack Amazon or any other large employer to Pennsylvania, we need to reduce taxes for all.

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2 Responses to ELEPHANT CORNER: Philadelphia City Council’s Construction Tax Faces a Rough Road Ahead

  1. Proof read the articles before posting, there are many grammatical errors!

    Dave Truscello
    July 24, 2018 at 4:55 am

  2. Thank you for alerting us. We have corrected two typographical errors.

    Tony West
    July 25, 2018 at 10:21 am

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