The Robin Hood Tax: Can Comcast, Penn, & the PPD Save Philadelphia from Austerity?

Filed under: Featured News |

A CLAMOR to “Defund the Police” ran through the streets of Philadelphia recently – bearing fruit in the newly revised 2020-21 City budget. Photo from Philadelphia Socialist Alternative’s Facebook page

June 25 will mark the last session of City Council before break, by which time they will have voted on Mayor Jim Kenney’s unpopular austerity budget, which proposed large funding cuts for education, the arts, and essential services to cope with a projected deficit now in the range of $750 million. This has become the newest target for civil unrest in Philadelphia for dozens of organizations, from Black Lives Matter Philadelphia to the local Socialist Alternative chapter, outraged by the initially proposed $19 million increase to the PPD budget in the midst of nationwide protests against police brutality.

They argue that, when Mayor Kenney subsequently rescinded the PPD budget increase, he did so to assuage public backlash rather than proactively find a solution. These groups are now pushing back against the entire premise of the budget cuts, demanding that the deficit burden ought not to fall on the shoulders of working-class Philadelphians, but instead be paid through a rebalancing of the City’s PPD budget and through taxes on locally prosperous financial entities like Penn, Comcast, Aramark, and real-estate developers.

The proposed austerity budget directly cut long term solutions that could have addressed the very problems that currently motivate the PPD budget. “It is counterproductive to increase spending on the Police Department while cutting spending on public health, housing, social services, violence prevention, youth programs, libraries, parks, recreation centers and the arts,” said a letter from 14 out of 17 City Councilmembers sent to Mayor Kenney last week.

MAYOR Jim Kenney’s revised, post-COVID budget proposal, which offered an increase to the Police Department, was roughly handled in City Council

The mayor’s budget promised the following cuts:

First, an 11% decrease in the street-cleaning budget would leave Philadelphia’s residential streets filled with litter despite evidence that cleaner and greener City streets see lower crime rates.

Second, a cut to half of all government-sponsored community-college scholarships would leave 2,300 graduates of Philadelphia high schools without funds to pursue their education in the 2020-2021 school year. This also robs the Community College of Philadelphia of nearly half of its tuition money, and that is already on top of the budget’s 19% cut to the Community College Subsidy.

Third, the civilian officers program for traffic regulation cut, opponents argue, would not only increase the likelihood of traffic-related deaths, it will also abandon a program that could have served as a new model for replacing the PPD with unarmed civilians.

Fourth, 100% of the Arts, Culture & Creative Economy budget would be cut. That cut includes the elimination of the historic African American Museum in Philadelphia, which is counterintuitive to the Zeitgeist of Black rights. Beyond the negative impact this cut will have on morale for City residents, critics also argue that the arts are a critical driver of commerce to a post-industrial city like Philadelphia. “[Arts and Culture] spur population growth and jobs and enhance the overall reputation of the city. Such financial cuts…would do outsize harm to our city’s brand.”

Fifth, the Mayor’s budget calls for a 45% cut to the November election budget despite increased costs this year due to new voting machines, major changes to State election law, increased presidential-year election turnout, and pandemic-related shifts in voter behavior and election administration. According to Lisa Deeley, chair of the Philadelphia City Commission, “With the current budget that we have going on right now, we would be in danger of not being able to have the November election.” This is particularly worrisome in Pennsylvania, a swing state that gave the presidency to Trump by about 44,000 votes.

Sixth, a 75% cut to renter-protection and eviction programs and a 21% cut to Homeless Services seem ill-advised when staying at home is the primary weapon we have against spreading a pandemic that has claimed more lives in the U.S. than in any other country.

THE WELL-ENDOWED University of Pennsylvania is one of the large institutions that dominate Philadelphia’s economy – yet pay little or nothing in taxes or PILOTS to support vital public services in a time of crisis.

Seventh, a 19% cut to the Free Library would result in 250 laid-off, non-union librarians, approximately half of the estimated total layoffs. This cut endangers the existence of one of the few safe havens the City offers its underprivileged residents. Erin Hoopes, a library supervisor and member of Philadelphia Municipal Workers United who has been protesting the cuts, said, “We were pushing before six-day service, but I don’t even know how we’re to open our doors even five days at this point.”

The devastating impact of these cuts is hard to ignore, and in moments like this, it’s hard not to cast a sidelong glance at the University of Pennsylvania, an entity that sits on a $15 billion endowment and occupies 10% of the city’s land; the most land of any urban university in the country. Penn is completely exempt from paying property taxes due to its “nonprofit” status. In 1995, following a Supreme Court of Pennsylvania ruling that universities fall outside the State’s definition for a “purely public charity,” Philadelphia’s Payments in Lieu of Taxes (PILOTs) program forced Penn to pay approximately $2 million to the City (less than the annual salary of Penn’s President Amy Gutman). However, a few years later, when State legislation diluted that definition, Penn immediately stopped paying, suggesting that it needs outside parties to hold it accountable.

Penn’s refusal to contribute to its own city goes against the norm. Six of the eight Ivy League universities pay PILOTs, even those with substantially smaller endowments than Penn. Nonetheless, Penn actively lobbies the City to avoid PILOT payments, depriving the City of money that would otherwise go directly towards schools and other essential services. Even if Penn paid just $6.6 million in Pilots, it would amount to only 0.1% of its annual operating budget. Councilmember Kendra Brooks (at Large) has been a vocal supporter of making Penn pay. “Pathways out of poverty are created through education and opportunity,” Brooks said. “Penn should pay their fair share to make sure kids have that pathway.”

However, while Mayor Kenney championed a return to PILOTs as a newly elected mayor in 2015, he curiously now no longer sees it as a viable option.

The Alliance for a Just Philadelphia’ wrote a document called The “Revenue for A Just Recovery” Plan, which suggests amendments to Kenney’s budget. The power of The Plan, which has the support of a number of high-profile progressive groups in the City, including Reclaim Philadelphia and Juntos, is that it explicitly points to alternative, progressive funding sources. In particular, The Plan calls for either increases or implementations of progressive taxes, which will more heavily tax the wealthy, as opposed to regressive taxes, which are applied uniformly and therefore take a larger percentage of income from low-income earners.

In addition to a ‘Personal Property Tax’ that would tax intangible personal property like stocks and bonds, an increase in the Realty Transfer Tax’ to leverage wealthy property owners, and PILOT programs, The Plan also targets wealthy corporations like Comcast and Aramark by demanding an end to the unpopular 10-year tax abatement.

ACTIVISTS charge that major corporations like Comcast that have benefited from substantial tax breaks are not carrying their share of the load in coping with the City’s pandemic funding shortfall.

Originally implemented to incentivize new construction in Philadelphia by lowering property taxes for corporations, the 10-year property tax abatement reduces by 55% the share of property-tax money that would normally go directly to public schools. Although City Council voted to reform the 10-year tax abatement in December 2019, it only reduced the abatable amount available for residential properties. The Plan demands a full elimination of the abatement to fund schools, affordable housing, and urban agriculture. “The abatement lets wealthy real-estate developers and corporations off the hook for paying their fair share of taxes; for example, Comcast won’t pay taxes on the value of its $1.2 billion Technology Center in Center City until 2027,” states The Plan.

The Amistad Law Project, Sunrise Philadelphia, as well as the local chapters of Black Lives Matter and Socialist Alternative, are among those organizations demanding that the mayor cut $120 million from the police budget, which is the staggering amount of money the police’s budget has increased by over the last five years of Kenney’s administration. In a June 15 WHYY op-ed, Kris Henderson of the Amistad Law Project accuses Kenney of lacking political courage. “Mayor Jim Kenney and his managing director, Brian Abernathy, haven’t demonstrated the political courage that this moment demands. Meanwhile, elected officials from Los Angeles to New York City are cutting millions from their bloated police budgets. And even politicians in Minneapolis are caving to the demands to dismantle their current policing infrastructure, which includes cutting ties with their police unions.”

As the June 25 deadline approaches, activist groups have been putting pressure on the City Council to veto Kenney’s budget and consider more progressive solutions. Yet police critics say they have learned from centuries of failed police reform, insisting the problem will not resolve itself. That is why activist groups are combining mass protest with phonebanking, emailing, and social media blasts to get City Council’s attention.

SUNRISE PHILADELPHIA is another of the plethora of progressive groups that have thrown themselves behind the drive to direct police monies toward social programs.

On June 13, for example, thousands gathered at 400 N. Broad Street, the site slated to become the new police headquarters, demanding that local officials defund the PPD in order to support other departments that are being cut. Protestors marched around City Hall and finished with a rally near Kenney’s house to make their message heard. The names of police victims – George Floyd, Breonna Taylor and Ahmaud Aubrey, as well as Dominque “Rem’mie” Fells, a transgender woman recently murdered in Philadelphia, rang out across city streets.

“After months of pandemic lockdown, economic hardship, loss of life, and inept government response, people are getting frustrated, and the further cuts to City services stands in sharp contrast to the bloated and militarized Police Department,“ says Duncan Gromko, a resident of Philadelphia who attended the protest on Saturday. Gromko also notes how organized the protest was. “There were volunteers providing water, food, hand sanitizer, and masks, creating a sense of community and shared purpose amongst the groups. In contrast, the majority of police officers refused to wear masks,” he says.

Despite the large turnout rates for events like this in recent weeks, Gromko says there is still a lot of work to be done. “We are getting some wins, but real transformation of the PPD and the City’s budgeting priorities faces significant obstacles. The police and other interest groups have a lot of power.” To his point, U.S. Sen. Pat Toomey (R-Pa.) recently stated that he supports the police and in fact and he and his colleague Tom Cotton (R-Ark.) cosponsored a resolution to oppose any effort to defund police. After police officers ignored and even encouraged violence by community members protecting the Columbus statue in Marconi Plaza in the days following Saturday’s march, Gromko predicts that the pressure on the City to defund the cops will only grow.

COUNCIL PRESIDENT Darrell Clarke said to demonstrators: “We hear you. We get it. Council is listening, and Council is acting.”

Nonetheless, City Council does seem to be responding to the spike in civil unrest. “City Council is closely following the demonstrations and calls for reform in how policing is conducted in Philadelphia,” Council President Darrell L. Clarke (5th District) said. “We hear you. We get it. Council is listening, and Council is acting.”

While the faithful response of the City Council remains to be seen, there appears to be a glimmer of hope in the form of two new tax bills proposed by Councilmember Kendra Brooks on June 11, one to end the 10-year tax abatement and the other to start a Personal Property Tax. Councilmember Helen Gym (at Large) co-sponsored both the bills, and Councilmember Jamie Gauthier (3rd District) co-sponsored the bill to end the 10-year tax abatement. Brooks contends that the current tax abatement accelerates gentrification and “primarily benefits luxury developers and wealthy newcomers, many of whom are white,” and has driven up home prices for people of color, particularly Black people, for generations.

“The personal-property-tax bill and the 10-year tax-abatement bill were just recently referred to the Finance Committee. In light of the City of Philadelphia’s announcement that the budget hole has grown by $100 million, I think that considering policies that equitably spread the burden of paying for City services may become more appealing,” Brooks commented.

COUNCILMEMBER kendra Brooks, who was elected to Council last year on an insurgent Working Families Party ticket and may be most closely aligned of all her colleagues with the rising progressive movement, has played a key role in the debate over how best to share the pain in the coming year’s budget.

“We need to fund programs like affordable housing, homeless services, education, libraries, parks and recreation, and immigration services at this moment in time. Now is not the time to further divert much-needed resources away from our most vulnerable community members.”

The legislation was referred to a Council committee and hearing has yet to be scheduled.

Today, City Council in full session passed a budget that cancels the $19-million Police increase and shaves $14 million from its current funding level, a 3.5% cut. These monies will be diverted to other programs. Among the survivors is the African American Museum, whose allocation will be fully restored.

This budget must go through a second reading no later than June 25. Its passage is a foregone conclusion.

But the saga of the 2021 budget is far from over. Councilmember Maria Quiñones-Sánchez warned at a Philly for Change meeting on June 17 that too many uncertainties face the City going forward this summer. “We have already done one revision of this budget,” she noted. “I expect we will have to do another one in September.”

Will the likes of Penn and Comcast be tempting targets for budget-balancers by then?

Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.
Share    Send article as PDF   

Leave a Reply

Your email address will not be published. Required fields are marked *