Tax-policy task force gets mixed response

The initial recommendations of Mayor Nutter's tax-policy task force received a mixed reception at a hearing in City Hall yesterday, as business leaders endorsed the findings while other witnesses called them overly narrow and unimaginative.

Formed in March, the task force has tentatively concluded that Philadelphia must lower its wage and business taxes to remain competitive, and that the tax burden should shift to property taxes once the city fixes its problem-plagued assessment system.

Those findings are not groundbreaking.

With a few exceptions, the eight-page document outlining the task force's preliminary conclusions largely echoes the findings of the much larger and better financed 2003 Tax Reform Commission, as well as numerous academic studies of Philadelphia's tax structure.

For many witnesses, the new recommendations did not cover nearly enough ground.

"It's time for radical change," City Councilman Bill Green told the task force, arguing that reducing tax rates would do little more than stem the bleeding so long as the public school system remains deeply troubled.

Quoting the business guru Peter Drucker, Green told the task force that "taking a defensive position can, at best, only limit losses. We need gains."

But the 17-member task force - which had no budget or dedicated technical staff, and was composed of academics, business executives, and community leaders - appears to have taken a more limited view of its mission. It did not offer detailed recommendations on how, for instance, to reduce construction costs.

Nor did the initial report detail how the city should overhaul the Board of Revision of Taxes, or mention business- and property-tax legislation introduced in City Council this year.

Even the 10-year property-tax abatement, which Nutter highlighted as something the task force would focus on, is barely mentioned in the initial recommendations.

"We would welcome some more concrete policy recommendations from this task force, and I hope they are forthcoming," said Councilwoman Maria Quiñones Sánchez.

The task force's tentative recommendations included:

Returning to regularly cutting the wage and business-privilege taxes. Nutter and City Council have delayed the tax cuts to 2015 in light of the economic crisis; the task force recommended resuming the cuts by 2012.

Lowering interest rates and penalties for tax delinquents to encourage payment, paired with a tax-amnesty program.

Restructuring the business-privilege tax so that the rate on firms based in Philadelphia would be equal to or lower than that of firms that do business in the city but are based elsewhere.

Shifting to an actual-value property-assessment system, something that is under way.

Investing more on tax collection and property assessment staff and technology.

Eliminating, over the long term, some of the city's 19 personal and business taxes.

John Westrum, the chief executive officer of Westrum Development, was among those who wondered aloud whether the task force had explored a broad-enough range of problems. While characterizing the recommendations as "great," Westrum said this sort of report often goes "on a shelf and nobody ever looks at it again."

"I'm hoping that's going to change. I do truly hope the administration will do something with this," Westrum said.

The task force's final recommendation are due in mid-September. Panel chairman Harold Epps, the chief executive officer of PRWT Services, said the task force would take the public testimony into consideration when drafting the final report.

City Finance Director Rob Dubow said that the task force operated independently and that the administration was looking forward to reviewing the recommendations.