PHILADELPHIA. Center City’s economic engine is ready to be reignited but will likely stall until more reductions to Philadelphia’s overbearing wage and business privilege taxes begin, Center City District President Paul Levy said in his annual “State of Center City” report.
The problem is that Mayor Michael Nutter — who championed the tax cuts as a councilman — isn’t planning to continue reductions to those taxes until 2014.
“It’s clear he’s got to be conservative. He’s the one who has to balance the books but we think the sooner he announces a restart [in tax reductions] it will have a psychological effect,” Levy said. “2012 would be great for restarting of wage and business privilege tax reductions. I’d love to say 2011, but I’m a realist.”
During an hourlong look at the ups and downs of Center City’s recent past and future prospects, Levy said downtown Philadelphia fared better than most other metropolitan areas — considering housing prices only fell about 7 percent since 2006 and some job sectors actually saw growth. But the city should be careful to fall behind in any recovery that Levy said appears close.
City Finance Director Rob Dubow said the administration is juggling the interests of business growth and the decline in services that those taxes currently pay for.
“If reducing rates also means you reduce services, the effect [on the city’s economy] is greatly reduced,” Dubow said.