Thoughts on City Fiscal Crisis

My comments will have to be brief on the topic on account of specific projects I'm working on for my day job, but many have asked me my thoughts on Philadelphia's current fiscal crisis. I'll just leave it at three things:

* We can't have our cake and eat it too. If there's anything economists understand, it's that life is about trade-offs. If revenues are down because of macro-economic forces, then expenses have to be cut. For those who say "shame on Nutter" for cutting something they think is important, my question is, "OK, then what of what's left to cut would you like him to cut?" Because the choice is not between cutting Program X or not, but between cutting Program X or Program Y.

* Not dithering on casinos would've been helpful right about now. Look, I understand that casinos cause social problems, and that they're not a fiscal cure-all. But we passed them, we picked sites, we ear-marked the proceeds; and then as the rest of the state raked in far more than they estimated, we're still hemming and hawing.

* Property taxes are vastly better than wage taxes to depend on. In a mobile economy, you don't want to tax what can easily move across your border. I say this as one whose property tax bill will likely triple if reform is revenue-neutral, and go up even more if reform is coupled with efforts to decrease our reliance on wage tax revenue by upping our take on property tax revenue.

By chance, I happened to bump into two City employees in the past two days. Both are smart-headed, good-hearted, hard-working public servants, and both are feeling the withering effects of the extended crunch. Here's hoping they and others press on resolutely, and that we citizens support them in their efforts to ride this out.
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