by KYW's Mike Dunn
In the face of the slowing economy, Philadelphia mayor Michael Nutter (file photo above) appears to have cut a budget deal with city council that has him backing off somewhat on cuts to wage and business taxes.
Sources tell KYW Newsradio that the mayor has decided to scale back slightly on the aggressive tax reductions of the budget he unveiled in February. The elimination of the gross receipts portion of the business privilege tax will happen over ten years rather than eight. Nutter's plan for the first-ever reductions in the net income portion of the business privilege tax will still happen, but only at a rate half of the original plan.
The sources say the mayor's plan for wage tax cuts over the next five years will be tweaked also so that it is slightly less aggressive. And the start date of the so-called "Cohen Tax Bill," calling for wage tax cuts for the working poor, will be delayed from 2013 to 2014 so that it has no impact on Nutter's five-year projections.
The changes are driven in part by declining revenue projections, including larger-than-expected drops in revenues from the real estate transfer tax.
Nutter, while not confirming any of this, says his commitment to tax reform remains:
"My main goals here are to make sure that we continue our overall tax reduction strategy, whether its wage tax or business taxes. I think we'll be able to accomplish that, and to me that's what most important in terms of the tax question. The size of the reduction, pace of reduction -- all of that is a function of the larger, broader conversation and negotiation that takes place."
Council was expected to meet in committee on Wednesday to vote on the deal.
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