Mayor Nutter's Final Grades

(December 2015)

It must be a heckuva thing to be the Mayor of Philadelphia.

You get to bask in the city's collective pride leading the Phillies World Series victory parade and welcoming the Vicar of Jesus Christ to Philadelphia.  But, you must hang your head bearing the full weight of civic shame when a four-year old innocent perishes weighing only 34 pounds under the watch of the Department of Human Services, and when a building collapse takes six lives as it exposes horrific failures in the Department of Licenses and Inspections.  

He aspired to serve based on the ideals embodied in the Oath of the Athenian Citizen and, in many ways, Mayor Michael Nutter transmits Philadelphia to his successor not only, not less, but greater and more beautiful than it was transmitted to him.  

While Nutter's legacy will be discussed and debated as he leaves office, each consideration will be viewed through a particular lens.  I pay close attention to how the city raises and spends its money, so before looking ahead to the next administration, I cast a glance at what candidate Nutter promised in the issue areas where I have focused much of my public advocacy.  Let's take a look at the mayor's tenure based on the bar he set for himself.

Candidate Nutter declared* he would "reform the process by which the City budget is devised and debated in order to achieve greater levels of public participation and government performance." 

Early in the Nutter Administration, there were some exciting efforts made to engage the public in budget deliberations and discussions.  But it didn't stick and recent budgets have been crafted behind closed doors with a bunker mentality.  Last year, the mayor unveiled a nifty online tool to visualize how money would be spent in the proposed budget, but it was nowhere near as detailed or as useful as the fully searchable, detailed-to-the-last-penny Bulldog Budget a mild-mannered candidate for City Controller created years ago.  (  Promise unfulfilled.

Candidate Nutter declared he would "revolutionize the budgeting process by putting the focus on outputs not inputs." 

You say you want a revolution, well you know, we are still building a budget the old-fashioned way and focusing on inputs.  However, pursuant to legislation passed into law a few years ago, the city should be moving toward program-based budgeting.  With old habits so hard to break, we'll have to see if this revelation turns into the promised revolution.  Promise (so far) unfulfilled.

Candidate Nutter declared he would "convene the stakeholders in an honest and cooperative effort to redesign the pension and health benefits for City employees in order to make them sustainable for all concerned." 

There were some nice things said about addressing the city's growing pension crisis and the growth of the cost of health benefits provided for employees, but not much done about it.  Provisions in new contracts with the city's unionized workers allow workers to voluntarily opt out of the traditional defined-benefits plan into a new defined-contributions plan, but not many (have any?) have entered the alternate system.  Other negotiated changes could reduce future health costs, but those savings are dwarfed by the growing unfunded pension obligation.  The pension mess is even more messy than it was eight years ago -- Philadelphia's pension fund is now less than half funded (it was just more than half funded when Nutter took office) with an unfunded liability of about $6 Billion.  It's just the next mayor's problem, now.  Promise unfulfilled.

Candidate Nutter declared he would "sustain the scheduled reductions in the Wage Tax to a rate of 3.25% for both residents and non-residents by 2015" and "establish a certain schedule for the gradual elimination of the Gross Receipts portion of the Business Privilege Tax over a five-to-seven year period and the gradual reduction of the Net Income portion of the BPT to the current rate of the Wage Tax." 

After the global economic turmoil early in his tenure turned Michael Nutter, tax cutter, into Taxmaster Mike, Mayor Nutter actually raised taxes during his years in office.  Real Estate Taxes went up again and again and again.  A “temporary" increase to the Sales Tax came and then never went away.  Other taxes came and went up as well.  At least the Business Privilege Tax is gone -- actually, the tax remains, but the name is changed.  At the end of Nutter's term, the Wage Tax stands at 3.9102% for residents and 3.4828% for non-residents (it had been 4.2190%/3.7242% when Nutter took office), the Gross Receipts portion of the Business Income and Receipts Tax is 1.415 mills (unchanged from when Nutter took office) and the Net Income portion is 6.41% (down from 6.5% when Nutter took office).  Promise unfulfilled.

Candidate Nutter declared he would "support a revenue-neutral move toward Full Value Assessment by the [Board of Revision of Taxes] for the purposes of the Real Property Tax matched by a proportional reduction in the millage rate by City Council." 

After some foot dragging and a nearly disastrous effort to use what would become known as the Actual Value Initiative to raise additional tax revenues for the city and school district, the Nutter administration finally completed a thorough and much-needed revenue-neutral reassessment of all city properties for tax purposes.  Make no mistake; this was a very big deal and an accomplishment that had eluded mayors for the better part of the last half century.  For the first time in living memory, real estate taxation is not criminally unfair.  Still, while similar properties are now valued similarly, values must be further refined for even better accuracy and it is not a good sign that the city has failed to keep up with legally mandated annual assessment adjustment after the massive revaluation.  This was not easy and it was not perfect, but it was accomplished.  Promise fulfilled.  

Candidate Nutter declared he would "support a fair and accurate reassessment of property in the City to current market value with the provision that safeguards be in place…that ensure no Philadelphian is forced to sell their [sic] home because of an increase in property taxes," and that he would "propose and work with City Council to enact a homestead exemption that will exclude some fraction of assessed value from taxation for all property owners" and "propose and work with City Council to enact a cap and deferral plan for paying property taxes that will protect property owners from unreasonably large and rapid increases in their taxes." 

Working with city council, Mayor Nutter enacted a homestead exemption as well as other policy measures to soften the blow of the citywide reassessment.  As a result, a large majority of city homeowners actually saw reduced Real Estate Tax bills after the completion of the Actual Value Initiative and only a small fraction saw their tax bills increase by a significant percentage.  There have been no reports of any homeowners being forced to sell their homes due to the reassessment efforts.  Promise fulfilled.  

Candidate Nutter declared he would "modify the 10-year Tax Abatement to encourage development beyond Center City and help provide relief for the City's critical need for affordable housing." 

This policy initiative never moved forward and the abatement program is as it has been.  Promise unfulfilled.

Candidate Nutter declared he would "present realistic estimates of the costs and funding sources of new proposals" and "base my budgets on a realistic estimate of future revenue." 

To their credit, the Nutter number crunchers have been reasonably clear-eyed and straightforward with most of their bean counting.  Promise fulfilled.  

Candidate Nutter declared he would "design a policy for issuing new municipal debt and stick to it." 

That was his story and he is sticking to it.  Promise fulfilled.

Candidate Nutter declared he would "establish a Rainy Day Fund." 

It took a few years to get it done, but Philadelphia finally joined most other sophisticated state and local governments with a formal place to save for a rainy day.  Promise fulfilled.

Candidate Nutter declared he would "direct all agencies of City government to pursue non-local funding opportunities to bring additional resources to City priorities." 

Consider them directed.  There have been some happy stories to tell of agencies finding new funding opportunities (but we should build and broaden these successes).  Promise fulfilled.

Of course, Mayor Nutter scored successes or suffered setbacks in other areas as well.  Any accounting of individual policy initiatives misses a more complete picture of a healthy forest for a focus on individual trees.  There remains so much work to be done to make Philadelphia a preferred place to live, work, and visit.

Thank you, Mayor Nutter, for your efforts.  Best of luck, Mayor Kenney, continuing the work.

*All promises are taken from Candidate Nutter's 2007 "Honest Budget Now" and "Better Housing Now" campaign position papers.