DNC in Philly: Top 5 Ways Big-Government Policies Are Killing the Host City

Philadelphians Suffering, Fleeing Due to Policies that Hurt Economic Growth

July 21, 2016, Philadelphia, Pa.—As all eyes turn to Philadelphia next week for the Democratic National Convention, just steps from the Wells Fargo Center, Philadelphians are suffering from high taxes, union-controlled public schools, and a government-run liquor monopoly.

Philadelphia’s 12.3 percent deep poverty rate is the worst among the nation’s 10 largest cities. The city’s overall poverty rate is 26 percent. Years of big-government policies have created a crushing tax burden. As a consequence, more than 165,000 Philadelphians, on net, fled the city from 1985-2014—taking more than $7.8 billion in adjusted gross income with them.

Top 5 ways big-government policies are killing the City of Brotherly Love

1. Tax-a-Cola—This year, Philadelphia imposed a 1.5 cent tax per ounce on soda, diet soda, and other sugary drinks. This tax falls disproportionately on low-income earners. The tax was billed as a way to fund pre-K and community centers, but almost one-fifth of the money will go toward other purposes.
2. Cigarette Tax Hike—The city’s per-pack cigarette tax will rise from $3.60 to $4.60 on August 1, making Philadelphia’s cigarette tax the third highest among the nation’s big cities. Like the soda tax, the cigarette tax raises money on the backs of the city’s poorest residents and encourages cross-border smuggling, all to fund lawmakers’ spending addictions. Pennsylvania already led the nation in regressive “sin taxes” before the latest soda and cigarette taxes.
3. Teachers’ Union Failing Kids—For decades, Philadelphia’s public schools have been marked by academic failure, school violence, and financial mismanagement. In 2015, fewer than 1 in 5 Philadelphia students reached grade level in math or reading. Yet, the powerful teachers’ union consistently roadblocks reforms that would give students an alternative to failing schools. The union can even pluck dozens of “ghost teachers” from the classroom to work full-time as union employees.
4. Union Giveaways—Philadelphia’s new contract with the city’s largest municipal workers’ union, AFSCME District Council 33, raises members’ wages by 11.5 percent over four years. The city’s public pension system, $5 billion in debt, isone of the worst-funded in the country and the new contract does not address this debt. Philadelphians are also on the hook for their share of the state’s $63 billion public pension debt.
5. Modern-Day Prohibition—While Philadelphians suffer under Pennsylvania’s backwards, government-run liquor monopoly on a daily basis, the DNC will get a special exemption from state liquor laws. Convention-goers will be allowed to bring in liquor from out of state and purchase alcohol after 2 a.m.—activities that could lead to arrest anywhere else in the state. High prices and woeful selection send many Philadelphia shoppers to Delaware. Governor Tom Wolf vetoed a liquor privatization bill last year.

“There’s a reason families with school-age children are fleeing Philadelphia,” commented Nathan Benefield, vice president of policy for the Commonwealth Foundation. “Yet, the city’s leaders continue to push the same failed policies that are turning Philadelphia into the next Detroit.

“Philadelphia is a perfect illustration of a simple truth: You can’t tax your way to prosperity. But millions of people worldwide have risen from poverty through free-markets that reward individual ingenuity without crushing government burdens. America should look no further than Philadelphia to see how big-government policies prevent—not propel—job growth and poverty alleviation.”  

Nathan Benefield is available for comment. Please contact Gina Diorio at 862-703-6670 or gld@commonwealthfoundation.orgto schedule an interview.

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The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.