Thursday, January 24, 2008

And The Media Says Nothing

Photo: Rendell instructs Ravenstahl in the fine art of splitting hairs.

Did I Slip Into A Parallel Universe Or Something?

On Tuesday, Gov. Ed Rendell “popped in” to Marty Griffin’s morning talk show on KDKA and dropped a virtual bomb shell. Rendell calmly and matter-of-factly stated Philadelphia has “selective enforcement” of their drink tax. (Like, doesn’t everybody operate this way?)

Now investigative reporters such as Marty spend their whole lives perfecting and honing their craft. Each reporter probably has a different method for wringing what they want out of people. Getting people to trip up, spill the beans, inadvertently say that one stupid word they wish they could just suck back into their mouths. So just imagine Marty’s dumbfound condition as Rendell coolly plops a public admission in his lap that Philadelphia illegally enforces their drink tax. (Like, doesn’t everybody operate this way?)

Not trusting his own ears, Griffin asked Rendell to elaborate and Fast Eddie was quick to comply. Rendell explained there was something in the Pennsylvania constitution called the “uniformity clause.” As it applies to taxes, this clause basically says that for a tax to be legal, it must be applied uniformly. Rendell lamented that when Chicago enacted their drink tax, they only applied it to those bars and restaurants along the (Downtown) Loop. Rendell and Philly would have preferred to do the same, but unlike Chicago, our constitution’s uniformity clause mandates that everyone must be taxed equally, fairly and “uniformly”. (Bummer)

So to get around things and to continue doing whatever they damn well pleased, our pesky state constitution not withstanding, clever Rendell/Philly decided they would “selectively enforce” their “uniform” tax. They would check up, audit and hound the establishments they wanted to hammer. Whereas they would just “look the other way” (a Rendell quote) with the taverns they wanted to cut some slack. (Possibly the ones who were campaign contributers? Friends? Relatives?) They reasoned they had done their constitutional duty by *placing* a “uniform” tax on the books. Collecting the tax was another matter, however. One they reasoned was not regulated by the uniformity clause. (Like, doesn’t everybody operate this way?)

So I’m dumbfounded. I can’t believe my ears. Talk radio has been non-stop all over this for the past two days. The Rendell interview has been blasted from one end of the state to the other. Calls are being made for an investigation by the Attorney General. Lawyers for the Restaurant Association (Philly and Pgh) are in hyper-mode. Dan Onorato was hunted down for his reaction, interrupting his Excellent European Vacation, as it’s now quite clear to all this tax is DOA in Allegheny County. Leaving Dan holding the bag without a pot to piss in. Quite clear that Rendell has just blown Dan’s ass clear out of the water for who-knows-what reason. There’s even speculation that Philly’s drink tax will now spontaneously combust under the weight of all the lawsuits yet to be filed.

But…… Not a word in the print press. Not a syllable on the evening news.

Have I slipped into a parallel universe or something?


Schultz said...

Great post. Can you believe the arrogance of this guy? I think Fast Eddie is banking on Hillary winning the Presidency and hooking him up with a White House cabinet post (Secretary of Energy, perhaps?) and so he's getting a little too careless with his words. Too bad he backed the wrong candidate.

"Ahhhhhh, where there's an impact on the local neighborhood taverns, ahhhhh, we may have some selective enforcement..."

Anonymous said...

I've been listening to KDKA's coverage and believe that they are blowing this whole thing out of proportion. As being on record opposing the drink tax, their hosts and their supporters hope that this is a back door means to repeal the drink tax.

"Full enforcement" is a concept that would be quite unpopular for conservatives in particular. While it is congruent with their "law and order" mentality, the cost of enforcement flies in the face of fiscal conservatism. For all of their criticism of "big government," it would be impossible to audit every restaurant and bar for tax compliance. In an ideal world, businesses and individuals would pay all taxes due in order to follow the law. However, the threat of legal action and penalties is usually required for compliance. "Selective enforcement" is a simple cost-beneft calculation. You focus on a few big fish and/or high-profile "neighborhood bars" and we get a larger return on investment for our enforcement dollars because it increases the fear of prosecution. Thus, if you want "full enforcement," the county will have to invest in personnel and technology to beef up their auditing capabilities.

All of the impending lawsuits will simply cost the county and/or Commonwealth millions of dollars and will not result in the drink tax repeal. The most likely result is a court-mandated expansion in enforcement resulting in higher personnel and technology costs. It will just dilute the revenue stream and bring about a new round of taxes.

Mark Rauterkus said...

Thanks for the recap.

Shred said...

This is the interview. I found it on the KDKA radio web site:

No this is no understatement listen for yourself starting at 4:55, this is jaw dropping.

Rendell: And as for the liquor er the drink tax, when it, we proposed it and when it was passed in Philadelphia, there was all sorts of outcry and knashing of teeth by restauranteurs, it was going to kill their business, ba ba ba ba, if you come to Philadelphia today Marty you'll find the restaurants doing probably as well as any city in the country except New York. So it hasn't any negative effect at all, ah and in the neighborhood taverns where, you know, it might have had an effect, let me say we have selective enforcement.

Marty: You have selective enforcement, what do you mean sir? I've heard this

Rendell: Well, we don't quite enforce in the neighborhood taverns as well as we do in the big hotels and restaurants.

Marty: You look the other way sir.

Rendell: Umm you can say that.

Marty: Yes sir and so they're pleased, as so what you did is you found some sort of compromise to make it easier on them is that what you're trying to say?

Rendell: Sure.

Char said...

This is a HUGE deal. In fact, it goes to the very heart of government corruption. Anonymous, I think you’re confusing “uniform enforcement” with “100% total and complete enforcement.” Not having enough money to be able to audit every bar every year is not the issue. Purposefully, willfully ignoring a segment of the bars …. Never checking up on them at all …. Letting them know they’re (wink, wink, nod, nod) “safe”……That’s corrupt behavior and that is the issue.

The freakin astonishing part of this whole thing is that Rendell matter-of-factly acknowledges his corrupt regime with the same ease and security as your everyday mob boss. Or Banana Republic (not the clothing store) dictator.

So a tax is supposedly levied on all bars. And so to curry the favor, support (and vote) of some of the bar owners, Rendell and company puts the word out on the streets that *some* establishments will be looked over. Which ones? Those who contribute heavily to those in office? Does this arrangement evolve into giving additional “protection money” to mid-level bureaucrats so as to insure that an “exempt” bar retains its “exempt” status? Would the exempted bars ever think of voting the incumbent out of office? Or his hand-picked successor? Ever? What’s to stop the exempt bar owner from charging the tax anyway but just putting it in his pocket? How is any of this scenario any different from the lawless environment of Chicago in the ‘20s?

I’m lastly confused about the need to try to frame either this problem or its solution in terms of liberal vs conservative. D or R. Red or Blue.

Goodness sakes. Sometimes things are plainly and simply either right or wrong. No more, no less.

TrolleyRider said...

Char agree completely.

Anon, your logic is flawed to say the least. That's like saying unless it is guaranteed that all shoplifting could be stopped in the city of Pittsburgh, someone with Republican beliefs couldn't possibly support a law banning shoplifting. And even if full enforcement was promised, someone with Republican beliefs couldn't support that either because of the cost of enforcing such a law.

This would be like if the city government said shoplifting is illegal, but anyone who is registered Democrat can shoplift as much as they want and we promise not to prosecute them.

I guess you support that kind of governing, Anon, but Republicans (I assume I can speak for the majority of Repubs here...since as one I make up 10% of the 10 Republicans allowed inside city limits at any one time) certainly don't

Anonymous said...

A few clarifications to Char and TrolleyRider...

1) I was trying to give Rendell the benefit of the doubt, but his subsequent "clarifications" seem to describe intentional non-enforcement for establishments based on size and location from the center city. I'm not quite cynical to believe that it was done for solely political purposes, but I'm sure it's part of the calculation. I don't think it's as explicit and intentional as the mob references imply.

2) Concerning the argument Trolleyrider put forth "extending" my argument, I don't believe that I argued that Democratic establishments should be exempted for shoplifting/etc. For the record, the tax should be uniformly enforced throughout Philly and Allegheny County - big/small, Rep/Dem., etc. I argued that full enforcement is untenable without increased spending and this would cause fiscal conservatives even more heartburn than the tax itself.
I still believe that, while full enforcement is not possible, the inability to do so should not be used as a back-door means of repealing the drink tax.

I'll be interested to see where this story goes...

Char said...

You are much kinder and less cynical than I, Anonymous. (For affording Rendell the benefit of the doubt)

I too am interested to see where this all goes. With Rendell, with Onorato...... Even with Nutter who has just proudly taken the oath of office promising "a new day, a new way, transparency and justice for all."

Even after thinking about this whole thing for these past few days..... I can't fathom why or how Rendell opened up his mouth as he did. Any ideas?

EdHeath said...

Just so you know, Rendell was on the Sunday Business Page with Jon Delano the Sunday before last, and said the same thing. He said they weren't as diligent in enforcing the tax on smaller taverns, because he didn't want to drive them out of business. It is a sort of "what was he thinking" moment. But you can see where Rendell might be trying to give Onorato political cover, should Onorato try to cut smaller taverns a break. Now I am certainly not in favor of selective enforcement, especially when it comes to tax collection. I don't think anyone should be above the law, especially in terms of people doing their fair share. The state legislature or the county council could have inserted provisions about how if a tavern's size or profits or markup is at a certain level, they could pay a lower tax or no tax. Still, I can see where it is not in anyone's interest to drive tavern's out of business. Hopefully someone will come up with a good additional piece of legislation.

Char said...

But Ed ..... the point here is that "selective enforcment" is ILLEGAL. And our Governor feels very comfortable admitting that he and his posse are engaging in illegal activities. This means our corrupt governemt thinks so very little of us that they can't even put out the necessary effort to hide their corruption.

You said it yourself ..... they are in charge of writing tax law. They can author it anyway they want, taxing as broad or wide of a segment as they want. Yet they choose to set it up in such a way that it amounts to sending out their bag men to collect taxes from only those they wish???!!?? And they whine about not having any other choice in the matter??? And we are all fine with this???!!??

Not only are we fine with this, but we applaud them for "looking out for the little guy". We have to take them on their word of course, because illegal activities are never documented very well. So we'd never know if they cut their relatives, friends, campaign contributors slack instead of just "the little guy".

This is just unbelievable.

EdHeath said...

But not surprising. Probably worth a letter to the PG (you only get one every three months).