On September first, the Philadelphia Water Department (PWD), with the full support of the advocate appointed by the Water Rate Board, the body that sets rates, will raise rates again. This will be the 7th consecutive year that PWD has, without public input, negotiated a rate increase with the rate board’s advocate.
The effect is that rates have risen by 52%. Far outpacing inflation and creating an ever-increasing burden on working people in Philadelphia.
This year’s rate increase is the second year of a two-year rate increase negotiated by the rate board’s advocate and PWD, and their negotiated settlement to pay for the City’s low-income water plan, TAP. Both rate increases were negotiated in secret (the parties meeting behind proverbial closed doors say it’s private, not secret).
The issue isn’t whether the low-income plan is needed. It is how should a public social welfare program be paid for? SNAP, the program that helps put food on the table for people struggling, isn’t paid for by a sales tax on food. The City’s low-income housing plans are not funded by a rent tax. The new program that helps people who can’t afford the new SEPTA fares isn’t paid for by a sales tax on each SEPTA ride. Why should the City’s low-income water program be paid for by a sales tax on water?
The rate board’s advocate and PWD say it’s not a sales tax, it’s a surcharge based on how much one spends. The reason they cannot call it a sales tax is simple. It is illegal in Pennsylvania to charge a sales tax on water.
The rate board’s advocate, which has no clients, no advisory board, and answers only to the rate board, is Community Legal Services. According to its website, Community Legal Services’ management consists of four lawyers. Two from “white shoe law firms” that represent corporate clients and two who are lawyers for major corporations. Not a single working person is on CLS’s leadership team.
CLS doesn’t object to “surcharging” (taxing) water. They appeared before a City Council Committee and failed to raise the issue of who should pay for the program. The difference between paying sales tax and paying from the city’s operating budget is large. Sales taxes are regressive. The less one makes, the higher the tax rate. The person making $30,000 pays a much higher percentage than the person making $ 300,000. In addition, poverty is a structural issue, not one created by water consumers.
According to the hearing examiner, “TAP rates are charged to all customers who do not receive the discount. They are intended to recover the revenue losses associated with the customer assistance program. “
Why does CLS advocate for allowing speculators, real estate developers, and companies that do business in Philadelphia but are located in the suburbs to avoid paying a fair share for the program? The costs to ratepayers are considerable: $50 million.
Why doesn’t the Rate Board’s advocate ask City Council and the Mayor to fund the program? Why doesn’t PWD? Perhaps that is why the Rate Board’s advocate has no clients? Perhaps that is why PWD and Rate Board Advocate don’t properly advertise the proceedings? Not a single ratepayer came to the last public input hearing. Not one.
Ms. Kathryn Sophy, the hearing examiner, writes, “Both Mr. Haver and the large user group raised concerns about the impact of the surcharge on consumers. While these issues are a matter of concern , the issues may only be addressed in future general rate proceedings. . . The Rate Board lacks the authority either to declare the TAP-R surcharge a sales tax or to transfer the operating expenses of administering the City-mandated program to Philadelphia’s General Fund. . . . The Rate Board must authorize charges to customers of the Water Department. The Rate Board cannot rely on the possibility that other sources of funding for the TAP program may become available in the future.” She never considers who should pay, but relies on the shell game: this isn’t the right time to raise issues of justice.
The rates will go up on September 1st. Over 50% in 6 years. The sales tax on water will continue.
The hearing examiner writes: PWD and the rate board’s advocate should be commended for continuing to pursue a compromise, adding to their workload even after the filing of briefs in an effort to reach an outcome satisfactory to both.” (The Hearing Examiner does not consider if the closed-door settlement is satisfactory to the rate payers.) No doubt her praise for the increase will guarantee her reappointment in years to come.
As Dostoevsky wrote, “Nothing in this world is harder than speaking the truth. Nothing is easier than flattery. “
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