Mayor Papenfuse Embraces Democracy

In a stunning departure from his past positions, Mayor Eric Papenfuse has professed support for elected politicians controlling public purse strings. Could the little oligarch’s puppet be a closet democrat?

The remark came amidst the mayor’s rant against the Civil War Museum, an entity he views as unfairly benefitting from city largesse. Of the Hershey Harrisburg Regional Visitors Bureau, he said, "It's just wrong to have millions of dollars in city assets controlled by an unelected group of self-appointed board members with no real connection to Harrisburg.”

That position is radically different than the one Citizen Papenfuse embraced when he advocated for a Midtown Improvement District (MID) to bankroll additional security in Midtown (around his business) after a well-publicized robbery.

The MID would have come into existence had the matter been placed on a ballot sent to all property owners within the District’s proposed borders. Unless 40% of property owners had voted 'no', the District would have been established with the right to levy assessments against area residents. So in the spirit of representative democracy, property owners who failed to vote would have been counted as ‘yes’ votes. The MID would have been run by an unelected board with discretion to spend the funds as they saw fit. The MID effort died on the vine before reaching fruition.

All of that is now in the past though. Since becoming an elected official, Mayor Papenfuse now sees the wisdom of leaving public spending to elected officials. What an epiphany.)

More Museums are the Answer

If, as the saying goes, government decides who gets what and how much, Mayor Papenfuse is getting the hang of being a politician, not a good one, but a politician nevertheless. Fresh from bungling the Fourth of July and presenting the school board with tax abatement figures that don’t add up, he has aligned his crosshairs on the Civil War Museum.

He claims the museum does not benefit the city and has asked the Dauphin County Board of Commissioners to stop funding it with dollars earmarked for promoting Harrisburg tourism. The Hershey Harrisburg Regional Visitors Bureau receives one quarter of one percent of the hotel tax to promote area tourism. Most of that money goes to the Civil War Museum under an agreement negotiated by Stephen Reed before he left office.

The Mayor notes that the Civil War Museum’s lease agreement states that it should “endeavor to operate as a self-sustaining enterprise” and he appears poised to push the fledgling out of the nest to see if it can fly. In its place, the Mayor’s spokesperson, Joyce Davis (no relation), proposes marketing the Fourth of July (we’ve seen how well that worked), Kipona, and summer enrichment programs for kids. Even if the administration actually informed people where the events were, Fourth of July and Kipona have never been big revenue generators. I’m skeptical that summer enrichment programs will help much either. Some grand plan is clearly needed.

Before jettisoning any particular museum, the Mayor should understand some basic museum economics. Single museums often do not fare well. However, cities that have clusters of museums tend to see a symbiotic effect. The new Susquehanna Art Museum on North Third Street presumably will be completed at some point. Downtown has the State Museum and the Whitaker Center for the Arts so another museum between downtown and the Civil War Museum’s Reservoir Park location could help link them. I’m not arguing for us to buy back Annie Oakley’s underwear. We are well rid of Stephen Reed and his cowboy fetishes.

No, we should build museums that reflect Central Pennsylvania culture and nothing says Harrisburg like crooked politicians. So let’s build a Political Corruption Museum. Some may say the Capitol Building already serves that purpose. Three times more tax payer money changed hands than should have when it was built in the early 20th Century and five people went to jail for graft as a result.

Recently, the brass plaques beneath the portraits of three former Speakers of the House and one past Senate president pro tempore hanging in the capitol building have been altered to include their criminal convictions for corruption.

So put all the museums on a grand tour and keep expanding it. I’m thinking a Scrapple Museum at the Broad Street Market with a stop off at that tourist magnet, The Midtown Scholar, could bridge the gap between the Susquehanna Art Museum and downtown. A trolley car could serve double duty by ferrying visitors along the museum route without forcing them to pay the parking fees Standard Parking charges.

Don't Take the Tax Abate

Mayor Eric Papenfuse has leaked his tax abatement proposal to the Harrisburg Patriot and other media outlets. Although, the amount of tap dancing coming from city hall suggests this was not a planned leak. The proposal calls for a 10-year tax abatement on improvements made to vacant lots and existing structures.  The new administration gets points for persistence, not for originality.

The mayor apparently never heard the old saw that trying the same thing repeatedly while expecting a different result is insanity. Or has he? At heart, I don’t like disparage people, so I’ll assume this administration doesn’t really believe that this round of tax abatements will produce anything other than the real estate carnage the previous abatements have. I’m much more comfortable being a cynic. So let’s assume someone is benefitting from this failed policy maybe, say, um…real estate developers?

Tax abatements benefit developers and few others. Because they shift the tax burden to existing homeowners, abatements depress existing home values by making the tax-abated properties more attractive. The developers, however, take blighted properties, raise the value of the properties they develop while paying below market taxes, and then sell the properties at a higher value. The buyer gets a new property and a ticking tax bomb with a timer set at ten years.

Harrisburg has been through this before. The Capitol Heights development offered ten-year phased-in tax abatements. The homeowners paid 10% of the property tax the first year, 20% the second and so on. As the tax bite escalated, so did the foreclosures.

Exacerbating the situation is Dauphin County’s tax assessment process. New homes are assessed at current market rates while older homes hold values from the year the last assessment was performed. State law only permits a county-wide reassessment. Obviously, those with older assessments are anxious to hang on to the lower figures as the new buyers are saddled with higher assessments, and when the abatements abate, disproportionately higher tax bills. In at least two cases, it has taken court orders to compel counties to reassess their properties.

Struever Brothers, Eccles and Rouse, the Capital Heights developers built the properties and sold them. They kept the profits from the sales and paid virtually no property tax on the properties while they owned them. Now, other developers including J. Alex Hartzler, whose Harrisburg Capital PAC donated $103,147 to Papenfuse’s campaign, are lining up for more public money seemingly unconcerned or willfully ignorant of Harrisburg’s tax abatement track record. One of my sources quotes Mr.Hartzler as claiming to know nothing of the Capital Heights foreclosures.

Hartzler and other abatement plan proponents point to similar programs in New York and Philadelphia. Hartzler is dismissive of those who try to make the common sense argument that Harrisburg is not Philadelphia. In a tweet on June 19, he stated “economics and math are not subject to geographical or political boundaries. ‘HBG is not Philly’ demonstrates ignorance of both.” Hartzler’s argument discounts both the amount of untaxable property within Harrisburg and the assessment issue outlined above. Philadelphia is its own county and Harrisburg is a part of Dauphin County.  A county-wide reassessment is far more likely in Philadelphia than Harrisburg. In fact, Philadelphia began its reassessment process last year. Philadelphia also has several programs of assistance to senior citizen and low-income residents. The report calling for the Philadelphia abatement plan cites local economic conditions such as high construction costs versus relatively low median income as justification for the abatement program. While Harrisburg does have a relatively low median income, its construction costs are nowhere near those of Philadelphia. For more reasons than scale, Philadelphia is a very different animal than Harrisburg.

Raising the city’s minimum wage would raise the median income, but that would not benefit those who finance mayoral campaigns.  So I can guess its likelihood of passing.

Again, I do not wish to think ill of Mr. Hartzler. He could not possibly be as stupid as his tweets suggest.