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.)

Inside the Papenfuse Echo Chamber

On July 4^th, a line of traffic stopped in the eastbound land of the Harvey Taylor Bridge to watch the fireworks from City Island. They were in for a long wait. As part of its ‘rebranding’ of the city, the Papenfuse administration had expanded the Independence Day festivities to include two other locations, Reservoir Park and Italian Lake. In the process, the City Island fireworks were moved to the 5^th to coincide with a Harrisburg Symphony Orchestra riverfront concert. The problem, of course, was that many people did not get the memo, or in this case, the tweet.

City of Harrisburg Communications Director, Joyce Davis (no relation), explained the city’s publicity campaign in an online forum on PennLive.com. The city sent out a bulk mailing detailing the changes, but many appeared to have arrived after the event. Davis also claimed notices were enclosed in city water bills, but no one has found such a notice yet. Perhaps it will be in next month’s bill. Finally, Davis claimed that she tweeted news about the event to 1,000 or so followers, but sent a minimal number of tweets rather than multiple posts. The tweets directed tweetees to the city’s Facebook pages, the city’s main page and “Stay and Play Harrisburg”.

The Independence Day celebrations traditionally have attracted many from surrounding communities to come into the city. They, clearly, would not have been reached through the city water bill stuffers even if those notices did in fact exist. Inexplicably, many West Shore residents do not rise each day and perform a twitter search for “Harrisburg”, “Stay and Play Harrisburg”, or “City Island Fireworks”. If they are not part of the city’s rabid 1,000 twitter followers, they could have completely missed the great fireworks tweet amid the torrent of 140 character missives that flood the twitosphere. Clearly, these folks should have retroactively followed the directions they received in the direct mail flyer that arrived a week after the event.

Like spawning salmon, many city and suburban residents attend Independence Day fireworks out of instinct to “ooooh” and “aaaah” at the night sky. Perhaps no one can fault the Administration for moving the event to the 5^th to cut costs. Although in fairness, the Thompson Administration always found corporate sponsors to fund the fireworks and this one has not.

Papenfuse’s minions were quick to point out that the election was held in November and they did not take office until January. Clearly, they had other more pressing issues than fireworks. Fair enough, but raising corporate donations was no problem for the Papenfuse campaign when it raised more that $330,000. Perhaps the same effort on behalf of city’s image that many of those donors wish to burnish would be appropriate.

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.