King of Prussia: the child of Philadelphia tax structure

Your boy Tom Infield had an 1,800-word (not including sidebar) profile of King of Prussia – the 27,000-person outpost northwest of Philadelphia famed for the mall of the same name – for the Inquirer yesterday.

It is the prototype for suburban sprawl that is trying to remake itself into green(er)-friendly, small city life to retain a growing environmentally-conscious and urban drawn population who still might be concerned by the rampant crime of Philadelphia.

The thing is I don’t think any of the 60 online comments for the story came after having read the whole thing – I know mine didn’t.

Because, while Infield’s piece suggests King of Prussia was developed by the convergence of major roads at its doorstep – 202, 422, I-76, and the Pennsylvania Turnpike – it didn’t mention anything about Philadelphia’s aggressive tax structure.

This is something I read quite a deal about for my honors thesis, which focused on Philadelphia’s Republican Party. Indeed, I actually posted on this very topic back in January on the blog I made for the thesis.

I made mention of something 2003 Republican mayoral contender Sam Katz said that stuck with me, after reading it in an academic review of that election, written by Jeffrey Kraus of Wagner College.

Katz said that one of his goals as mayor would be to attract 250,000 residents into the city over a 15 year period. By cutting business taxes, Philadelphia would retain businesses. As Katz explained it, “our tax structure created Cherry Hill and King of Prussia.” (Emphasis added)

Katz wanted to slash the city’s wage tax from 4.4 to 3.5 percent by issuing a $750 million bond to be repaid over the subsequent decade. It was a major talking point by Sam Katz and one of the major differences between he and opponent John Street – and there were plenty.

Current Mayor Michael Nutter referenced making cuts to the city’s wage tax, though he hasn’t made progress on that, as far as I know.

In the post, I mentioned how this region – so blessed with employment, many white collar options – they haven’t come back to the city as many did to New York in the 1990s.

…the region features the world’s largest management services company in the Vanguard Group, located in Valley Forge, the pharmacuetical giant Merck & Co. has major offices in Horsham and Blue Bell, and the credit card services corporation MBNA, Du Pont Corp. and Christiana Health Care System all are based in Wilmington, Del.

These businesses are based where they are based because of taxes. They sure would look great in shiny new skyscrapers in west Center City, which could stand to get a whole lot denser.

All of this came flooding back while reading Infield’s KOP profile yesterday. The one mention of taxes Infield did make should remind us all – not just the Philly tax reform policy wonks – why we need to care about the city’s tax structure.

This portion is about KOP’s enormous cluster of retail, forming the second largest mall in the country:

“The footprint . . . is large enough to accommodate five of the Great Pyramids,” a sheet of “fun facts” reports.
With an estimated 26 million shopping visits annually, it’s the main draw for the nearby Valley Forge Convention and Exposition Center, which opened its two hotels in the mid-’70s.
“I’ve heard stories that people come up from Bermuda with empty suitcases, stay at a motel, and go home with their suitcases full,” O’Malley said.
For King of Prussia itself, mall growth has meant hassle – traffic, traffic and more traffic – but that has come with one really big bonus.
Because of commercial tax collections, Upper Merion residents pay no income tax and have one of the lowest real estate levies in the region.
“It’s fantastic,” Barbara Scintilla said. “When I hear about the taxes other people pay – oh, my God.”

Can you think of the progress Philadelphia could make with an avenue of that high end retail? Oooh, world class transportation system!

Image courtesy.