>> i'm monica malpass. philadelphia's mayor proposes raising property taxes 6%, and the shock waves are immediate. let's get the inside story. ♪ good morning. welcome to "inside story." i'm monica malpass. and let's meet our insiders this week. they are ajay raju, attorney. o have you again, sir. ed turzanski, foreign policy analyst. always nice to see you, ed. david dix, governmental affairs. good morning to you, sir. thank you for joining us. and we welcome a new panelist, liz preate havey. she's an attorney and gop party chair, and welcome. we're so glad to have you as well, liz. >> thanks for having me. >> absolutely. let's talk about mayor kenney's proposal. literally, city council had an immediate reaction. so did pretty much everybody who was listening in a good way or a bad. but his idea was raise taxes -- possibly property taxes -- 6% to dig out the $1 billion school deficit that the school remains

in -- school system. and, so, of course, that's important for our childrenhos, t everybody else said, "wait a minute." what was your immediate reaction? >> seems like another tax on the poor. i mean, we live in the largest poorest big city in america, and to levy a tax on real estate on an already, you know, squeezed population on taxes, i think it was the wrong move. i heard a lot of members of council kind of speaking out really fervently against it as soon as the budget address was over. and, you know, given the fact that we've now had a cigarette tax, a soda tax, and now a real estate tax all coupled with avi not just a couple years ago, i think it's really burdensome on the poor people. >> it'll be the fifth property tax increase in nine years if it passes, so what was your reaction, ajay? >> well, i mean, it's not just the realty tax. you also have the realty transfer tax will go up to 4.35%. already the highest in the country will go up to 4.35. the reduction of the wage taxes will be slowed down. th or so million in the next five years.

look, if you're going to make a commitment to fix schools and it requires money, then you have somewhere. and if the somewhere is not just the poor but the real estate owners, but also 75% of it are the businesses and corporation that pay taxes. the problem with all of that is that i understand we have to pay the bill. we're not collecting delinquent taxes right now from folks. so this is a separate tax by the corporations and the poor folks who are actually paying, but what about those who are not currently paying? what about making government more efficient? net-net, this government is supposed to grow by 4% to 5%. i think we need to tighten the belt, starting with the government first, find efficiency, find job-creating policies that attract folks into the city. >> and that's a longer-range fix, so the school superintendent says... >> we've been talking about for the past 20 years, long range can be now so that we start having immediate impact soon. >> because, to their credit, the schools say they've cut everything they can possibly cut.

next time they're gonna have to cut, it's gonna be into the bone, right? it's going to impact the 202,000 students in a negative way more so than it even has. liz, where are you at on this? >> well, i don't believe that. i think that until you have meaningful reform and you seek efficiencies, you look at the sort of -- the schools are put into silos. this union here, this union here, this union here. people don't work together. until you actually do that and you look and start kind of from scratch and put the kids first, i don't think any taxes, any more money that they throw at the schools are really gonna fix the problem. the schools are gonna have all the same inherent problems that they have now. >> and the likelihood this is going anywhere -- i mean, darrell clarke says this is aggressive. it will hurt the poor, as david mentioned. >> yes, i think aggressive is code language for "we're not interested." and it may happen in some form -- i think ajay's right about the non-collection of taxes. allan domb, city councilman, has been very outspoken on that point. it's much more likely that they

will try to do something about the 10 year tax abatement rather than punish not just the -- the poor, but the elderly -- people who are on fixed incomes, who are homeowners, who have paid time and time again. but back to the point about the schools, it's frustrating that, in every other walk of life, we look for innovation. we're gonna change the model.'ry to do things. and in all of that, choice is embedded within the disruption, within the implementation of new technologies, except for education. >> we're not seeing enough disruption there? >> no! it's the same system. you do the same thing over and over again. after awhile, you're providing a new illustration of einstein's definition of insanity. you do the same thing over and over again... >> with the same outcome. >> ...thinking you're gonna get a different outcome and you don't. >> but disruption has kind of

been the norm with the philadelphia school district. we had an elected school board, now for 17 years we had an src. now we're saying we're gonna scrap the src and go back to... >> so, that's a change. >> that's a governance issue. that's not a choice issue. >> that's a governance issue, but that volatility has not allowed for the type of stability that a school district the size of philadelphia needs. >> can we make a long-term, macro point? we tout this region for eds and meds, and arts and culture. things that were built around 200 years ago -- not of our doing. most of it, when it look at eds and meds, they're really an export business. people that graduate from wharton, the best and the brightest, leave. they don't really come here. that's the cuban cigar. the rest of us are cuba. we're still driving the 1950s car. that's west philly, that's north philly, et cetera. the reason why we're still the same cuba and the cuban cigar is the export is because we have the same policy again and again. every four years, we have amnesia and we get sold a promise, and then four years later we forget. four years later, another new promise, and we just keep kicking the can down the road. so you have to have a long-term

policy discussion about how do we become more attractive? by being the most taxed city is not the most attractive way to attract companies. to let the greatest talent coming out of wharton and jefferson and penn medicine... >> rain drain, right? >> ...leave is not the way to go. we are, right now, just reshuffling the decks on the titanic. that's not the policy that we ought to be following. >> and by the way, amazon looking at cities, where they're gonna put their headquarters, if they hear this budget address and they hear that litany of taxes, they have to wonder what's gonna happen. >> i do applaud mayor kenney for taking on the big -- big problem and saying, "put it on my back. i'll be held accountable." that part i actually admire. >> and taking it away from all of the citizens of the rest of pennsylvania who have been griping that their tax dollars are going, you know, from scranton and out west are going to pay for the philadelphia schools. people -- those state representatives and state senators have heard people complain for years about that.

>> that it's just a bottomless pit, in their opinion. >> exactly. so i applaud the mayor for taking this on. >> yeah, absolutely. >> i'm kind of surprised that a mayor that's been so politically adept throughout his years as mayor and on council didn't count to nine on this. to have a budget address that was so drastic and not have gotten the support on council or even among the city controller was a little... >> but we knew this was going to happen, because the moment we said we're gonna put full control of the schools back in the hands of a locally ad-- provided school board, you had to pay the bill. >> yeah. >> so this is the tyranny of mathematics that's coming in. and the question is can you grow your way? can you grow the economy so that you get more revenue, or do you keep on taxing what you have left? and the taxation of what is left over means you're gonna have less and less of it because smart people do not go in places where they're gonna be dinged with taxes every couple years.

>> well, unfortunately, poor people don't have the leverage to up and leave. they're stuck with this burdensome tax bill, and i think that's something that we have to keep in mind as the largest poor city in america. >> speaking of taxes, the soda tax has no produced exactly what was projected. i mean, it's close -- 85% of what was the first projected revenues coming into the budget, but 1.7% is what it's providing to the $47 billion budget -- or $4.7 billion. and so they have lowered their expectations for next year, meaning fewer seats in pre-k, not the universal pre-k that had been hoped. fewer new schools, that kind of thing. so that's another ding, if you will, because if one area's not bringing in the revenue you hoped, gonna have to make it up there again. >> and i think it's an efficiency thing, to ajay's earlier point. we can't put a burden like this on poor people unless we're doing everything we can to modernize our efficiencies as a city. when we have a boondoggle $50 million on what was to be the police center, and now we've said, "oh, no, we're gonna move it to the philadelphia inquirer

building." that's $50 million of taxpayers' dollars that are unaccounted for that aren't added to the school district or somewhere else that can really use that money. >> what about was the soda tax worth the fight? i believe the fight's still ongoing with the beverage industry. >> i don't think the soda tax has been worth the fight, and i think it's regressive tax. i think it does disproportionately affect the poor. i also feel there's a negative effect, which is about 1,200 jobs have been lost in philadelphia. and these jobs are in supermarkets and places where, you know, the poor needed those jobs. >> food deserts. >> exactly. >> talk about food deserts. and if you know that somebody in the supermarket business is operating on a 1.5% to 2% margin, and then you hit them -- and it's not a soda tax. it is a beverage tax. it is wide-ranging. >> ice tea, juice. >> and if you have the misfortune of having a store close to the city border, you have seen your customers migrate across the border because that 99-cent bottle of soda that winds up costing $3 is a budget buster. >> it adds up. >> that's for sure.

>> all right, speaking of the schools, we do have the new school board coming into play. 27 people have been given by the nominating panel to the mayor to review, and he gets to pick the last down to nine in the end. they will be starting in the springtime. any sort of notations that you want to see going forward? anybody on there that concerns you? anybody you like? >> well, i think every constituency should be represented. and i know that the mayor is not a fan of charter schools, but 30% of the students in philadelphia are in charter schools, so i think it behooves him to make sure that there are people on that board that represent the charter schools and the charter school interests. i'm not sure that's gonna happen, but he should do it. >> they are managing a $3 billion budget with the 202,00 students. it's a huge enterprise. >> to go back to ed's earlier point about disruptive innovation in schools, when you look at mainline schools or private schools or academically gifted schools, kids go home at night, look at kahn academy, which is free -- any kid can get it, poor or rich -- they do the lectures at home, and when they come to classrooms, it's

actually homework time and they're peer learning. when you go to typical public schools, exactly the opposite, as we have been doing for the past 100 years. that means they're still using the rotary phone, not the iphone in public schools... >> right. >> ...and we're wondering why the results are different. disruptive innovation doesn't just mean you put chemo on a body killing both cancer and good cells. it's being smart about what the latest innovation is and to cure from the root of it. we need to change the way we teach period, and how we look at education as a national, not just local, issue. changing from src to local governance doesn't solve it by itself. it really has to have a complete overhaul of our mind-set of how we teach out kids. >> ajay, there are innovations going on in philadelphia. i don't know if anyone knows about belmont charter school network. it's a school started by michael karp. it's a school system. it has a catchment school. it has charter schools. but the whole gist of it is it's not just about educating kids. it's about breaking poverty, breaking poverty in the neighborhood. and the philadelphia school system should be looking at networks like that and saying,

"what is it that they are doing that is helping these children who had no hope before who are now having jobs?" >> and that includes the archdiocesan system, which has been an outstanding performer for decades in this town. continues to serve large segments of the population across all income levels. and the idea that they're not embraced as a partner, but instead treated as a competitor, it just means we wind up spending more money to get less favorable results. >> and they are not treated as partners there are roadblocks put in front of these people who are trying to do good in these poor communities. and that should stop. >> all right. philadelphia's newest district attorney, larry krasner, has decided to drop cash bail, as he promised one of his campaign planks. and that is helping some people who obviously can't pay the money to get out of jail -- for small crimes, anyway. allegations of small crimes. do you think, in the end, that this was the right move? he did say that that's gonna be one of his main ideas coming in. >> monica, it's going to depend

on what happens to quality of life in communities that are affected by crime. and we're gonna need some time just to see how all this plays out. the critics suggest, and i think with some validity, that this will not work out well. but again, he won the election. he promised to do this. >> but our jails are overcrowded. >> jails are overcrowded, and the idea that someone would sit in jail simply because they don't have money is erroneous. and anyone who has had to have the experience of being charged with a crime and sitting in jail and being in jail only for the mere fact that you cannot pay the bail would feel validated by that. >> i actually i agree with that, and let me -- look. will there be consequences? maybe for others. but cash bail criminalizes poverty. and when you are -- when you cannot pay, as david just mentioned, cash bail when i can pay but they cannot pay, there are unintended consequences from that, too. now you're away from the family.

you can't take care of the family. your job is now disrupted. when you're desperate at that moment, you double down on more desperate things. it only leads to more problems. you have to have a fair system. the presumption of innocence and due process are both things that everybody's entitled to. it's not just for the rich, but it should an even-handed system. not -- not a system that criminalizes poverty. and i agree wholeheartedly with that comment. >> and the district attorney's role is to apply justice more fairly. i think this is a step in the right direction. >> any thoughts? >> but there will be consequences for sure. >> you can't have everything perfectly all at the same moment, so do you think this is a step in the right direction, liz? >> i'm not sure. i certainly am concerned about the fact that this does hurt the poor, that they don't have the ability to pay for the bail. but i am concerned that certain people will be let out that shouldn't be let out. and that probably will happen, but we have to wait and see. >> we shall see. >> all right. we're gonna take a break. "inside story" continues right after this. stick around. >> 6abc's "inside story" is presented by temple university.

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but you still don't have fios. ok? fios is a 100% fiber-optic network, literally engineered for streaming. good advice. i've also got some ideas on a better cereal selection, which i will keep to myself. experience netflix on the 100% fiber-optic network made for streaming switch to fios and get a year of netflix on us with a two-year agreement. ♪ >> welcome back. pennsylvania congressman patrick meehan is not running for reelection in the delaware county area, but numerous people are coming in to put their names in the hat. do you think there's a front runner who's emerging? somebody that you like? >> not that i like particularly, but there has to be a front runner, the man with the most cash. rich lazer seems to have monopolized this particular

congressional district in terms of the cash. i've heard rumors of 3.5 in the independent expenditure and 1.5 in the campaign side. that dramatically outdistances him from any of the competition, particularly if there's 10, 11, 12, 14 candidates. >> and now with the more democratic leaning demographics there because of gerrymandering, changing up the map, there will be a change, don't you think? >> i agree. i mean, i think he summed up the analysis as succinctly as he could. but i agree -- the person with the money wins an election because you have more name recognition because you can spend more on adds. and it's gonna be a sprint between now and -- what is it? three months? a sprint. you can't raise more money if you already have a $4 million war chest. >> but the unfortunate thing is now that the district has been redefined, it's not a competitive district anymore, so the race now is only between democrats. and it really should be -- i think that the district was better served before when you had a real race. you may disagree, but, you know, there was a race between a republican and a democrat

before. so now it's just an internal race. it's kind of the gerrymandering or the judicial-mandering that the supreme court did has now changed that to being a plus-13, which means it's virtually unwinnable by a republican. which is unfortunate. >> i still love to see a republican get in that race. when you have a new district, you have a new opportunity to introduce yourself to the constituents. and everybody is new for this district. >> all right, let's talk about gun control. senator pat toomey had a bipartisan gun bill that he'spre some heat, even in an off-the-cuff way, from president trump. and let's listen to what the president had to say in a meeting with senator toomey. >> we didn't address it, mr. president. >> you know why? 'cause you're afraid of the nra. [ chuckles ] >> that comment came because there was a similar bit of gun legislation that was proposed in 2012 with senator toomey, and it did not pass. it did not also include raising the ability to buy guns from 18 to 21 at the time, and now they're trying for that. what did you make of it? >> yes, no good deed goes unpunished. so pat toomey tried once.

he wants to try again. and the president was playing to the cameras. he's got this tendency to be snarky off the cuff and then circle back and to say, "hey, by the way, we're fine, right? i didn't mean it or i didn't mean to imply whatever i said, clearly." listen, pat toomey sincerely tried with joe man-- >> manchin. >> manchin. he tried sincerely. they did not succeed once. he'll try again, but it was sincere and it would've been impactful in some way. the problem is, monica, we are stuck at zero-sum games where we're either going to wind up... arguing for the confiscation of not just a class of weapons but even more than people think or on the other hand we just keep on not doing anything. >> i disagree. it's not a zero-sum game. we're not -- >> it has been! >> we're not asking for the guns

to be removed and the 2nd amendment to be reversed. we're just talking about common sense gun legislation. we're not taking the cars away. people can still drive, but you still have to go get a license. you have to make sure you have insurance. and you're responsible if you kill somebody with your car. get your car inspected. some common sense gun measures. if we can't get that -- that's not a zero-sum one or the other. it's right in the middle. we need to treat guns like we treat our cars. >> and, for the record, senator toomey says he has not received money from the nra since 2010, so he's not afraid of any pushback. >> i'm sorry, you had a comeback. often the case with president trump, when he speaks off the flip, he's oftentimes very accurate, and there are any number of senators and members of congress who are deathly afraid of the nra and their impact in their districts and will not under any circumstances even with the most reasonable policies go against what the nra has asked for them to do. i mean, this issue, and i've actually been able to address this issue to president trump, this issue of gun violence should be raised to the public

and we're not just talking about when crazy people go into schools and shoot them up. we're talking about the hundreds of people who are shot dead in the streets of philadelphia every single year without really a systemic policy to address those issues. >> monica, i think that senator toomey really should be applauded here. the fact that he is doing this in a bipartisan effort with another democrat senator is something that we just have not seen in a long time. and after that remark by president trump, there was a story that was written this morning that said president trump called pat toomey to say, "i support as always looked at getting things done by saying, "if this is all we agree on, then get it done. don't throw in a whole bunch of stuff into a bill that's gonna make it fail. let's just agree on this." and i think democrats and republicans do agree with his bill. so i'm optimistic. >> i think the american public all agrees that too many people are dying at the hands of guns and that we need to do something about it. and i haven't seen congress, even in a bipartisan way, do something to the level that it needs to be addressed. >> by the way, the failures of the broward county sheriff's

office in this -- the fbi failed, broward county failed, the school failed. and instead, all of the attention is on access to guns for people who acquire them legally. you have -- to ajay's point, you have to do both. >> all right, we're gonna bring up a quick last topic. the opioid crisis, of course, is onerous throughout the country. camden county has filed a lawsuit against big pharma. we have time for one comment. what do you make of it? is this the beginning of something big? >> i think so. look, i think we all know somebody, either a family member or a neighbor or somebody you know who is suffering from opioid addiction. it is no longer just a side drug issue. grandmothers, too. all races, everybody has it. somebody's responsible. we are the most drugged country in the world. pharma companies, doctors, we're all responsible for this, and i think now, finally, we're waking up to probably the largest drug epidemic in our history. >> all right, we're gonna have inside stories of the week. take a break and be right back. stick around.

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>> 6abc's "inside story" is presented by temple university. ♪ >> time for inside stories of the week, and let's start with david. >> yeah, with congressman brady pulling the west philly walkaway and giving up his district to any number of districts through the redistricting, we have a number of candidates who are now challenging incumbents. not withstanding the 5th district where we have richard lazer we've already discussed, but in the 2nd, you now have a kevin johnson challenging dwight evans. uh, i think it's gonna be a challenge for him. dwight evans has 40 years of incumbency, whether it's the state house or now it's congressman. so, like, you really have yourself prepared before you take on a challenger like that. also, brendan boyle now has 40% more african-americans in his district, so i would expect a lot of challenges to get in that race as well. >> all right. ed? >> monica, admiral mike rodgers, the head of the national security agency, was asked by congress, "why don't we hit the russians back for all of the cyber misbehavior?"

his answer was telling. we might want to hit back, but we have to be careful about retaliation. putin would take things very hard very fast. we don't know what the net effect would be on all of our lives if the russians were to do that. >> all right. ajay? >> a postscript to david's inside story. one of the challenges to brendan boyle will be bill green, a former city council member, as well as the chair of the school reform council. a fighter, and my understanding is that i think he will be the endorsed party candidate, not the sitting incumbent, which is >> interesting. all right, liz? >> well, this week, in a lawsuit, al schmidt, who's the city commissioner in philadelphia, revealed that he found 100,000 non-us citizens on pennsylvania's vot registration rolls. that's unacceptable, and that can sway an entire election. if you look at donald trum who won by 44,000 votes, 100,000 people who were on the voterwhos

be should be taken s this governor, and i hope that he really does look at it and he eans up the rolls. >> all right. thank you for your inside stories, and thanks so much to you for watching. hope you have a great week ahead, and we'll see you right back ♪ ♪

♪ >> i loved movies. i loved movies as a kid. and i loved experience. the environment that you went into, reverently, and sat there in a great state of excitement. [ cheers and applause ] i had no idea, at the time, that this was locally invented. no clue. ♪ >> there has been filmproduction philadelphia really almost continually. but it's more than just what you see on the screen.t the artists that are involved. philadelphia is an important