Does Philadelphia really financially support the whole state?

Submitted by drxdrg08 t3_10nryco in Pennsylvania

> You are spot on with the democratic party having more power at a state level too. However I would point out that Pennsylvania is floated financially by Philly. If Philly were able to remove itself from the state you would see very quickly everything in Philly would get better. Those hick towns wouldn't be able to do anything without all the sales tax philly sends to Harrisburg. Philly would immediately get a 6% tax on every sales transaction that it would be able to keep. Philly would change overnight not having to pay for the entire state. I know you hear the opposite in PA but I just wish Philly would publicly say they are going to secede to Delaware or become their own state and watch how quickly the republicans in PA would lose their sh!t trying to stop them from going.

https://www.reddit.com/r/philadelphia/comments/zgk4pn/why_do_people_hate_on_our_city_so_much/izixkju/

This idea seems to permeate not only r/Philadelphia, but also r/Pennsylvania. Just yesterday a user posted this...

> Any time is a good time to share the facts. Most states are heavily supported financially by one big city. Pennsylvania is no exception.

https://www.reddit.com/r/Pennsylvania/comments/10m44ut/snap_enrollment_as_percentage_of_the_county/j61iv80/

What is this idea based on? What data?

0

Comments

You must log in or register to comment.

Little_Noodles t1_j6an99r wrote

This one is a little tricky - finding out which counties contribute more tax dollars than they deliver to the state is public information. There are actual figures that state which counties contribute more than they take and which don't.

By and large, the most rural and reddest counties receive more in aid than they deliver in taxes, and are generally surrounded by other similar counties that do the same. Not a hard and fast all counties thing, as there are red counties bordering cities that don't do the same, but that's the trend.

Philadelphia also receives more in aid than it contributes in taxes. But it is surrounded by layers of counties that contribute more than they take. Pittsburgh's county makes more than it takes, and is, not coincidentally, also surrounded by counties that do the same, though it's effect is much shallower.

Philadelphia is a poor county that requires more aid than it generates for itself (though the qualifier re: SEPTA, which serves the surrounding counties as well, is worth noting).

But a map of "makers vs. takers" shows a geographically tiny county that's generating a lot of wealth for people that commute into it (the money coming out of Montgomery, Bucks, etc. isn't due to their status as major centers of commerce - they're where the well-off people that work in Philadelphia, or work in industries reliant on Philadelphia live), and those people are creating counties that deliver more than they take.

40

drxdrg08 OP t1_j6apenh wrote

> This one is a little tricky - finding out which counties contribute more tax dollars than they deliver to the state is public information.

It's not just the state contributing. It's federal tax money also.

The city of Philadelphia barely pays any federal taxes, but is clearly a recipient of billions of dollars of federal aid through gigantic programs like HUD, Medicaid and SNAP.

The totality of aid received from the state and federal FAR outstrips what is collected in taxes.

But yet, many people think Philadelphia supports "those hick towns". All data shows that the city is effectively bankrupt if not for huge inflows of money from other places.

4

Little_Noodles t1_j6apmxt wrote

That’s not entirely an unfair read, though. Without Philadelphia, the wealthy commuter counties surrounding Philadelphia would also be “hick towns”

19

drxdrg08 OP t1_j6aq5iw wrote

> Without Philadelphia, the wealthy commuter counties surrounding Philadelphia would also be “hick towns”

I think this thread might be about you. Stating something that is clearly delusional.

−24

Little_Noodles t1_j6ar2fd wrote

Ok. Where is their money coming from then? Is it just a coincidence that a massive percentage of Philly’s workforce is commuting from neighboring counties? Or that so many of the companies managing and flipping Philadelphia properties have LLCs registered in neighboring counties? Or that those counties are full of doctors and lawyers that graduated out of Philadelphia’s school systems?

Where do you think the Toll Brothers, one of the city’s biggest developers are located? You think they’d be in the top five developers in the country and in the Fortune 500 without Philly? They are ALL UP in the city’s shit, and they live and incorporate everywhere but here.

12

drxdrg08 OP t1_j6at4me wrote

> Is it just a coincidence that a massive percentage of Philly’s workforce is commuting from neighboring counties?

That's just not true. Factually not true.

When you subtract the people commuting outside of Philadelphia for jobs from people commuting into Philadelphia for job, the total number of workers is quite small compared the total workforce in the region.

So the idea that surrounding counties have no self sustaining economies of their own is absurd.

−12

Little_Noodles t1_j6b087r wrote

As of 2019 (the most recent public data), 47 percent of all jobs in the city are held by people from outside the county. That’s factually true, and it’s a massive percentage. There are a lot of reverse commuters, but it’s 40 percent, which is fewer.

And a lot of that is little money. I reverse commute to Delaware, and my income isn’t moving anyone’s needle.

When it comes to the great big engines of commerce in the city, where huge amounts of money is being made, particularly in property development, the developers are building in the city from offices in the suburbs, using labor that lives in the suburbs (affiliated with unions in the city), whose contracts are negotiated by lawyers from the suburbs (who went to UPenn).

Philly’s biggest law firms are full of lawyers from the burbs. Its massive medical complexes are staffed by doctors that went to school here and work here, but live juuust over the border.

10

drxdrg08 OP t1_j6b1g3e wrote

You are having a separate conversation with yourself.

The matter of the fact is that residents in the city of Philadelphia receive far more in benefits from the state and the feds than they ever create with their own labor.

To put it even more simply, to maintain the current level of poverty that the city is in, it needs many billions of dollars from people that live somewhere else. The city does not support anyone else. It can't even pay its own bills.

The data clearly supports it.

The city receives $1.3 billion/year in SNAP benefits alone.

−7

Little_Noodles t1_j6b1lip wrote

The richest person in the state is the guy behind the Philadelphia-based Susquehanna International Group.

Ya wanna guess where he lives? Cause I can tell you where he doesn’t! And where do you think his highest paid staff live?

The wealth of Philly’s suburbs is, in large part, extracted from the city. Philly provides those counties with low wage labor that they don’t have to subsidize but Philly does (60% of Philly’s reverse commuters make $40,000 or less annually), educates and provides jobs for their their professional classes, and provides a commercial center that generates wealth for those counties’ richest residents.

The CEO of Aramark, one of the city’s biggest employers? A company whose HQ is in Philly and makes 14.6 billion annually? Chester county. Where do you think his top execs live? I only bothered looking up the CFO and one other - but it’s not Philly! They’re all in wealthy PA suburbs

10

drxdrg08 OP t1_j6b5nxz wrote

> The CEO of Aramark, one of the city’s biggest employers? A company whose HQ is in Philly and makes 14.6 billion annually?

Everything you say is nonsense. It's just made up.

But let's pick just one thing. Can you prove the 14.6 billion figure?

−4

Little_Noodles t1_j6b688y wrote

Huh, I did make a mistake. I didn’t see their most recent annual report, which has upped the figure to 16.3 billion in revenue.

I also just looked for info on their senior Vice President. She lives in the “greater Philadelphia area” (aka the PA suburbs in counties outside Philly).

11

drxdrg08 OP t1_j6b7lv0 wrote

> Huh, I did make a mistake. I didn’t see their most recent annual report, which has upped the figure to 16.3 billion in revenue.

Do you know the difference between revenue and profit?

Aramark made $194M in profit in 2022, lost -$91M in 2021, lost -$462M in 2020.

So in the last 3 years they made no profits, but lost -$359M.

You said they make $14.6B in profit. So clearly you have no clue about finances whatsoever. Even the basics.

And this is precisely how a lot of people think Philadelphia supports the whole state.

0

Little_Noodles t1_j6b99ds wrote

At no point was I talking about net profits. Just revenue (which is why I said words like “revenue”). Like a lot of businesses, the past couple years have been a mess. I dunno if you noticed, but some shit was going down in 2020 and 2021 in Aramark's industry. But they’re a multi-billion dollar global corporation that makes money, and lots of it, more often than it doesn’t.

If you want to go lecture their lawyers and financial team about their “basics”, I can tell you where to find them (hint, drive outside the city limits and start knocking on the doors of mansions).

Now, if you want to argue that last years earnings mean that John Zillmer doesn’t deserve to be taking $1,118,750 from the city back home to Chester County in base salary, plus bonuses, stock options, and other benefits, we can agree on that.

12

drxdrg08 OP t1_j6ba1bo wrote

> At no point was I talking about net profits. Just revenue.

Please stop embarrassing yourself any further.

> The CEO of Aramark, one of the city’s biggest employers? A company whose HQ is in Philly and makes 14.6 billion annually?

You were literally talking about profits. You were talking how Aramark, a national company, somehow extracts billions of profits from Philadelphia.

Have a good say sir. This conversation where you just make things up is clearly unproductive. You can keep thinking Philadelphia supports the whole state. Maybe even the whole country.

0

Little_Noodles t1_j6bb46j wrote

When someone asks you how much you “make” do you subtract expenses first and only state your year end profit? Or are you hung up on “revenue”, which is the word for what that figure represents?

And top level staff absolutely does make their money in Philly and take it somewhere else, regardless of their company’s revenue or net profit year to year, and that is where it gets taxed for the purposes of this discussion (this process of taking something from somewhere where it is created and moving it somewhere else is also known as extraction).

Again - the richest guy in the whole state has his HQ out of Philly, but is not living here. He lives in Montgomery County. Philly’s biggest companies are almost all headed by executives making millions of dollars, but who live over the border, and the same can be said of their second tier staff. Dude that owns the Philadelphia Eagles (personal net worth in the $3-$4 billion range)? Montgomery County. The billionaire that owns most of the Phillies? Bryn Mawr.

In 2019, seven of the city’s biggest corporations (which includes Aramark) spent $2 billion across 19 categories of locally deliverable goods and services (construction, IT, security/public safety, pest control services, courier services, catering, architecture/design, lab supplies, facilities management, communications/public relations, business advisory consulting, special event planning, lobbying, accounting, personal protective equipment, legal services, and insurance.). Only 22.5% of that money was spent within the city.

Lots of money is made in Philadelphia - but a ton of it gets funneled directly out to the suburbs.

11

boomerinvest t1_j6ctor6 wrote

However, the people living in Philly commuting outside Philly to work and the burbs folks coming into Philly to work all pay city wage tax. Although residents pay a higher tax. Philly mismanages revenue like crazy. Cigarette tax, beverage tax, wage tax, sales tax, gas tax, property tax, utility revenue. The list goes on.

2

Numerous-Two-7550 t1_j6knxk0 wrote

R’s have controlled the state and governorship for 30 of the last 40 years, your first point is patently wrong and screams misinformation with how wrong it is.

3

PhillyAccount t1_j6am5cq wrote

If you're talking about the greater phila metro area maybe. City alone, no. That being said guy sounds like a dbag.

25

the_hoagie t1_j6blxqb wrote

Generally when people say Philly is the economic powerhouse of the state, it's referring to the metropolitan area, which extends beyond the county. The speakers in those links are nonsense, as the suburbs and main line are as reliant on Philly as it is on their resources and capital.

That said, OP, you seem to have a chip on your shoulder.

23

selimnairb t1_j6dry62 wrote

Well if they’re from Philly, they by definition have a chip on their shoulder (saying this as someone who grew up a yinzer and loves Philly and its denizens).

9

Haunting_Berry7971 t1_j6aiyja wrote

Not good data. At the end of the day everyday working people are who make this state & country run. It doesn’t matter if you live in the city, a suburb, or a rural area.

If anybody is the moocher it’s the big businesses & bosses who lobby for tax loopholes & subsidies & don’t do a lick of work but get most of the money

21

msip313 t1_j6bhoku wrote

I hear you. But numbers don’t lie either. Something like 60+% of PA’s tax base comes from the 5 counties that make up SE PA. We’ve got 67 counties.

11

Haunting_Berry7971 t1_j6bkeum wrote

people with a lot of money don’t necessarily deserve it. That says more about where wealth is concentrated in this state than it does about who supports who in this state.

−3

derkadoodle t1_j6bos83 wrote

Doesn’t it stand to reason that if they’re generating the most tax revenue they’re also the ones supporting most of the state?

5

Haunting_Berry7971 t1_j6dbn28 wrote

No, because that’s assuming taxable income directly relates to how much you help PA keep going. You can make only a little money but have a big impact on other people.

0

msip313 t1_j6bws40 wrote

Not sure what you’re trying to say. There’s plenty of poor and working class to go around in SE PA.

4

Haunting_Berry7971 t1_j6dbd8b wrote

Yes. But there are also really really rich people in SE PA, which is gonna affect the tax base of those counties

1

Kabloosh75 t1_j6jzfb4 wrote

This guy gets it. There is way too much corporate welfare in this country.

2

moonwish22 t1_j6am57f wrote

“…Philly would publicly say they are going to secede to Delaware or become their own state…”

That’s hilarious. Just sounds like a lot of egos with little data to back their opinions up. I’d take that whole conversation with a grain of salt.

19

drxdrg08 OP t1_j6ao8a2 wrote

It's not just one conversation. It's a recurring idea that gets repeated by many people and repeated often. Mass delusion?

−4

tsctbulldog t1_j6akbqt wrote

Philly's working population constitutes only 12% of total PA work force according to census data. Just some rough math, if ever person in pa from age 18 to 65 earned the median income and at current state tax rate, philly resident's would generate $1,975,154,125 in state income tax, the rest of pa would generate $16,257,815,900.

17

drxdrg08 OP t1_j6amfp0 wrote

> philly resident's would generate $1,975,154,125 in state income tax

But do they? Let's do some rough math. And this is fairly easy since both the city wage tax and the state income taxes are not progressive with virtually no exemptions.

> The wage tax accounts for 45% of Philadelphia’s annual revenue, and is expected to decline by about $78 million this fiscal year — despite an increase in the nonresident rate. While it’s difficult to determine how much of that loss is due to furloughs and layoffs as opposed to remote work, the city typically collects 40% of its roughly $1.5 billion in annual wage taxes from nonresidents.

https://www.inquirer.com/business/philadelphia-wage-business-tax-coronavirus-remote-work-20210124.html

Total income wage tax collected is "roughly" $1.5B, 60% of which is from city residents, so $0.9B. The resident wage tax was 3.8398%, meaning city residents had $23.4B of earned wages. If the tax rate in PA is 3.07%, then they paid $720M in state income taxes.

$720M vs. $1.98B

That's almost 3 times less. How could they support the state?

−5

CleverName550 t1_j6amqv8 wrote

The little Southeast corner of Pennsylvania supports the whole state. It's where the money and people are. That includes: Chester County, Delaware County, Montgomery County, Bucks County, and Philadelphia County. 4 out of 5 of those counties are the top 4 richest in Pennsylvania out of all 67 countries. Philadelphia County actually places 45th out of 67.

https://vista.today/2022/06/chester-county-wealthiest-counties/

https://www.lehighvalleylive.com/news/2018/07/ranking_the_35_most_affluent_p.html

https://www.abc27.com/pennsylvania/highest-earning-counties-in-pennsylvania/

11

drxdrg08 OP t1_j6aomyz wrote

In the context of the original quoted comment, none of those counties would form any kind of economic or governmental union with the city of Philadelphia.

2

stuckonsometrain t1_j6aqbt3 wrote

Who doesn't consider those counties part of the Philadelphia area?

12

drxdrg08 OP t1_j6ark9k wrote

> Who doesn't consider those counties part of the Philadelphia area?

Again, the conversation is clearly about the city of Philadelphia itself.

> If Philly were able to remove itself from the state you would see very quickly everything in Philly would get better. Those hick towns wouldn't be able to do anything without all the sales tax philly sends to Harrisburg.

This idea presumes that the neighboring counties would send all their taxes to the the city of Philadelphia, instead of the whole state, thus Philadelphia would make out like a bandit.

I imagine if this ever was up for a public vote, the only people that would vote for it would live inside Philadelphia.

−2

stuckonsometrain t1_j6auhxe wrote

I would imagine most of the people in the surrounding counties - especially Delco and Monco would identify closer to the city than the rural part of the state.

In your defense though I am unaware of the particulars of this hypothetical referendum you have created in your mind.

9

CleverName550 t1_j6aqndc wrote

They are the surrounding counties of Philadelphia and make up the Philadelphia area. They technically are separate counties but none of this would ever happen anyway. There is a lot of business revenue in Philly but per capita the people are poor. Culturally there is more in common with SE PA, South Jersey and Northern Delaware than the rest of the state of PA. Many of us in the Philly area own second homes in New Jersey on the shoreline. To be honest, I've lived in PA my entire life but I never leave the NYC-Philly-DC Northeast Corridor. I never travel West or Northwest. I graduated from Temple and Penn. I have no connection to the rest of the state. It might as well be Ohio. But I want to visit Harrisburg one day.

Either way, that guy was being a douche and being dismissive toward the rest of the state's contributors. I suppose he has a mindset that is common among a lot of folks down here in our little corner that looks at the rest of PA outside Allegheny and Erie County derisively as Pennsyltucky. That's not the way to talk to your fellow Pennsylvanians and it breeds contempt. Don't sweat him.

7

drxdrg08 OP t1_j6atlw1 wrote

> Either way, that guy was being a douche and being dismissive toward the rest of the state's contributors.

If he was right, that Philadelphia does support the state, he would be a douche and dismissive.

But he's wrong. And not a little wrong.

The city of Philadelphia is not self sustaining, but requires many billions of dollars of outside support just to maintain current status quo.

4

mcvoid1 t1_j6b0zcg wrote

I know that nationwide it's the case that cities financially support the rural areas. Welfare, food stamps, medicaid, all used by substantially larger percentage of the population in rural areas than in cities. And something like 40% of all farm income is from farm subsidies financed by taxes which are primarily paid by people in cities.

I don't know how that translates to the state level, but I don't see any significant reason why it wouldn't be the case there.

6

drxdrg08 OP t1_j6b96fn wrote

> I know that nationwide it's the case that cities financially support the rural areas. Welfare, food stamps, medicaid, all used by substantially larger percentage of the population in rural areas than in cities.

This is a myth. Not based on data.

Philadelphia has 12% of the population of the state, but 21% of all HUD funded housing is in Philadelphia. The ratios are the same for other benefits that you listed, since qualification for them would be similar as housing subsidies.

1

mcvoid1 t1_j6eg6ep wrote

Your use of political boundaries is confusing the issue and masking what's really going on. The middle class supports the poor. (Technically the rich do too, but there's not many of them to make the bulk of contributions and also the burden they experience by their support is so dramatically smaller than the middle class as to be practically negligible, and they have many, many ways to avoid contributing and holding onto most of their money)

The political entity of Philly makes tons of money in its boundaries, but all that money goes to the people working in Philly. But those people making tons of money in Philly largely don't live there. They live in the surrounding area and commute to Philly to work. That means the city residents themselves are largely poor and need assistance. But by taking the jobs of cleaning, construction, services and so on, they're supporting the people who are making the money that's supporting both them and the parts of the state out in the mountains, outside the metropolitan area. So the Philly metro area sustains both itself and the outside parts that don't contribute in return.

Contrast this with San Antonio, where it's a very large city, takes up almost all of Bexar county, but once you go outside, it's mainly desert and a few scattered towns, mostly along interstates. They don't really have a metropolitan area. That's a city where a lot of the people making money live in the city itself, along with the poorer residents. So in that case the city is kind of a self-sustaining bubble.

A city like New York is a mix of both, with many middle-class people living in the city along with the poor people, but also a huge commuter population as well. New York is just huge, though, so it in a lot of ways plays by its own rules and has unique challenges.

Now let's look at a place like Potter County, PA. There's not a lot of business there. Or people. Or agriculture. No industry, few roads. Few reasons to travel through there and practically no reason to do business there or to stay. There's not really a way to make a living. As a result they're dependent on outside funding, but they also don't make a significant contribution back to the urban areas. They could drop off the face of the earth, the the people working in the cities would only notice that their taxes would go down slightly. In effect, the amount of money being taken out of Potter country to support Philly residents is practically zero. And when you factor in the money being taken out of the Philly metro to support Potter county, the amount is very deep in the negative.

3

tmaenadw t1_j6fc4d9 wrote

Not a myth in WA state where I moved from. The Seattle area generates more state revenue than it receives, and the rural areas in the state, most everything east of the Cascade mountains, get more from the state than they pay out. Which is why the western half of the state always laughs when eastern WA talks about forming its own state.

2

jambrose1996 t1_j6beiff wrote

The fact that you call them hick towns alone tells me a lot about your personality. You probably view much of the Midwest as flyover states because many of them don't fit an agenda...

5

boneman1982 t1_j6l91lp wrote

So what would you call small towns with little economic activity, likely little to no entertainment activities and forty minutes or more to the nearest decent sized city.

I grew up in a hick town most famous for young women disappearing and people dying of overdoses. Almost everyone with any real ambition left. If you don't have an in with the papermill or the truck factory you're gonna be stuck driving an hour to find a decent job.

Family can definitely make living in such a town much more tolerable, but absent that I'd vastly rather live in/near Pittsburgh or Philly, etc. With the current war on education by many people in such towns I'd never move my kids to such an area unless I could afford private school or homeschool.

−1

jambrose1996 t1_j6lidox wrote

You do realize the term 'hick town' is pejorative, right? You're basically digging your own hole...

2

Responsible-Type-392 t1_j6eg1gx wrote

Does it really matter? Philadelphia would not be able to sustain itself without the raw materials the rest of the state provides. Water. Construction materials. Food. Philadelphia is not even remotely self sufficient in any of them.

This conversation reminds me of New Yorkers pretending they dont need upstate New York yet they built one of the most extensive aqueducts into upstate to harvest their water. Without it the city would literally shrivel and die.

4

One_Rope2511 t1_j6kyho0 wrote

Hey, what about that other city on the other side of the state?!?! Don’t forget the Steel City.

3

Impressive_Friend740 t1_j6aktne wrote

They’re an idiot have they ever been to bucks county or the main line.

2

RoyalEagle0408 t1_j6altq0 wrote

My guess is it’s more the Philly metro area than just the city.

14

SamShephardsMustache t1_j6am07a wrote

Main Line is associated with Philly

10

Impressive_Friend740 t1_j6ambz8 wrote

I don’t consider the main line Philly. I’ve lived at 7th n south 9th n pine 15th and locust 12th n spruce and the new (back then) condos beyond the gateway towers in south Philly. I grew up in bucks back here now. Main line isn’t Philly for me as a person who actually has lived all over.

−12

drxdrg08 OP t1_j6apx2n wrote

> I don’t consider the main line Philly.

Nobody does. They are separate cities/towns by any definition.

4

drxdrg08 OP t1_j6avt3s wrote

> In 2015, the local government bodies serving Philadelphia collected $3,004 per capita in local taxes, the fifth-highest total among the 30 cities. This figure includes taxes on income, sales, property, and businesses, on residents and nonresidents; the City of Philadelphia imposes a broader range of taxes than most other municipalities. The local governments serving Philadelphia received $6,303 per capita in revenue from all sources, including state and federal aid

https://www.pewtrusts.org/en/research-and-analysis/reports/2019/03/20/the-cost-of-local-government-in-philadelphia

This is clear evidence the city can't sustain itself, by a wide margin, let alone support anyone else.

Federal and state tax collections from the city do not even approach to cover the $3,299 per capita subsidy that the city receives.

2

selimnairb t1_j6ds8v2 wrote

The problem with statements like this is that they ignore the interdependence we all share. No big city is self-sufficient in energy, food, water, or building materials.

2

SwaggyCheeseDog t1_j6dnijv wrote

It’s kinda obvious that when there are more people, the place that has more people are going to contribute more tax dollars. You’re making it seem like you pay so much extra in taxes just because you live in a city. Which could be true because jobs in the city tend to pay more money.

1

Poconosmax t1_j6iangj wrote

I would sell center city to Camden for a dollar...

0