Council President Verna and members of City Council, on behalf of the 13,000 members of the Philadelphia Bar Association I offer my thanks and appreciation for this opportunity to once again testify on tax matters. I am here today because I am concerned about legislation which may prevent law firms and other partnerships in Philadelphia from qualifying for net profits tax exemptions under the Keystone Opportunity Improvement Zone (KOIZ) program. We believe that such a move applied to law firms retroactively would be illegal and unconstitutional. Just as important, however, this sort of targeted action against the leading segment of the local economy’s service sector would be capricious and counterproductive.

As I explained during my recent testimony on tax reform, the legal services sector is a regional economic powerhouse. The jobs that Philadelphia’s law firms bring to the city are well-paying jobs. The ancillary businesses that these law firms support are good businesses. And center city Philadelphia as it exists today would be totally unrecognizable without Philadelphia’s law firms. Without these firms, whole parts of the downtown area would be deserted, blighted and barren. When you consider that the 23 largest Philadelphia law firms employ nearly 10,000 people and you realize that these law firms are but a third of the entire legal community, you can see that it is very hard for me to exaggerate the importance of the legal services sector to the region’s economy. Indeed, if all of Philadelphia’s law firms were part of one company, they would constitute one of the biggest corporations in the region.

We urge your opposition to legislation and/or amendments which would economically scapegoat lawyers and law firms. At the same time, we stand ready to assist the city and all other appropriate governmental agencies in the development of equitable tax policies.

As I have said before, the road to tax reform must be fair, sustained and evenhanded. Reform cannot be accomplished by searching for convenient scapegoats or attempting to pit one group against another. Philadelphia’s law firms are part of the city and its economy. Our professional family is committed to Philadelphia. We want to see the city grow and prosper. We seek tax equity and reasonable reform and trust that our legislators will move in a prudent, fair and balanced manner, avoiding the type of arbitrary and discriminatory tax policies which have recently been suggested.