Controversial retirement program likely to dominate Philadelphia Council's agenda

INQUIRER STAFF WRITER

City Council members return to work Thursday after their summer break, and the issue likely to dominate the agenda this session is Philadelphia's controversial DROP retirement program.

As he promised in August, Mayor Nutter will give a draft bill to Council Thursday calling on the city's legislators to abolish the program because it has cost the city $258 million in the last 10 years.

That number is the conclusion of a Boston College report that Nutter commissioned, and Council has hired an actuarial firm to review the report, one of many reasons the DROP debate will move slowly.

DROP, or Deferred Retirement Option Program, allows city employees to leave their jobs with large lump-sum checks. It has outraged voters, even though there is disagreement about whether it is costly or not.

But DROP will not be an easy call for Council members, eager to prove their worth to voters before next year's Council elections.

Seven members have enrolled in DROP, potentially making them look like hypocrites if they repeal it. And the city's unions, often a base of voter support, have vowed to fight to keep DROP, arguing that the law protects their pension benefits.

At a conference on cities and debt in New York on Wednesday, Nutter vowed to fight.

"I represent another union, the citizens of Philadelphia," he said.

The mayor will have to tread carefully on DROP, said Councilman Frank DiCicco, who is enrolled in the program but has said he thinks it should be eliminated.

"He's had problems getting things from Council in the past couple of years. This DROP issue could be a deal-breaker for him," because some Council members probably will want to keep it, DiCicco said.

Council Majority Leader Marian Tasco, who also is enrolled in DROP, said members wanted time to evaluate. She has agreed, though, to introduce Nutter's legislation.

"We don't have any preconceived notion of what we're going to do," Tasco said. "I don't have a sense of the timing. It's not going to be immediately. Our consultant hasn't had an opportunity to review the study."

DROP will be one in a smorgasbord of bills and issues Council will consider this fall.

Many of those proposals, including abolishing the Sheriff's Office and overhauling Philadelphia's business-tax structure, are left over from last spring.

DiCicco and Councilman Bill Green in June cosponsored legislation that would eliminate the Sheriff's Office because they think it is too costly. That discussion will include hearings on whether to privatize the city's bail-collection system, which is widely acknowledged as having failed to collect an estimated $1 billion while leaving prisoners on the streets.

"We'll be looking at why we are one of the few cities in the country that has not privatized bail collection," DiCicco said.

Green and Councilwoman Maria Quiñones-Sánchez will try to get legislation that would overhaul the city's business taxes passed this session. Their proposals would phase out the net-income portion of taxes businesses pay but also increase the gross receipts tax. The bill would exclude the first $100,000 of a firm's receipts from the business-privilege tax.

"This helps Philadelphia businesses, keeps more money in the Philadelphia economy, and should lead to increased economic activity and growth in the city," Green said.

Rob Wonderling, president of the Greater Philadelphia Chamber of Commerce, said his group's members were evaluating how the proposed changes would affect them. The chamber also would like to see further reductions in the wage tax, he said.

Council Majority Whip Darrell L. Clarke said only expanding the tax base by encouraging business and property development would lead to lower taxes and eliminate the city's seemingly perpetual budget crisis.

He estimated that 40 percent of land in the city did not produce revenue because it was vacant or parkland. He wants to decrease the number of vacancies.

Clarke is sponsoring a seminar Monday at Temple University to talk about ways to improve the business climate in the city.

He also expects to hold hearings, probably in October, to get an early sense of how next year's budget is shaping up.

Last year, Council raised property taxes 9.9 percent to close a $150 million budget hole.

"I'd like to see people less focused on increasing taxes and fees," Clarke said.

Councilman Jim Kenney is promoting legislation that would put towing companies - which have made headlines for fighting violently over which one gets to haul a car away from an accident - under the rule of the Philadelphia Parking Authority. But Councilman Frank Rizzo is calling for hearings to find ways to improve the current towing program, which is supposed to minimize disputes by using a rotation list.

Councilman Bill Greenlee will introduce legislation aimed at making it harder for thieves to steal people's property deeds.

Councilman Wilson Goode Jr. plans to introduce legislation that would require banks that want the city's payroll deposit business to submit a fair-lending plan.

"The account should not be one that should be able to inherited," Goode said.