Members of City Council just wrapped up a meeting where their legal counsel provided a briefing on the amendments added by the state Senate to House Bill 1828, the legislation that provides budget relief to the city.
HB 1828 grants the city permission to temporarily raise the sales tax and to defer some pension payments. The new version of the bill includes amendments that would bar elected officials from the controversial Deferred Retirement Option Plan (DROP) and would require the city to freeze the pension plan and create a lower-cost plan for all new city employees, which would have to be negotiated with municipal unions.
Union officials have slammed the plan, saying it would damage the collective bargaining process.
Six Council members attended the session, along with several staffers for other members. Afterwards, many said that speedy passage of HB1828 was best for the city.
"We are frankly speaking, bleeding to the tune of $10 million a month," said Councilman Darrell Clarke. "We're interested to have this come to a conclusion very soon."
Councilman Bill Greenlee said: "Get it done and get it done in the time frame where we don't have to go to Plan C."
If the state does not soon approve the city's budget requests - worth $700 million over five years - the mayor will have to implement a dire "Plan C" budget that would prompt layoffs of 3,000 city workers and close libraries and recreation centers.
On the pension piece of this, Clarke said he had not spoken with union leaders, noting: "that is between the administration and the unions." He added that it wasn't clear exactly how the pension amendment would play out.
The handout provided to Council at the meeting noted: "It is not clear what happens if the City, despite its best efforts, fails in arbitration and/or collective bargaining to obtain agreement on the new plan."
There is zero chance that this will be done in time to delay Plan C. I say "delay," because elements of C must happen anyway. The sales tax hike only defers $155 million and $80 million at a cost tens of millions in interest to be paid in only three years. The "$700 million" estimated in sales tax revenue is grossly overestimated both on actual elasticity of sales behavior and on economic projections that are impartial. The economic tax base is shrinking and may never be what it was for years. Decades. We had a boom. Who knows when we'll have the next one? We are bleeding a lot more than $10 million a month in forfeit sales tax revenue that is only dedicated to pension relief. Plan C is a go. Let me spell it out for the part the handout didn't include -- what happens if the city doesn't get the terms required in the new state law is the sales tax goes away on June 30, 2010. That is what the law states plainly. WOW, can we read yet or did we go to Philly public schools?— CleanupPhilly- "Authorizes the city of the first class to impose a 1% local sales tax. In order to retain the authority to impose the tax, the city must freeze pension benefits for existing employees and adopt the revised benefit plan by June 30, 2010. If the city fails to comply, the authority to impose and collect the tax expires. The tax expires in 2014." That's what the link posted previously to the HB 1828 Amendment Summary says. State law has this tax expire in 2014. How is this sales tax going to compensate for the cost of the delayed pension debt service? It can't.— CleanupPhilly
- We should be going over now what is in Plan C. It's on. Look at the numbers. The bill delays only $235 million over two years, but requires a $90 million payment and the full balance of the amount needed by the pension by June 30, 2014. That would be at least $145 million PLUS all the interest, and all the increases from cost savings not achieved in collective bargaining and arbitration. It must be paid by that date. The city will have to cut now to do even get in the ball park of coming up with that amount by then.— CleanupPhilly
- Bill Greenlee is not even close. Darrell Clarke is not even close. It scares me that city council is so gorked out that they can't see this. Read the thing, people. Don't hire lawyers to read it for you, read it for yourselves.— CleanupPhilly
- The debt service the city must meet now, plus the debt service on deferring pension payments is not going to be covered by this mythological sales tax revenue. What revenue comes in goes to the pension. What revenue that doesn't must be paid by other revenue from the city. Has the paper even explored the value of this economic projection? We are assuring even deeper cuts than Plan C in the very near future in addition to the cuts that must happen now because this legislation can't possible happen in time to prevent Plan C, I, by 9/15.— CleanupPhilly
- It's really time to talk about what really can be cut, not libraries, not police/fire/trash, but all the services utilized by the smallest populations. We have to talk sales of city assets, putting property back in the paying tax base, and sheriff sales, just to start this off. Just go through the city budget with a calculator yourself. Don't take my word for it. Clarke presides over a district that has almost half of all property owners not paying property taxes. This is an issue he must avoid for as long as possible, he thinks, to create voter stability and less work for him at election time. This is not a good enough reason anymore to not collect property taxes at sheriff sale. That is not a good enough reason for a tax amnesty that forces the city to only collect trash twice a month.— CleanupPhilly
- This is the most important thing facing the city right now, and Brennan and Lucey just can't be the only ones who cover it.— CleanupPhilly
- Let me guess. No Jack Kelley.— RICK49
Comment removed.- Riogrande for mayor.— CleanupPhilly
Follow Chris on Twitter
David Gambacorta spent a small eternity writing about cops, drug dealers and serial killers. Now he’s writing about power and politics – which sometimes reminds him of the old crime beat. He joined the Daily News in 2005. And yes, he knows you’re not quite sure how to pronounce his last name. E-mail tips to gambacd@phillynews.com
Follow Dave on Twitter.
Catherine Lucey joined the Daily News in 2002 and has written about murderous drug gangs, political protesters and Harry Potter. After covering the 2007 mayoral election, she moved over to the City Hall bureau where she has been reporting on the Nutter administration.
Follow Catherine on Twitter
Jan Ransom, a native New Yorker, joined the Daily News in 2010 after graduating from Howard University. She has since written about the difficulty of filing police complaints, tax deadbeats and life after violent home invasions. She joined the Daily News City Hall Bureau in 2011 and has plunged headfirst into reporting on administration budget battles and City Council shenanigans.
Follow Jan on Twitter
Share your tips
Catherine Luceyluceyc@phillynews.com
Chris Brennan
brennac@phillynews.com
Jan Ransom
Ransomj@phillynews.com
- Attytood
- Philly Gossip
- Philebrity
- Philadelphia Will Do
- Its Our City
- Heard in the Hall
- The Daily Examiner
- Phawker
- Suburban Guerilla
- Young Philly Politics
- OurPhiladelphia
- PoliticsPa
- The City Room
- Politico
- Drudge Report
- The Huffington Post
- Wonkette
- Eschaton
- Daily Kos
- Choose Judges on Merit
- Blogorrhea
- February
- January
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- Budget
- Campaign News
- Casinos
- City Council
- City Hall
- DC
- Haikus
- Nutter
- Rendell
- Statehouse
- News | Sports | Business | What's Happening | Restaurants & Food | Entertainment | Living | Marketplace | Jobs
