Sunday, May 26, 2013

Subscriber Services |

Sunday, May 26, 2013

Heard in the Hall

Plan C averted, city gets its budget

Philadelphia City Hall and political coverage from the Philadelphia Inquirer City Hall bureau.

68 comments

Plan C averted, city gets its budget

POSTED: Thursday, September 17, 2009, 3:32 PM

Patrick Kerkstra

After months of agonizing delays, state lawmakers granted final approval today to a temporary Philadelphia sales tax hike and a two-year reprieve on city pension payments, a pair of critically needed measures that plug the final $700 million hole in a multi-year deficit that once stood at $2.4 billion

The legislation, which was just approved by an 32 to 17 vote in the state Senate, will, at least for now, bring Philadelphia’s budget and five-year plan fully into balance, ending a political and fiscal drama that has consumed City Hall for over a year.

The bill — which Gov. Rendell is expected to sign shortly — eliminates the need for Mayor Nutter’s fallback budget, better known as Plan C.

That plan would have closed the $700 million five-year gap through cuts alone. As many as 3,000 city workers would have been laid off under Plan C, and basic services such as sanitation and police and fire protection sharply reduced.

If Harrisburg had not acted today, layoff notices for those 3,000 workers would have been delivered tomorrow. With the vote, their jobs are preserved, and the libraries, recreation centers, courts and facilities that they staff will remain open.

The legislation raises the sales tax in Philadelphia from seven percent to eight percent for a period of five years. The eight percent rate will be two points higher than the sales tax in every other Pennsylvania municipality except for Pittsburgh, where the rate is seven percent.

The other crucial pieces of the bill are pension related. One addresses the city’s immediate cash flow crunch, permitting it to defer payments for the next two years. Those deferrals have to be paid back, with interest, beginning in 2013.

Another key pension provision extends the amortization period from 20 years to 30 years, in effect spreading the city’s pension burden out over a longer period.

Unlike earlier version of the bill, the legislation passed today does not include any statewide pension reforms, nor does it cap or cut back on retirement benefits for current or future Philadelphia employees. Labor leaders had campaigned vigorously against those provisions, and succeeded in convincing the House to delete them from the bill.

Minutes after the vote, Nutter and Philadelphia legislators called senior city officials in Philadelphia. Addressing over 40 of his managers on a speakerphone, Nutter proclaimed: "Plan C is terminated." The managers in Philadelphia erupted in thunderous appaluse.

Moments later, Nutter appeared overcome with emotion as he thanked his staff.

Asked about it by reporters after he hung up, Nutter acknowledged that he was indeed choked up.

“When you think of the magnitude of a what could have happened tomorrow … the magnitude of it is astounding and I think quite honestly that’s why so many people seem to have difficultly grasping what Plan C was all about,” Nutter said.

He said the “greatest thing that has happened is there is a renewed relationship between Philadelphia and Harrisburg.”

Click here for Philly.com's politics page.

68 comments

Previous Story: Nutter's message to city workers: stop holding your breath, Plan C is kaput

Next Story: Groups plead with Nutter to drop parade fees

Comments (68)

Comment removed.

0 like this / 0 don't • Posted 4:27 PM, 09/17/2009

The good, the bad, and the ugly. That boy is good, "You mean good and terrible"!

— haans

0 like this / 0 don't • Posted 4:28 PM, 09/17/2009

ResponsibleAmerican: I can tell you for a fact layoff notices and a layoff plan were going to happen

— Karen1000

Comment removed.

Comment removed.

0 like this / 0 don't • Posted 4:32 PM, 09/17/2009

Philly simply has a structural problem, in that there are too many union people getting paid crazy wages and benefits while the tax base continues to drop, and people who actually make money leave the city. There is nothing temporary about this tax hike. Visit PhillySolarPower.com if you want to learn about solar power for your home.

— JoefromPhilly

0 like this / 0 don't • Posted 4:33 PM, 09/17/2009

Does this mean Latryce Bryant gets to keep her 100K do-nothing job?

— DonQ

Comment removed.

0 like this / 0 don't • Posted 4:39 PM, 09/17/2009

Nutter!!!!!!!!!!!!!!!!! Hooray!

— squintz

Comment removed.

0 like this / 0 don't • Posted 4:41 PM, 09/17/2009

Amazing. The State, the City Countil and Mayor Nutter just boinked everyone in the backside avoiding what should have been done.

— Wildman Bill

0 like this / 0 don't • Posted 4:44 PM, 09/17/2009

what a joke! How about some of these politicians gives up some of exorbitant oerks they all seem to get? How about they pay a portion of their health coverage like the average worker does? How about they pay for their own parking and their cars?

— amjxray1

0 like this / 0 don't • Posted 4:46 PM, 09/17/2009

avoided what should have been done? you think firemen and police should be reduced? you think basic services such as libraries, rec centers and senior centers should be closed? that is just crazy

— Karen1000