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Friday, June 26, 2009
Come Aug. 1, no sales tax hike could add up to spending cuts

City Hall will have to pay a high price if state lawmakers drag out Pennsylvania's budget battle past Aug. 1.

The precise amount: About $9 million a month.

Figure that if lawmakers approve the 1-cent increase in Philadelphia's sales tax that the Nutter Administration is seeking, it would generate an extra $100 million in the fiscal year that begins July 1. But knowing that the state budget in recent years has not been passed on time, Nutter officials, and City Council, didn't actually count on collecting the extra sales tax cash til Aug. 1.

But what happens if Aug. 1 comes and goes and there's still no word from Harrisburg?

Nutter this morning said it was "a little preliminary" to get into that, i.e., if workers would have to be furloughed or in what other ways the city would have to "start ratcheting back or constraining" its spending.

Looking ahead, he conceded that if there were no resolution come fall and into winter, "There would be significant cash issues for the city."

But for the moment, "It's pure speculation as to what might happen up in Harrisburg," Nutter said, noting it was  "a very complicated situation" and one that he was "monitoring closely."

Given the terrific uncertainty... does the mayor sleep at night? "I sleep very well and very soundly - when I actually go to sleep."

Click here for Philly.com's politics page.

Posted by Marcia Gelbart @ 12:23 PM  Permalink | 5 comments
Comments   
Posted 01:10 PM, 06/26/2009
CleanupPhilly
It's not a "complicated situation" imho. It's not even complicated to give a straight answer to the press about. There is not going to be a hollywood miracle, a hail mary pass at the last minute. The lines are hardening, the votes are not going to change. Philly is perceived to have done little to cut, collect, and assess to warrant it's claim that it can do no more so it must have a sales tax hike. Council didn't drop DROP, so the claim that they must delay and refi pension payments when they didn't maximize pension payments into the system by getting the highest paid city employees to pay fully into the pension system rings hollow. Free city cars are still grossly overused, a symptom of the larger reluctance to be honest about the need to get more for less from city government. Harrisburg has done a lot more than the city has to cut and streamline, and the word "right-size" in Philly has never been used. The day is here. We know that these rescue measures that spare Council from heavy political lifting are simply not going to pass, and Council must do the work Nutter requested originally. Nutter is soon going to say "Told ya so" to 17 people.
Posted 01:18 PM, 06/26/2009
CleanupPhilly
It will be Nutter that has to do all the hard work of cuts, collections, and assessments. Nutter will have to out all the bodies to get Council to pass AVI and change the millage, an issue the press could cover now without permission. The overdue property taxes of half a billion, the forfeit bail of $1 billion, and other collection matters need press attention now so legislation can be crafted now. People have to be fully informed now, so Council gets a better picture of where people stand today. That way we won't repeat the "public forum" debacle that came up with property tax raises as an acceptable outcome that wasn't. People are not as informed as they need to be, and Council is delaying action as long as possible and hope that magic money falls from the sky. They would rather wait to pay a bill until the collector hounds them and they can't answer the phone. This is not good proactive management, and it leads to harder outcomes for people and programs later in the scramble. The press has to confront Nutter and Council with specifics to aid not only transparency but also consensus.
Posted 01:26 PM, 06/26/2009
CleanupPhilly
The sales tax hike could fail before Aug. 1, and there will be spending cuts. I just don't get why Nutter can't say straight up that it's unlikely that the sales tax hike will pass given the feedback he's gotten from Harrisburg. It's no longer "pure speculation" as to what will happen in Harrisburg. The result will be that Philly government will have to completely change its mindset of favors for votes to cuts, collections, and up to date assessments so it has a revenue base. Philly will have to stop landbanking so much property to hold onto the blight it creates by government policy, and instead grow the privately owned property tax base. The cash potential is there, from selling the Dell to listing the ALL of the properties held by the RDA and PAID/PIDC and even PHA that the can't use, for sale with the people who sell property for a living, known as real estate agents. It's not rocket science. The old way is not working, and Council cannot face it until the press and public force the issue.
Posted 02:50 PM, 06/26/2009
js5180
Come on, Cleanup, what about the 522 million? You haven't forgotten them, have you? But anyway, you are dead on, as always. Time for some serious cuts. Found out the other day that DHS has been funding some of those murals, of all things. Number 1, I haven't met an actual person on the street that likes murals, and number 2, the people who are spending the money have just lost their way.
Posted 04:32 PM, 06/26/2009
junethe4th
You mean 1% sales tax increase, not 1 cent. Big difference. It will be a real shame if the City has to cut spending, wont it? Imagine, politicians not receiving a paycheck, oops my bad, never happen, only the rank and file will suffer. Politicians are now the neo-aristocracy of this once great country.
5 comments
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The Philadelphia Inquirer's Jeff Shields, Marcia Gelbart, and Patrick Kerkstra take you inside Philadelphia's City Hall.
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