Monday, June 29, 2015

State watchdog: Reject Phila city budget

PICA staff says Nutter plan ignores reality

State watchdog: Reject Phila city budget

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The staff of the Pennsylvania Intergovernmental Cooperation Authority (PICA), which oversees Philadelphia city spending, "recommends that the Board disapprove" Philadelphia's revised five-year budget, as presented Sept. 10 after Mayor Nutter agreed to stop his court battle to block higher firefighters' expenses. PICA staff urged the board, headed by mayoral candidate-turned-filmmaker Sam Katz and including landlord Michael Karp, lawyer Rhonda Hill Wilson, Penn executive Gregory Rost, St. Joe's U business dean Joseph A.DiAngelo, and the top state and city finance officers, should vote No because:

   - The city budget includes unreasonable projections that city workers' wages and benefit costs will be flat, when it's more likely they will be forced higher over the next five years;
   - The city's plans for higher revenues and expense cuts " are not sufficient in themselves to produce a reasonable likelihood of positive fund balances over the next five years;" and,
   - More specifically, "reasonable estimates of the cost of employee wages and benefits, if incorporated into the Plan, would produce a budget imbalance of $411 million" by 2017-18.

The report also includes general steps the city needs to post a more realistic budget and win state approval: "a more rational and competitive tax system, a sustainable pension system, an efficient system of employee health benefits, competitive wages for workers, more robust economic growth, wellmaintained infrastructure, and improved services."

Read the PICA report at:  http://www.picapa.org/docs/SRFYP/SRFYP_FY14FY18.pdf

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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