State watchdog: Reject Phila city budget

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: