Philadelphia doesn’t need a lecture on finances from the state Senate; the city needs permission to address its own urgent budget problems.
Republicans who control the Senate say they won’t speed up action on the city’s request for a local sales-tax hike and changes in its pension contributions, two moves that Mayor Nutter needs to balance the budget.
Without Senate approval, Nutter yesterday put into motion his “Doomsday” budget, which calls for thousands of layoffs, including police and firefighters.
That’s madness, but the Senate is in no hurry. Senate Majority Leader Dominic Pileggi (R., Delaware) and his colleagues say they are willing to consider the city’s request, but they want to include it in a broader pension-reform bill that would address similar problems faced by other cities and towns.
And that takes more time.
So, in the coming weeks, without this relief, Nutter will need to shift from issuing warnings of disastrous cuts to actually making them.
Of course, while there isn’t time in the state Senate to move more rapidly on Philadelphia’s looming fiscal tsunami, there is plenty of time for its members to engage in more partisan posturing over the state budget impasse.
The Senate GOP yesterday tried and failed to override Gov. Rendell’s line-item vetoes in an emergency interim state budget, a move that was headed nowhere but allows
Republicans to claim the ball is no longer in their court. The overall budget stalemate is in its seventh week.
Fixing the public pension crisis is a needed step statewide, but the Senate continues to overlook Philadelphia’s unique position. It’s the only municipality in Pennsylvania, and one of the few in the nation, required to submit a five-year balanced budget to a state authority for approval.
Other municipalities can wait a bit longer for a solution to their pension shortfalls. The city, due in part to its own failures to plan for this day, needs a quicker fix.
Then, too, there are major unresolved questions about the pension path upon which Senate Republicans appear to be headed.
They’re considering a state takeover of any municipal pension plan that falls below 50 percent funding (the city’s plan is now about 50 percent funded). But the agency that would take over the pension plans, the Pennsylvania Municipal Retirement System, is not equipped to manage a fund the size of Philadelphia’s $4 billion plan.
Another proposal being considered would force underfunded pension systems to place new workers in a 401(k)-style plan, instead of the traditional pension. That would remove a bargaining right from labor unions.
Nutter correctly argues that some of these moves would remove the ability of a mayor and city council to control a large chunk of a city’s budget.
Senate Republicans say the city might not be in this position if previous mayors and councils had acted responsibly, and there’s some truth in that. But pension funds across the nation are in trouble, due in part to the drastic stock market plunge last fall.
Senate Republicans are going out of their way to demonstrate that Philadelphia is not a special case. If they look again, they’ll see that no other municipality’s fiscal fate is linked so urgently to the pension problem. They should let Philadelphia handle its situation now while a statewide remedy is still being determined.