Archive: May, 2009
Link: Projected Pa. budget gap grows to $3.2 billion [Inky]
"In order to address the financial crisis we are in, clearly we need to raise revenue," Evans' spokeswoman, Johnna Pro, said yesterday. "We've talked about taxes being part of the mix; practically speaking, the [personal income tax] makes the most sense."
She said even a modest general tax increase would generate a substantial amount of guaranteed funding and that Rendell's limited-tax proposals on natural-gas extraction and tobacco sales would yield much less predictable revenue.
Just a year ago, officials feared what seemed the inevitable: a jailed population greater than 10,000.
But the count has declined each month since January, when the prisons housed an average of 9,787. The average this month is 9,342.
Link:Reassessing the BRT [Daily News]
EVERYONE WANTS the BRT to die - and quick. But how?
We know that the Philadelphia Board of Revision of Taxes is broken. The agency responsible for property-tax assessments has been exposed as being mired in corruption and incompetence. A devastating investigative series by the Inquirer found that jobs were going to the politically connected and that real-estate assessments were inequitable and sometimes manipulated.
Link: School budget approved; SRC hoping for state aid [Daily News]
The spending plan relies on getting 52 percent of its revenue from the state, including $300 million which Gov. Rendell proposed and which was part of $1 billion in education funding statewide that the Republican-controlled state Senate cut from the version it passed earlier this month.
Rendell and leaders in the Democratic-controlled state House are working to restore the funding.
Link: 5 on Council say 'Roger' to $34M Motorola cop-radio system [Daily News]
Public Property Commissioner Joan Schlotterbeck testified during a hearing that the city's maintenance contract with Motorola for the current $62 million, 800-megahertz digital system will expire next June.
She said that Motorola would agree to continue maintaining the old system only if the proposed upgrade - which could take up to two years to complete - is quickly approved by Council.
Link: Chester using casino cash to balance budget [Inky]
With the slots income, the city has balanced its ledger for the last two years and set up a rainy-day fund.
In the year before Harrah's opened, for example, the spending gap was $7.5 million, according to Thomas Moore, chief of staff to Chester's mayor.
Link: Council approves $3.8 billion budget [Inky]
Union representatives and community activists, under the umbrella of the Coalition for Essential Services, assailed those choices at a news conference before the morning Council meeting. They called the sales tax plan regressive and budget cuts harmful to residents.
They advocated raising the gross-receipts portion of the city business-privilege tax.
This morning, Philadelphia City Council unanimously passed Mayor Michael Nutter's $3. 8 billion budget. The vote comes after an extremely contentious budget process and major changes to Nutter's original proposal. While Mayor Nutter may be grateful that budget hearings have ended and the proposal passed, the saga is far from over. Below are the next acts for Mayor Nutter in the ongoing drama of the city financial crisis.
Help from Harrisburg. The budget approved by City Council requires authorization from the state for two major parts. First, the city will need permission to hike the sales tax from 7 percent to 8 percent for five years. Second, Nutter is seeking to delay about $230 million in payments to city's pension fund and extend the amount of time the city has to pay unfunded pension liabilities from 20 to 30 years. Both of these measures will require the legislature and governor sign off.
Passage is far from certain. Already, one member of the Philadelphia delegation-- freshman State Representative Brendan Boyle from the Northeast-- has said he will vote against the sales tax increase because it's unfair to businesses located close the city's border. More than Democrats, Nutter needs to worry about the Republicans who control the State Senate. The GOP is locked in a battle with Gov. Rendell over the state budget and they might refuse to help Philadelphia as a matter of anti-tax ideology.
Plan for the worst. If Harrisburg refuses to pass the enabling legislation, the city will be in serious trouble. It will be impossible to raise taxes mid-year and city government will be forced to cut hundreds of millions of dollars in an extremely short amount of time. That could mean layoffs of thousands of city employees, including police officers, firefighters, libraries, and other personnel. City facilities, such a libraries and health centers, might also be slated for closure. It's not entirely clear if City Council will have to approve these reductions, but you can sure there will be a lot of political fallout from such major budget cuts.
Battle with the unions. The upcoming negotiations with the city's four municipal unions are critical. Employee compensation-- salaries and healthcare benefits-- account for nearly half of the city budget. Mayor Nutter will be seeking major concessions from unions at the bargaining table. His budget includes no pay increases for city workers, higher contributions to healthcare and pension plans, and major changes in work-rules.
From Philly Clout:
City Council just passed the $3.8 billion* fiscal year 2010 city budget, designed to close a $1.4 billion gap in the five-year financial plan. Mayor Nutter is expected to quickly sign into law the spending plan, which goes into effect on July 1. But one major step is still needed. The state General Assembly must approve provisions in the city budget to increase the sales tax by 1 cent for five years and to stretch contributions to the city's pension fund to 30 years instead of 20 years.
If Harrisburg doesn't come through, the city will instead implement an alternate budget with wide-spread cuts, including police lay-offs, the elimination of some fire equipment and reduction in trash pick-up.
Tonight, I'll be moderating a forum about taxes and the budget. The details are below:
Date: Wednesday, May 20, 2009
Time: 6:30pm - 8:30pm
Location: Independence Ballroom at the Independence Visitor's Center
Street: One North Independence Mall West (6th and Market Streets)
The unstable economy has made life difficult for all. Not immune, the City of Philadelphia is faced with sinking revenue, a budget deadline, and a table of decisions. It's widely understood that today's tax rates will be changed to support the City's budget, and while nothing is certain, these potential changes would have a major impact on all who live and work in Philadelphia. Yeah...that means you.
It's imperative to understand how these changes will affect you and your personal budget. City leadership is joining Young Involved Philadelphia to discuss the forthcoming budget and answer questions about the future of Philadelphia's taxes. How would a sales tax hike impact weekly spending? What willPhiladelphia rent prices look like if a property tax increase is enacted in combination with full assessment? Why would legislators target a wage tax raise, and how will this new budget influence our daily lives?
It's your money. It's your chance to be heard. With major tax decisions looming, policymakers are listening to people's concerns: this is an opportunity to voice yours.
Confirmed panelists for the forum include:
* Councilman Bill Green, At-Large
* Derek Green, Special Counsel to the Majority Leader
* Professor Robert Inman, Professor, Finance and Economics, University of Pennsylvania
* Rob Dubow, City Finance Director
* Moderated by Ben Waxman, It's Our Money
**Co-Hosted by The Center for Progressive Leadership, The Committee of Seventy, The Institute for the Study of Civic Values, and UrbanPhilly.com Professional Network (UPPN)