Does Katz appointment to PICA board mean trouble for Nutter?

Sam Katz says he won’t be a mayoral candidate, but the city would benefit from contests for that office and for City Council. (File Photo)

Gov. Tom Corbett is paying attention to Philadelphia. Yesterday, the new governor appointed himself chairman of the troubled Delaware River Port Authority. And this morning, Corbett selected former Republican mayoral candidate Sam Katz to head the board of the Pennsylvania Intergovernmental Cooperation Authority (PICA), which provides state oversight of the city budget.

The move raised our eyebrows because Katz has been an outspoken critic of the Nutter Administration: He's argued that the mayor has not done enough to deal with big fiscal issues like the pension fund and employee compensation.

As a member of the PICA board, Katz will be in a much better position to do something about these concerns: The city is required to submit an annual five-year financial plan to PICA for approval. If the PICA board decides that the budget passed by City Council is not truly balanced, it can withhold millions in state loans and grants. Even if PICA approves the budget, the agency can still issue position papers to influence the public debate on city fiscal issues, as it has previously done on things like DROP and consolidating row offices.

We asked Katz if he plans to use his appointment to get tough on the city. He declined to get into specifics, but indicated that he does plan to push Nutter on some issues.

“Philadelphia is on a slippery financial slope and has been avoiding tackling the very difficult choices it confronts,” said Katz in an e-mail. “PICA is critical in helping the City and the people of the City take a longer view and start to implement solutions that will restore financial stability. I hope to contribute to that.”

The mayor, for his part, seemed to welcome the appointment. Through a spokesman, he praised Katz's previous experience in financial services. He also acknowledged some of the issues previously raised by Katz.

“I and the administration look forward to working with him to make sure we maintain fiscal integrity and take on the challenges of our fiscal cost drivers, pensions and healthcare, and prepare for the future of our great city.”

So far, so good. But it's worth noting that the many of the financial challenges looming on the city's horizon -- like cuts in state funding and the projected deficit at the School District -- could make for some interesting fireworks between the city and PICA down the road.

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