Saturday, September 5, 2015

Editorial: New wrinkle on DROP

A IOM editorial in today's Daily News:

Editorial: New wrinkle on DROP

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A IOM editorial in today's Daily News:

IN THE THIRD Godfather movie, Michael Corleone tries to go straight, but can't escape his life of crime. "Just when I thought I was out," says Corleone. "They pull me back in."

We're starting to feel that way about the debate over eliminating the Deferred Retirement Option Plan, commonly known as DROP. Every time we think we know something for sure, a new wrinkle emerges that throws everything into flux.

The latest twist: The study commissioned on the costs of the program by the Nutter administration may be incorrect. The report, put together by academics at Boston College and touted as the definitive answer on the fiscal impact of the program, found that DROP has cost the city taxpayers about $258 million over 10 years.

That big number has been used by critics of DROP- including this page- as a reason to eliminate it.

Now, the Daily News is reporting that sources on City Council say that number may be off by as much as $100 million. Where did the new number come from? Back in August, Council hired an actuarial firm to look at the original Boston College study. The report has yet to be released, but a draft circulating among Council members reportedly found a major calculation error. That's extremely troubling, especially since it adds to the long history of incorrect assumptions about the cost of DROP, starting when the program began in 1999.

Philadelphia needs to overhaul how it calculates the fiscal impact of legislation. At the state level, every bill offered by lawmakers is required to include a cost estimate. It's time for Council, with one of the largest professional staffs in the nation, to dedicate more resources to figuring out how much its legislation will cost city taxpayers. Until it does, we keep writing checks in the dark - never a good idea.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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