Thursday, December 25, 2014

The Gold Standard: Mayor Nutter's Budget Address

Editor's Note: IOM columnist Phil Goldsmith got this advance copy of Mayor Nutter's budget address ... OK, actually he wrote it. Here's what Phil would like the mayor to say.

The Gold Standard: Mayor Nutter's Budget Address

Editor's Note: IOM columnist Phil Goldsmith got this advance copy of Mayor Nutter's budget address ... OK, actually he wrote it. Here's what Phil would like the mayor to say.

"Madam President Verna, members of City Council, my fellow citizens,

"Today I present you with my third budget address since I took office as mayor.

"I have presided over the worst economic conditions since the Great Depression and the worst snow season in recorded history. Our streets have been blanketed white; our financial books are red. The record snows were not anticipated when I took office, but the signs of financial distress were clear.

"The Pennsylvania Intergovernmental Cooperation Agency reported in 2006 the grim financial conditions the next mayor would inherit. And just after I took office, it issued another warning that some of those conditions had gotten worse since the 2006 report was issued.

"And that was two years before the economic world collapsed.

"Despite painful actions taken last year - closing swimming pools, reducing library hours, implementing "March as you pay parades," raising fees and taxes - we're still faced with about a $150 million shortfall for next year and a gap of more than half-a-billion dollars in our five-year plan.

"We don't have enough money for a snow removal fund, to say nothing of a rainy-day fund.

 

"The great recession has exacerbated and accelerated the financial crisis PICA warned us about. But it would be wrong to place blame on the recession and snow, and wipe our hands of any responsibility.

"For too long, those of us in this great chamber, and I include myself, have taken the easy way out.

"We've delayed, stalled, resisted and talked to death the actions we should have taken years ago. If I've learned nothing else in my first two years as mayor, it's that time is money.

"The cost of not acting is now choking us financially and has reduced our options to act.

"Take the Board of Revision of Taxes. We have just begun taking baby steps to reform our unjust, unfair, politicized and antiquated assessment system. In 1980, three decades ago, a Philadelphia Inquirer editorial titled "Assessment Reforms Overdue" cited a study by the Pennsylvania Economy League calling for major reform and deplored the inequitable system.

"We, the body politic, did little. As a result, when we need every dollar we can get our hands on, we can't even enjoy the added revenues that would normally flow our way from market-value adjustments.

"Other cities in the state are now receiving casino revenues. Not Philadelphia. I will take some of the responsibility for this delay. I should have stayed out of the fight and just blamed the Gaming Control Board for its terrible casino location selections. The two casinos will most likely end up on the waterfront anyway, whether we like it or not.

"Yes, time is money.

"Conventional wisdom says not to try anything controversial when running for re-election. But we can no longer justify inaction by saying we'll do it later. These days, the day after an election we start planning for the next one.

"We need to act now.

"So where do we stand? From a revenue perspective, raising the real-estate tax is off the table and the wage tax would need Harrisburg approval. Our business taxes are already too high.

"A tax on, say, sugar, would most likely run into serious opposition from industry lobbyists who would swarm the state capitol like angry bees.

"That's why I believe we have little choice but to impose a special fee on trash collection.

"Virtually all of our neighboring communities do this, as do other major cities. Do I want to do it? Of course not. But we need to in order to maintain essential services. By squandering time and opportunity, we've left ourselves no wiggle room.

"Additionally, to balance our bottom line and ensure our financial burden is shared more equitably, there are a few sacred cows we must take on.

"Our largest nonprofit organizations, particularly our colleges and hospitals, need to pony up more. They are among our largest landowners but are exempt from real-estate taxes, which puts more burden on the rest of us. Frankly, they should be embarrassed at how little they give voluntarily compared with their peer institutions in other cities like Boston and Pittsburgh.

"We collect $1.3 million total in volunteer contributions. Boston University contributes by itself $4.9 million to its city.

"We need to take a hard look at the operations of the Police Department. Why? To quote Willie Sutton, it's where the money is.

"A study by PICA revealed that we could save money if we could raise the percentage of cops on the street (as opposed to in administrative positions) to levels that other cities have.

"Don't fall prey to the fear- mongers who claim that crime will increase.

"Let me remind you that New York City has reduced the size

of its police department by almost 17 percent since 2000, and yet its crime rate has hit record lows. In fact, if it had the same per-capita homicide rate in 2009 as Philadelphia did, it would have had 1,661 homicides instead of 461. We can no longer afford for any constituency to be untouchable. If the Big Apple can do it, so can we.

"We also need to streamline our ciy government by consolidating the row offices. Let's begin by eliminating the Clerk of Quarter Sessions office, which requires the approval of only those of us in this chamber - City Council and myself.

"There are some things we want to do but can't afford. This isn't one of them. It will cut costs. We need to do it now.

"Remember, time is money. And we're running out of both. If we don't make tough decisions now, when will we?"

Phil Goldsmith writes "The Gold Standard" column for It's Our Money. He was head of the school district in 2000-2001 and city managing director, 2003-2005.

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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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