Saturday, September 20, 2014
Inquirer Daily News

Key votes on budget impasse due this week

IT'S THE BOTTOM of the ninth inning, the last minutes of the fourth quarter, we're down to the buzzer on the city budget.

Got your attention?

Mayor Nutter sure hopes so, after holding three news conferences over four days last week, detailing the budget carnage that will play out next month if the state Senate doesn't approve legislation this week to help the city balance its five-year financial plan.

That legislation allows the city to increase by 1 cent on the dollar the 7-cent sales tax and to stretch out payments into the city's pension plan from 20 years to 30 and delay some plan payments.

The Senate Finance Committee is due to vote today on the legislation, which then would move on to the Appropriations Committee and could come up for final approval by Wednesday.

The legislation, introduced in the state House on July 3 and approved there Aug. 5, is expected to be amended today.

Among the possible changes:

_Elected officials could be excluded statewide from the Deferred Retirement Option Programs, which allow employees to pick a retirement date and start accumulating pension payments at a fixed rate. The fixed rate also would be prohibited.

_The state would have the power to take over distressed municipal-pension plans. Philadelphia's pension plan is expected to be excluded from this provision.

_Philadelphia's pension plan, now funded at about 50 percent, would be pushed to increase employee contributions and to consider 401(k) retirement plans.

State Sen. Larry Farnese, D-Phila., has been pushing for DROP reform in the legislation. Senate Majority Leader Dominic Pileggi, R-Delaware, first tied approval of city budget issues to DROP reform in April.

"Dire circumstances provide unique opportunities for reform," Farnese said last week, noting that constituents have been angered by a DROP loophole that allows elected officials to retire for one day, collect six-figure payouts and then return to work.

The amended legislation is expected to be sent to the House on Wednesday. Best-case scenario for the city: The House concurs quickly and sends the bill to Gov. Rendell for approval. Worst-case scenario: House members tinker with the bill, which means it has to go back to the Senate, slowing the process.

If the legislation isn't in place by this time next week, the city then must submit to the Pennsylvania Intergovernmental Cooperation Authority a fallback budget that will include layoffs for 3,000 employees starting Sept. 18.

How did it come to that?

Nutter and the city's lobbyists have used two very different tactics to seek the General Assembly's approval on critical budget issues.

Nutter first played a low-key inside game, visiting representatives and senators in Harrisburg, revealing little about the potential consequences of inaction.

The firm that lobbies for the city in Harrisburg, S.R. Wojdak & Associates, was advising the city on this strategy. The Daily News repeatedly asked to tag along on one of those trips — a request Nutter's staff considered and debated, then rejected.

When it became clear that the city's issues had become tangled in the state budget impasse, Nutter shifted to a very public campaign, issuing warning after warning about how the city would be harmed without Harrisburg's help.

Nutter finally listed what the city would cut from the budget, stressing that he would be forced to slash services that most citizens view as vital — layoffs for police officers and firefighters, closures of every library branch and recreation center.

"We're always hoping for the best, but in government you have to prepare for the worst," Nutter said at a news conference last week. "The revised plan sets out a frightening list of devastating consequences."

But while Nutter tries to leverage public concern into political power, he has tried to avoid directly challenging the people who can help him most — the Republicans of the state Senate.

Pileggi has his own two-tiered political circumstance to keep in mind.

He represents a district so close to Philadelphia that it would have a clear view of the impact from the budget cuts. But he also represents 28 fellow GOP senators, some who hail from districts where a Philadelphia in fiscal despair elicits little or no sympathy.

Pileggi is locked in a standoff with Rendell about the state budget, now 55 days overdue. Pileggi wants a bare-bones budget with major cuts. Rendell has made some cuts already, but refused to come down to the level demanded by Republicans.

Pileggi was targeted as the man standing between Philadelphia and its budget by a handful of city residents active in politics and protests, such as the bloggers at Young Philly Politics, who promoted a rally outside his Delaware County office earlier this month.

But the scope of such protests is tiny compared with the public outrage last fall, when Nutter proposed closing some library branches.

And the dynamic of Pileggi as bad guy ignores the city budget's tortured evolution this year.

Nutter, after an easy inaugural budget passed by a friendly City Council last year, decided to pick a few fights when he introduced his spending plan in March. He prodded Council on DROP and other perks.

Council rebelled, and it turned out that Nutter didn't have the political power to push his budget to approval. Instead, he had to compromise with Council, dropping a proposal to raise the city's property tax, putting more emphasis on measures that required Harrisburg's approval.

More coverage
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  • CHRIS BRENNAN & CATHERINE LUCEY brennac@phillynews.com 215-854-5973
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