Tuesday, February 9, 2016

Correctly identifying the problem

The mayor made a big, controversial decision this week: He didn't appeal the FOP contract award. The award contains some things the mayor doesn't think the city can afford -- namely, raises for cops -- but, at the same time, it makes changes to pension and health benefit structures that the mayor wants, and that should help the city's fiscal position in the long term. The mayor did the math and decided that fighting the pain wasn't worth risking the gain. The Daily News says today that he's right:

Correctly identifying the problem

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The mayor made a big, controversial decision this week: He didn't appeal the FOP contract award. The award contains some things the mayor doesn't think the city can afford -- namely, raises for cops -- but, at the same time, it makes changes to pension and health benefit structures that the mayor wants, and that should help the city's fiscal position in the long term. The mayor did the math and decided that fighting the pain wasn't worth risking the gain. The Daily News says today that he's right:

The point is, it's not wages that have created the most havoc on the city budget; it's the spiraling costs of health care and pensions, made even worse by the city's inability to impose any controls over those costs.

For example, between 2001 and 2008, city spending on health care rose 123 percent; pension costs rose 100 percent. That's in seven years.

A big part of the reason Philly is in the position it's in today is because of politicians thinking in the short term (and really just about their own terms). Of course, we can expect Mayor Nutter to try to make this work in the short term -- he'll shout from the rooftops in his re-election campaign about his accomplishments restructuring pension and health benefits -- but that doesn't change the fact that he's looking ahead here, and deserves a nod for that.

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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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