Archive: June, 2009
Never-before-released records obtained by the AP through a request filed under the new state Right-to-Know law revealed some counties that are home to top legislators were targeted to receive disproportionately more legislative grant money during the last half of 2008.
The records, released by the Governor's Office, show legislators lodged special grant requests totaling more than $110 million from July to December - more than $430,000 on average for each of Pennsylvania's 253 lawmakers.
Nearly $2.4 million will go for a green jobs-training program for ex-offenders and a partnership to teach at-risk youths to create and restore murals.
The two programs should create an estimated 280 jobs over the next several years, the mayor's office said.
Today, an bill was introduced in City Council that would radically change the structure of the pension benefit for city employees. Sponsored by Councilman Darrell Clark on behalf of the Nutter Administration, the proposal would replace the current system with a hybrid of a defined benefit plan and a 401(k). Any employee hired after July 1st would be enrolled in the new program.
City Finance Director Rob Dubow says the change could save $500 million over the next thirty years. That might be true, but I can't help but wonder at the timing of this proposal. In some ways, it reminds me of Nutter's call to eliminate DROP and cars for elected officials at the outset of the city budget process. How so? Let's count the ways.
First of all, it's a controversial proposal that's being made at a critical moment. Nutter tried to get Council to kill DROP and cars at the start of the budget process. Now, he is publicly signaling a desire to change the pension benefit for city workers just as contract talks are heating up. Like the cars and DROP proposal, it's likely to anger union leadership.
If the typically fractious Council found unity, it can thank Nutter for the outrage he sparked during his budget address in March, when he railed about city-issued cars and the controversial Deferred Retirement Option Plan (DROP).
Councilman Bill Green characterized Nutter's opening budget moves as an "attack."
Until now, the Pennsylvania Intergovernmental Cooperation Authority had anticipated that the city would provide it with two budget proposals: one assuming lawmakers' approval of the two proposals, resulting in hundreds of millions of new dollars in revenue for the city; and another anticipating rejection in Harrisburg, accompanied by deep, detailed spending cuts to make up for the lost revenue.
That line of thinking seemed to change yesterday. In an intense 75-minute discussion during its regular monthly meeting, the five-member PICA board expressed concern that the city might not be ready to submit the contingency plan before the fiscal year ends on June 30. If so, members worried they might be out of compliance with their own statutory rules, which call for a spending plan to be provided by that time.
Citing the national recession and a growing state budget deficit, the governor called for an increase in the rate to 3.57 percent for the next three years, after which it would drop back to 3.07 percent.
A news release said the increase would raise $1.5 billion, which, with other new or expanded taxes Mr. Rendell has proposed, would cover the projected 2009-10 budget deficit.
Link: Moody's swing [Daily News]
UH-OH: The city's not out of the woods yet. Last week, a major credit-rating agency issued a "negative" outlook on Philadelphia's ability to pay back its debt. It's another reminder that the city's plan to deal with the $1.4 billion budget gap has major risks that must be navigated.
The statement, made by Moody's Investor Services, could make it harder for Philadelphia to borrow money. Moody's gives local governments ratings based on perceived ability to repay debt. It's similar to a personal-credit score, but for cities. This doesn't actually change Philadelphia's rating, but could set the stage for such a move in the near future.
Link: Hike our tax [Daily News]
AS THE STATE budget deadline looms, it's critical that Philadelphia-area lawmakers stand together and get approval from Harrisburg for Mayor Nutter's proposal to increase the local sales tax from 7 percent to 8 percent. No one likes to vote for raising taxes, but the consequences of inaction are worse.
The sales-tax boost would only apply to Philadelphia, but approval is needed from the entire Legislature. That means lawmakers from all over the state, many with little use for urban areas or taxes, will weigh in on the increase. To succeed in Harrisburg, the sales-tax hike will need full backing of Philadelphia's legislative delegation.