Archive: March, 2009
President Barack Obama signed the $700 billion stimulus bill with the intention of jump-starting the American economy. As federal dollars start flowing, the money could also be an opportunity for Mayor Nutter to repair damaged relationships with City Council....that is, if anyone can figure out how it all will work.
Earlier today, Mayor Nutter's senior policy advisor Mark Alan Hughes testified in front of City Council about the administration's plans for spending stimulus dollars. His testimony was part of the capital budget hearing and left more questions than answers. Over and over again, Hughes told Council that he wasn't certain how much money would be coming into the city, how it would be allocated, or how it would be spent.
Several Council members expressed frustration. Councilman Darrell Clarke complained about lack of information coming from the administration. Addressing Hughes, Clarke said: “I know that you know some things about this. It would be helpful if you can kind of let us know and not leave us in the dark until the end," said Clarke. "We know we're not dealing with absolutes, but if you could give us some idea it would be helpful.”
Hughes responded by explaining that federal deadlins and guidelines were a moving target. Obama may have launched a website-- Recovery.gov – to allow the public to track spending, but it's clear that many decisions haven't been made at the top level. That's particularly scary given the money is supposed to be spent fast.
Over the coming weeks, Nutter will have the unenviable job of developing a stimulus spending plan that can get out the door quickly and have buy-in from City Council. Here is the critical question: Can Nutter build consensus without sacrificing speed?
For more, check out Pro Publica Eye on the Stimulus.
Link: Mayor & Council: Grow Up [Daily News]
IMAGINE a burning house, with children inside. Their parents are there, but instead of getting their family to safety, Mom and Dad are arguing about the color of the drapes.
That's how the skirmishes and sniping between Mayor Nutter and City Council these days feels to those of us who live in the burning house that is the city in financial crisis.
What: Tomorrow, Philadelphia City Council will hold hearings on Mayor Nutter's proposed budget for capital improvements. Capital funds are used for long-term investments in the city's aging infrastructure. That means making improvements to city-owned buildings, new construction of public facilities, and streets resurfacing. Capital projects can also include repairs and investments in technology.
How much: Over the next six years, the city plans to spend almost $7.8 billion on capital projects. Much of that money will come from federal and state sources, with about $1.2 billion coming from the city. For this year, Nutter is proposing $76.7 million in city-supported funding.
Where it comes from: Capital projects are almost exclusively paid for with borrowed money. It's the same as managing your personal finances-- you'd rather use debt to finance long-term expenses like a car or home ownership instead of short-term items like food or entertainment. The city will be required to repay those loans over time from the general fund. Despite the fiscal crisis facing the city, Nutter still plans to spend more than Street did in his last three years in office.
Where it will be spent:
Here is a list of major projects:
-Improvements to recreation centers -- $9.3 million
-Improvements to Fairmount Park facilities and parkland -- $6.9 million
-City Hall Exterior Improvements -- $4.5 million
-Enhancement of technological infrastructure -- $4 million
-Renovations of prison facilities -- $3.6 million
-New facility for the Fire Department -- $2.5 million
-Improvements to Schuykill Riverfront -- $2.5 million
-Improvements to Pier 11 North -- $1.4 million
Potential flash-points: The capital budget is likely to generate less controversy than the rest of Nutter's proposal, but expect members of City Council to ask if their districts are getting a fair shake. Also, much of the money coming to the city from President Obama's stimulus package are earmarked for capital projects, so there will be questions about how that funding will impact Nutter's priorities. Finally, some reform groups-- like the Committee of Seventy and Philadelphia Forward-- have questioned the transparency of how legal work connected to bond deals is given to law firms.
The biggest anticipated cost increase is for labor and benefits, which SEPTA projects will go up $40.5 million - 5.4 percent - to $792.5 million. SEPTA is currently negotiating with Transport Workers Union Local 234, the transit agency's largest union, whose contract expired March 15. Other contracts expire in early April for about 720 employees in the Suburban Transit Division.
SEPTA anticipates its labor force will grow 49 people, from 9,401 to 9,450, primarily because of the budgeted hiring of 46 additional bus and rail operators.
Link: Council: DROP isn't yours [Daily News]
SOME City Council members were in a tizzy yesterday over this paper's front page featuring Anna Verna, Marian Tasco, Jack Kelly, Frank DiCicco, Donna Reed Miller and Frank Rizzo and the amount of cash they could get from participating in the Deferred Retirement Option Program (DROP).
Councilwoman Tasco attacked the story in Council, saying that the big payouts don't take money from the city, but pay Council people a portion of their own pension money early.
Link: Nutter budget gets bumpy Council reception [Daily News]
Nutter's plan to increase property taxes prompted some Council members - Curtis Jones Jr., Bill Greenlee and Bill Green - to ask why the city's wage tax was not considered for an increase.
Nutter, who has long advocated cutting wage and business taxes, wants Council to approve property-tax hikes for residents and businesses of 19 percent on July 1, reduced to 14.5 percent next July and then returned to their current levels in 2011.
Yesterday, Philadelphia City Council started holding hearings on Mayor Nutter's controversial budget plan. Over the next two months, Council will hear from hundreds of hours of testimony from department heads and other city officials. Below is a link to my op-ed on the hearings, which appeared in today's Daily News.
Click here to read the op-ed.
Mayor Nutter wants to temporarily increase property-taxes and the sales tax to deal with the $1.4 billion hole in the city budget. Today, City Council held the first of many hearings on the plan. Based on the questions asked by Council members, there will be a lot of resistance to his proposal. Throughout the hearing, there were glimpses of the alternatives that Council might push instead of simply hiking property-taxes.
The first came from Councilman Bill Greenlee, who is usually a reliable ally for Nutter. Asking about the property-tax hike, Greenlee expressed concern about seniors, poor people, and those on a fixed income. He asked if the administration would consider an exemption for low-income homeowners. Clay Armbrister, Nutter's chief of staff, said they were willing to think about it. Since Philadelphia has one of the highest rates of low-income home ownership in the country, that could potentially apply to a lot of people.
The most direct defiance came, predictably, from Councilman Bill Green. He challenged the administration's assertion that raising the wage tax would be politically problematic in Harrisburg. Green also expressed his belief that “nothing should be off the table” and increasing the wage tax should be strongly considered to better spread the burden. Given that Nutter has made clear he opposes increasing the wage tax, expect Green and other critics of the administration to push this angle throughout the budget hearings.
Finally, Councilwoman Maria Quiñones-Sánchez called on the administration to consider increasing business taxes. She wants to take a hard look at the gross receipts portion of the Business Privilege Tax and explore ways to make big corporations pay more. Quiñones-Sánchez specifically called out Wal-Mart and Coors as two companies that do a lot of business in the city but don't pay much in the way of taxes.
It's becoming more and more clear that Council is dissatisfied with Nutter's budget proposal. However, simply saying no is not enough. In the coming weeks, opponents of Nutter's plan will have to come together around alternatives. Without a competing vision, it's unlikely anyone will really be able to stop the Mayor's push for raising property and sales taxes.