City controller says city's five-year budget is flawed, calls for plan's rejection

CITY CONTROLLER Alan Butkovitz yesterday urged a state-appointed fiscal watchdog to reject Philadelphia's five-year budget, saying the plan overestimates tax revenues and therefore, risks potential deficits.

Butkovitz cited "overly optimistic revenue" projections from four tax streams - the city's business income and receipts tax, sales tax, realty transfer tax and parking tax - especially in the first two years of the plan, when "general economic conditions are predicted to be less favorable compared to what the city is projecting."

Mark McDonald, Mayor Nutter's spokesman, said Butkovitz's criticisms aren't backed up with evidence.

"The city's finance and budget offices engage in a very detailed process to develop revenue estimates," McDonald said yesterday.

McDonald said the city, in crafting the budget plan, consults with marketplace experts and global economists. The city also analyzes tax collection revenues from prior years.

The board that Butkovitz wants to reject the budget is the Pennsylvania Intergovernmental Cooperation Authority, or PICA. It is expected to take up the city's budget plan next week.

City Council passed the plan and Mayor Nutter signed it last month. McDonald questioned why Butkovitz did not raise his concerns during budget hearings.

"We firmly believe our revenue estimates are accurate, and we're hopeful and confident that PICA will see it that way," McDonald said.

PICA Executive Director Harvey Rice yesterday sent Butkovitz a letter, asking him to provide documentation and methodology used to reach his conclusion.