I hate it when a plan fails to come together (The Next Mayor)

Our friends at PICA - that's the Pennsylvania Intergovernmental Cooperation Authority to you - alerted us to the release of their initial evaluation of the mayor's current 5-year plan. To sum it up, they're saying that after careful examination of budget trends, the 5-year plan is being held together by spit and bubble gum.

A mere three pages into the report, you already see the phrase "speculative revenue" and the assessment that:

PICA Staff does not believe a Plan that includes these two revenue sources [reimbursements to the Department of Human Services and the $45 million loan repayment from PGW] is balanced using reasonable assumptions.

And it just gets worse from there. Let me throw some more interesting facts out at you so that you can consider this whenever one of the candidates talks about planting 100,000 trees or putting in 1500 surveillance cameras or buying elephants:

By the end of the Plan, pensions and health benefits will account for about $1 out of every $4 the City spends up from $1 out of every $8 in FY01. (page 5)

The graph on page 6.

Beginning in FY09, the Administration projects that the wage tax base will grow at either 4.25% or 4.5% each year.

No other Five-Year Plan has projected that the wage tax would grow by more than 4% in any year. (page 10)

Economists call that "an assumption." Good economists call that a "bad assumption."

From page 12:
Labor Costs Are Another Substantial Risk in the Plan

The Plan assumes single digit employee health care cost increases in each of its years and $30 million in savings from a series of cost containment initiatives. While the cost containment initiatives are well thought out, it would be up to the next mayor’s administration to implement them.

Add to that the fact that "all of the City’s collective bargaining agreements expire at the beginning of FY09," and it makes you wonder which of the current crop will be able to resist the tempation to give away the store during these negotiations and who might possibly be able to pull back on some of the health and pension benefits.

The point is, the city is in trouble. Not today... not tomorrow... but soon. And it'll be up to the next mayor to dig us out of it. Read it and good luck sleeping tonight.

And yes, that's my second A-Team reference on this blog. What can I say, I watched a lot of television as a kid.

Comments (3)

Dave

A couple of the candidates do seem to be trying to outdo each other by proposing a more outlandish scheme than the last one that ended up on the front page of the newspapers or on the evening news. Seems to me like laziness on the part of voters and much of the media is largely to blame for this. Voters aren't taking the election seriously, and many reporters can't be bothered to write insighful analyses of the issues and the candidates' positions, or "waste" air time with candidate forums and/or debates, if they can instead splash a headline like "candidate X promises 100,000 ponies to disadvantaged children" on the front page. Another part of it is that any candidate with half a brain can see the problems in Philly and say, in general terms, what needs to be done to fix them.

I think one of the city's biggest problems is that it lacks a private sector. Other than a handful of politically connected companies and law/architectural firms, Philly is just a bunch of non-profits that are largely funded through tax dollars, unemployed people living off of tax dollars and, generally, tax dollars being thrown around willy-nilly to buy votes and influence. A large consideration for me when choosing a candidate was whether or not I thought that candidate would actually work to build up a private sector in the city and reign in the gross misspending of public money, or whether I thought he would just borrow a few hundred million more for glitzy, high profile spending projects that have city government trying to replace the private sector. The more some of these candidates promise to spend tax dollars on fixing problems, the more I'm convinced that they belong in the latter category.

Posted by Dave | March 6, 2007 5:28 PM

BTW, will one of the newspapers be doing a report at some point on what the various city council members, and their challengers, specifically support doing as far as property tax reform? It's a pretty huge issue and I, for one, would love to know what they all have to say on the subject before election day comes along.

Posted by Dave | March 6, 2007 8:51 PM

And I'm thankful for having this blog. It's been a helpful source of information. Hopefully it'll happen again next election (I expect more people will find out about it from election to election).

As far as property taxes, I'm sure we've all heard that the BRT has planned a full-value reassessment of all property in the city and that, without action from city council, this would result in a huge back-door tax hike for many people in the city (Dan went to Philadelphia Forward's conference on the topic). What I would like to hear from council members and challenger is how, if at all, they propose modifying the way property is taxed in Philadelphia in order to deal with the reassessment. I.e. do they support limits on increases? Exemptions? Land-value taxation? Would they try to get a proposition 13 style system of reassessment implemented? This last one would be the hardest and most ambitious, since it would appear to violate the state's uniformity clause, and would require the cooperation of the BRT, which is in charge of assessments (I'm actually not convinced that something that violates the uniformity clause is impossible, since Philadelphia is a city of the first class and gets a lot of freedom to enact its own rules and regulations, when Harrisburg's on-board. I imagine it's a matter of getting Harrisburg's cooperation).

Finally, is there anything other than changing the way property is taxed that they would suggest to make taxation more predictable and fair? For instance, the Philadelphia Forward website mentions that, currently, city council must set millage rates before property values are assessed, making it hard to predict the outcome of any action city council takes. Has this been addressed? Do they want to address it? Can they address it?

There's actually quite a bit of potential in this topic, and I think it should be getting a lot of coverage where the city council election is concerned, especially since the current council has decided to postpone dealing with it so as to not damage their re-election prospects (from what I hear, it was all originally scheduled to happen right around now, right in the middle of them getting petitions signed to run in the primary, and right before the actual primary election takes place).

Posted by Dave | March 7, 2007 9:02 AM

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