The Next Mayor

I moved back to Philadelphia from Western Pennsylvania about a year ago and one of the first things that I noticed was the large number of people who ride bikes around town. Now, a coalition of groups is pushing to establish a bike sharing program similar to the wildly successful PhillyCarShare. City Council held a hearing on the subject yesterday and I decided to dig into exactly how the city can pay for something like this.

Here is how bike-sharing works: The city or a non-profit installs bike racks in strategic locations around town. City residents (and anyone else) can borrow the bikes and return them to the racks. Advocates say that bike-sharing programs can take cars off the streets and reduce the burden on mass transit agencies.

The cost of each bicycle can run as high as $4,500. That's mostly do to the need of special technology designed to decrease the amount of bikes that are lost or stolen. Given the budget constraints already facing Philadelphia, it seems unlikely that the government will provide the funding necessary to get such a program off the ground. Luckily, there are alternative ways to raise revenues for bike sharing.

Several cities in Europe and the U.S. have experimented with selling advertising space on bikes and other locations like storage racks. The fees from advertising are used to pay the purchase of new bikes, maintenance, and to build the infrastructure required to run the program. In Washington DC, the city has teamed up with mega-advertiser Clear Channel Communications and made bike sharing available to the public for an annual membership fee of $40.

Personally, I am a big fan of selling advertising space to pay for the program. This seems like the best option to get the cash needed to buy the bikes and install the necessary equipment across the city. Using advertising revenues seems like a smart idea because, to some extent, it innoculates the program from having to worry about finding funding every year. Right now, it seems like City Council and some foundations are interested in figuring out a way to fund bike sharing. That might not be true in a year or so.

On the other hand, many think that our culture is already saturated with advertising messages, and there are few too places where we can escape the relentless and corrupting beat of "buy me." Any good alternative ideas out there? Share, please.

Michael Nutter campaigned on the promise of open government. Yesterday, that claim was put to test. A group of reporters found out about a private briefing that violated a state law prohibiting elected officials from conducting public business behind closed doors. WHYY reporter Susan Phillips was there and provided It's Our Money with a first hand account of the action:

The Mayor found himself in a stand-off with reporters today over the state's sunshine laws. City Hall reporters caught wind of a budget briefing Mayor Michael Nutter planned to conduct with Council members behind closed doors. When reporters insisted on being present, the mayor send an aide and one of his body guards to rid the room of journalists. KYW's Mike Dunn told those present that if there is a quorum present-- that's more than nine Councilmembers-- it must be open to the press.

5) Council wants to know when the Fire Commissioner will be filling vacancies among emergency services personnel.

I'm excited to announce the first It's Our Money podcast! I sat down with Helen Gym from Parents United for Public Education and Wayne Harris, who is the budget director for the School District of Philadelphia. I asked both of them to explain the major issues facing public schools in Philadelphia. You can listen to the podcast by clicking here.

Bonus links: Parents United for Public Education and the budget page for the School District of Philadelphia.

As a daily SEPTA rider, I've always kept a close eye on any news concerning the public transit agency. An article in the Inquirer takes a closer look at the board of directors responsible for overseeing the nearly $1 billion SEPTA budget. The story, prompted by two appointments soon to be made by Mayor Nutter, highlights an ongoing pet peeve of mine: the small amount of representation given to Philadelphia despite the fact that we make up the majority of riders (and funders).

I'm all for regional cooperation, but the SEPTA board is closer to suburban domination. Just take a look at the regional composition of the board vs. the statistics provided by SEPTA about how is actually using the system on a regular basis. According to statistics from SVmetro.com, 78% of SEPTA's daily riders are Philadelphians. That means that the majority of revenue generated by riders, expected to be more than $300 million in FY08-FY09, comes from the pockets of Philadelphians. The membership of the SEPTA board has the opposite demographics.

Only four people on the board-- Jettie Newkirk, Denise Smyler, Christian DiCicco, and Herman Wooden-- actually live in Philadelphia. The rest come from the suburbs counties that, even when combined, make up the minority of those who use SEPTA. I am not saying that suburbanites don't care about the issues facing urban dwellers or that they should not have a voice on the SEPTA board. However, the fact remains that giving Philadelphia greater control over how revenue is used-- money that comes straight from our pockets-- is basic fairness.

City officials have tried two approaches for increasing our clout on the SEPTA board. The Street Administration basically went to war, suing the transit agency over fare increases and threatening not to renew the lease that allows SEPTA to operate the Market El and Broad Street subways. In contrast, Mayor Nutter seems to be trying a charm offensive. He has reached out to the new leadership at SEPTA and will be appointing two new members of the board in coming days. Nutter seems to believe that a soft touch is the best approach.

I'm not sure which approach is likely to yield results. Any thoughts out there about what needs to be done to increase Philadelphia's say over how our fare dollars are spent? Let me know in the comments.

Last week, a group of City Hall reporters demanded access to a private budget briefing Mayor Nutter gave to City Council. Reporters argued that the Pa. Sunshine Act, which makes it illegal for elected officials to deliberate in private, gave them the right to be present at the meeting. Nutter eventually allowed the reporters to attend the briefing, but not before making clear that he believed their interpretation of the Sunshine Law was incorrect.

This incident has sparked a lot of discussion and comment on various blogs that cover politics. Chris Brennan posted a great summary of what happened on Clout. Brennan ends with a quote from a source who believes reporters should have access to these types of meetings:

Teri Henning, general counsel for the Pennsylvania Newspaper Association, had a different take [than Nutter]. She said the attendance and participation of Council members added up to deliberation under the state law since they will one day have to vote on the city's budget. "The intent of the Sunshine Act is to allow the public to observe the discussions and deliberations leading up to a decision," Henning said.

Heard in the Hall also had a post on the subject, but the Inquirer blog seemed to be a little more sympathetic to Nutter's position. Here is the graph that provides the Administration's viewpoint:

Nutter administration officials are plainly angry about the incident. They say that the administration has so far been remarkably open and transparent. That is absolutely true. Reporters' questions are answered promptly. Facts and figures that in past administration were difficult to obtain without filing an official and time consuming right to know request are now handed over with little to no fuss. And Nutter and his senior staff remain remarkably accessible to the press.

Over at Young Philly Politics, City Councilman Wilson Goode wrote his own defense of holding closed door meetings. For him, the main sticking point is the difference between a briefing and a deliberation:

15 of 17 members accepted an invitation from the Mayor to receive a briefing on new budgetary issues.

That's profiling. :)

I am not a lawyer. I have no idea if the meeting held last week was a violation of the Sunshine Act. I do know that it looks bad for the Nutter Administration to even try kick reporters out of meetings. After all, this is the candidate who campaigned on restoring accountability and transparency to City Hall. Still I can't help but point out that the accounts of the meeting published the next day did not really reveal anything that we didn't know already-- namely that revenues are lower than expected due to the struggling economy.

For me, the real issue is how can the public be involved in the budget negotiations now that the public hearings have ended. The next month or so will be dominated by behind the scenes wrangling as Council members try to squeeze every dollar possible out of the budget. How can the public know about these discussions and have some involvement in the decisions that are made?

Via Philebrity, check out this time machine that takes you back to Philadelphia in the mid 1950s - a time when Camden was apparently our "equally industrious, equally prosperous neighbor" and Levittown was only 2 years removed from being "farmland and forest."

The video turns out to be a big long infomercial for WPTZ which is what KYW (that's Channel 3) used to be.

How many major Philadelphia employers can you spot that aren't there any more? What has taken their place?

And what ever happened to all those awesome flashing signs?

The city's and school district's budgets are getting a lot of play in the news today. The former for its newfound behind-closed-doors status and the latter for a range of issues that should be discussed on Food Network. And by the way, if you're depending on Wireless Philadelphia to access this blog, let me know and I'll start printing it out and mailing it to you.

To start off, while Mayor Nutter may not be seeking to contract out any city services like former Mayor Rendell, there is one thing he wants to "privatize" - budget negotiations with City Council.

After last week's well-publicized flap over the discouragingly misnamed "Sunshine Act", the Mayor and Council have decided to meet in small groups to avoid the suspicious minds of the media, making those minds even more... well... suspicious.

The Inquirer, Daily News and KYW 1060's Mike Dunn all have pieces about these meetings this morning. My morning routine of listening to Newsradio in the shower (it's the only thing that comes in on my shower radio) greeted me with the kind of titillating story that includes phrases like "sources tell" and "sources say" which tip me off to the fact that I'm being let in on a secret that the mayor doesn't want me to know.

That secret:

Sources tell KYW Newsradio that the Nutter administration is considering an increase in Philadelphia's hotel tax, as it struggles to revise its budget for the coming year.

So wait. If I want to stay in one of those big, fancy Center City hotels that are about 7 blocks from my house, I'm going to have to pay 1% more? Noooooooo!

Apparently, the real problem is with the 5-year plan which seems to be a little out of whack now that it's clear that the economy is slowing and fewer people are paying the same real estate transfer tax that the folks who are selling me my house will pay. The Inky gets a quote from Councilwoman Quinones-Sanchez who sums it up pretty succinctly:

"[Mayor Nutter] is going to have to figure out what he is willing to give up. . . . He can't get the tax cuts the way they are scheduled and still keep all this money on the table for all the priorities that he outlined."

That oughta set tax reform advocates a buzzing. From Brett Mandel at Philadelphia Forward:

One idea that should be rejected immediately is any notion of stopping the city’s tax-reduction program. The city's modest tax reductions have slowly and steadily improved the city's competitiveness and the gap between national job growth and city job growth has been almost cut in half since the city began its tax reductions. Without continued improvement in our tax competitiveness, there is no reason to believe that Philadelphia will do anything but continue to lose jobs and lag economically.

So following the post-inauguration honeymoon period, the sides are starting become clear. Councilwoman Quinones-Sanchez - who is probably not alone - is providing the loyal opposition and asking the necessary questions about the tax cutting priorities while the Mayor and other council members have shown their support for a position not unlike the one outlined above by Mandel - though probably not as fiesty!

Over on the school district budget, WHYY's Bill Hangley spoke to some folks who understand that while serving healthy, locally-grown fruits and vegetables in the schools may cost a little more, it should be seen as an investment.

After all, as reported in the Daily News, they've already made an investment of sorts in forgoing a bunch of revenue that they used to get by selling soda and unhealthy snacks to school kids. Unfortunately, it seems that - like gambling revenue going to New Jersey and Delaware - that money is going to your local corner bodega:

[District Chief Operating Office Fred] Farlino said many students skip the federally funded breakfast program because they come to school too late or they fill up on corner-store snacks on the way to school.

The comments section of that story makes the usual under-informed if passionate case to blame the parents for not making breakfast. Show of hands: how many people had time to cook themselves a complete and healthy breakfast this morning?

As if that weren't enough, the District also had to answer to Council for possibly replacing those unhealthy snacks and sodas with tainted beef. Mmm Mmm good.

Ok. So they weren't necessarily replacing the snacks and sodas with the bad meat but even so, not even being able to tell whether they got any of that downer cow goodness got into their cafeterias should be enough to turn any kid into a vegetarian.

As for Wireless Philadelphia, looks like it will be dealing with its own tainting - having the plug pulled. Metro has more.

The award for reporting some actual good news also goes to the Metro for letting us know that despite what's going on with every other government and municipal agency in the country, SEPTA, for once, is going to be ok:

Instead of the annual begging for state money, the transit agency is now preparing to build on an $80 million surplus in funding it received last year, SEPTA officials said last week.

The dramatic rise and fall of Philadelphia Safe and Sound brought attention to the complex web of funding streams and organizations used to finance government programs. Now, a new report from the Fels Institute of Government at the University of Pennsylvania looks for ways to completely reorganize the process. Researchers described their findings in an op-ed that appeared in today's Philadelphia Daily News.

The report conservatively estimated that more than $226 million will be spent this fiscal year on after-school and other community-based prevention programs, a much larger amount than in many comparable cities. These funds are spent by various city departments, intermediaries and private non-profits through byzantine pathways, without an overall plan and with inadequate means to collect data and track outcomes.

The report also says that the city is too dependent on a single state funding stream. Of the estimated money being expended this fiscal year, 60 percent comes from Act 148 funds administered by the state Department of Public Welfare. If this money is less available due to strained fiscal conditions or a change in guidelines governing its use, the consequences for the city youth services could be severe. The city needs to diversify its funding sources, including expanded use of the School-Age Child Care subsidy and more support from corporations and foundations.

Thus far, the response from the Nutter Administration has been to solicit proposals from organizations interested in taking over Safe and Sound's responsibilities for funding youth programs. That's a step in the right direction, but does not really begin to address the issues raised by the report from Fels. It will be interesting to see if our reform-minded mayor tackles the bigger problems connected to funding youth programs in Philadelphia.

Since February, City Council has held 65 hearings on Mayor Nutter's proposed budget. The hearings were the public side of the process. Now, the private side has begun. Mayor Nutter and City Council are engaged in intense negotiations around the city budget.

The budget hearings were held at fixed times and open to the public. The high level meetings between City Council and the Mayor are not. Elected officials will decide how to spend nearly $4 billion worth of tax dollars and other revenue. We can get a sense of what the priorities are going to be from Nutter's proposal and the hearings. However, we won't really know what happens behind close doors until the budget is approved by City Council. Even then, we'll only have part of the story.

Frankly, this portion of the budget process highlights the importance of the press. These discussions are shielded. Journalists have been aggressive about finding out information and bringing it to the public. A group of City Hall reporters even crashed a closed budget briefing that seems to have violated the Sunshine Act. It would be almost impossible to follow this without the budget process without the media.

So, how are things going? Nutter seems to be wrestling with the challenges of governing. Several factors have forced him to scale back his budget proposal. Instead of offering a little something for everyone, Nutter will have to make tough choices about his spending priorities.

Much of this is beyond Nutter's control. The trouble in the national economy has clearly impacted Philadelphia. For example, taxes collected from the sales of real estate are down. That means there is less revenue to spend on everything-- tax cuts, health centers, recycling, and all the other proposals offered by Nutter's budget.

Nutter is also grappling with helping fill the $38.9 million deficit facing the Philadelphia School District. The state and city will need to contribute money to fill the shortfall. The deficit, which is much smaller than last year, is another expense that takes away from Nutter's priorities.

The debate about taxes continues. Nutter has always been a proponent of tax cuts for business. The problems with revenues is prompting a discussion about altering the size and scope of cuts. At the same time, some Council members are arguing for the restoration of wage tax cuts for the working poor.

Another factor is upcoming contract negotiations with city unions. The exact cost of salaries and benefits for city employees for the next four years is unknown. Nutter has budged $402.9 million for contracts, but that number is likely to change as a result of negotiations.

In coming days, City Council and the Mayor will be required to make tough choices about budget priorities. Without a doubt, problems in the national economy and shortfalls in the School District budget highlight how outside forces can impact the budget process.

Contracts for city workers will expire in less than two months and municipal unions will have to negotiate new agreements for more than 20,000 employees. AFSCME DC 33, the largest of the four unions representing public employees, is embroiled a bitter election that could have major implications for contract talks.

AFSCME DC 33 holds leadership elections every four years. The process happens right before contract negotiations with the city begin. The past three elections have featured candidates from two competing factions within the union. The group currently in power is led by Herman "Pete" Matthews and the challengers ticket is headed up by Evon Sutton, whose husband previously held the top leadership post.

The campaign has taken a particularly nasty turn in recent weeks. A union member is accusing the leadership of D.C. 33 of using union funds to campaign. The charge is being made by Ernest Garrett, a Water Department employee who has worked for the city for more than 10 years. He claims that thousands of dollars have been misused. An article in the Philadelphia Daily News has the details:

In his amended complaint, Garrett said that Matthews used a union-paid video, dated April 8, to deliver a "state of the union" message to nearly 10,000 members, as campaign material. In the video, a narrator stated that the information was background for contract negotiations.

Campaign workers for Matthews' slate have been passing out backpacks, key chains, water bottles and T-shirts, along with campaign literature to the members, according to the complaint.

Setting aside the legitimacy of the complaint, the ongoing strife within AFSCME DC 33 will absolutely have an impact on contract negotiations. Unions are stronger at the bargaining table when they are united. A divisive election right before negotiations has the potential to weaken the ability of the leadership, no matter who wins, to speak for all union members. That means that Michael Nutter and city negotiators could have the upper hand during contract talks.

City Council held hearings Tuesday on whether or not elected officials should be eligible for the Deferred Retirement Option Program (DROP).

Councilman Bill Green, chair of the labor and civil service committee, has authored a bill that would bar elected officials from applying for the program, although those who have already enrolled — Anna Verna, Frank DiCicco, Frank Rizzo, Marian Tasco — would be allowed to stay in the program, as would Joan Krajewski, who is already getting benefits after "retiring" for one day before her current term started.

DROP was designed to retain experienced employees, giving them an incentive to stay in their jobs for four more years rather than retiring; employees get a lump sum pension payment and accrue both pension and paycheck.

This is a no-brainer: elected officials don't belong in DROP. They aren’t “employees,” and don’t “retire” from their office; voters choose their retirement dates.

In previous debates about DROP, it has been estimated that the program costs taxpayers about $7 million. The cost of Council’s participation in the program is unknown. Obviously, we’d like to know, since it’s our money.

But we have two other beefs with issues that came up during these hearings: We question whether Council should be voting on issues that directly affect their own compensation. We’d like to see a taxpayer commission that has some kind of authority to rule on such issues.

Secondly, Councilwoman Krajewski sought the advice of the city Solicitor’s office before pulling her “retire for a day” stunt and they issued a letter giving it the okay. The details of that letter, though, have not been made public. Shouldn’t such details be open to scrutiny? One explanation we got was that council members consult the city solicitor’s office because that office represents council members in its capacity of legally representing the city. So, a council member who asks for a ruling from the solicitor’s office is, in effect, consulting his or her lawyer, and such communication is privileged. We’re only taxpayers, but this seems a bit convoluted to us. We elect people to represent us. Doesn’t it follow that the people they seek out to represent them also, by association, represent us? What do you think?

Yesterday, Michael Nutter announced that Mark Alan Hughes was his pick for director of sustainability. Hughes was Nutter's policy director during the mayoral campaign and is currently a senior fellow at the University of Pennsylvania. He is also a regular contributor to the Philadelphia Daily News. Hughes is charged with coordinating the administration's environmental initiatives.

Sandy Shea interviewed Hughes about his new position and you can read it by clicking here.

Facing declining revenues, Michael Nutter was forced to scale back tax cuts in his proposed budget. His financial team found another way to save money: leaving 85 empty positions in city departments unfilled. Finance Director Rob Dubow estimates that, starting in 2011, leaving these positions open will save the city approximately $7 million a year.

No one is getting laid off. All of these positions are currently empty and the city simply won't be hiring anyone new to fill vacancies in certain departments. Who is being impacted? Here is a list of the departments and the number of positions that will remain vacant:

City Planning - 6 positions
Commerce Department - 8 positions
Office of Fleet Management - 12 positions
Free Library of Philadelphia - 7 positions
Office of Technology - 13 positions
Law Department - 15 positions
Personnel Department - 9 positions
Department of Public Property - 15 positions

This policy is not a citywide hiring freeze. In fact, Nutter has authorized several departments to fill vacant positions. The most high profile is probably the ongoing push to hire more EMS workers for the Fire Department. Positions will also continue to be filled in the Police Department, Philadelphia Prison System, Recreation Department, Health Department, and L&I. These are the departments that were chosen as priorities by Mayor Nutter and City Council.

Looking at the list, it's clear that Nutter has decided to continue filling positions in departments that directly serve the public. With the exception of the Free Library of Philadelphia, all of the departments facing hiring freezes are probably unfamiliar to most city residents. There has been an ongoing push to hire more employees to staff city health centers, but I haven't encountered a single individual or organization fighting for more people to work at Fleet Management.

Last week, acting personnel director Tanya Smith resigned amid accusations that she altered the results of a civil-service test to help a friend. Changing the results of a exam isn't as sexy as stealing money or selling influence, but it undermines the fairness of hiring across all of city government. In many ways, civil-service regulations are the only barrier between ethical practices and complete patronage.

I spoke with Celia O'Leary, who replaced Smith as acting personnel director, about the civil-service exams. According to her, the tests are supposed to protect jobs in government agencies from patronage or favoritism. "That's the goal of the merit system," said O'Leary. "To eliminate bias coming from politics or just favoritism from ordinary human beings."

O'Leary explained that the individual tests can vary widely based on the job type. Some entry level positions require only a multiple choice examination. Other jobs, such as police officers, require a battery of physical, psychological, and written tests. The purpose of the test is to provide an objective assessment of an applicants ability to preform in the position.

Civil-service tests have literally been around in one form or another for thousands of years. The first known use of a standard test to measure aptitude for government employment was in China during the Sui Dynasty in 206 BC. The tests were extremely complicated and many prospective civil servants spent a great deal of money on tutors to ace the exams.

The modern civil-service examination process emerged in the United States as a result of the reform movement in the early 1900s. Until then, employees of the federal government were routinely fired based on their political affiliation. Workers were expected to participate in partisan campaigns or face repercussions. Reforms aimed to ensure basic competency and to protect employees from being unfairly fired.

Despite the recent scandal, O'Leary believes the civil-service test provides a basic standard for employment and ensures fairness for potential hires. "No test is perfect. But if you don't have them, it just falls on the judgment of city managers. How else can you figure out who is the best for the job?"

Walter Olson, a fellow at the Manhattan Institute who has studied civil-service tests, says that the effectiveness of regulations is partially dependent on the political culture of the municipality.

"Some places can sustain a civil-service system that works as intended and some cities turn it into a horror story," said Olson. "Where there is a political culture that works-- two political parties, voters who are paying attention, a press that is paying attention-- you see the system working. If you see a system dominated by insiders, the civil-service rules will often fail."

Ironically, Olson says that Smith's departure might mean that the civil-service system works in Philadelphia. "If there is enough scrutiny that someone can get fired for abusing the system, then you know it's not completely broken."

The buzz around the local blogosphere (ie two of the sites I read regularly) is that a couple of guys who, like most of us, grew frustrated with with SEPTA's website and its inability to offer clear, coherent, well-planned trips, came up with their own.

And they made it available for mobile devices, which you are more likely to be using when you are out and about and looking for a way to get from point A to point B.

Philebrity's Technologicology column has an interview with the creators and a detailed explanations about how their creation makes SEPTA suck just a little less.

So in essence, these guys created something for all of us and for SEPTA that would have taken tens, if not hundreds, of thousands of dollars for the transit agency to do and most likely, do poorly.

Technologicology columnist Brian James Kirk sums it up with the most important question: "Could a public utility ever be this organized on their own?"

If so, why don't they? If not, what hope do we have for any kind of customer service from PGW, the School District, SEPTA or the city?

So loyal readers - all ten of you - can you think of any other volunteer efforts like this that folks have undertaken to improve our connection with our government or our public utilities?

I can think of one off the top of my head: Hallwatch.org's Property Tax Info search, which preceded the BRT's own efforts at putting that info on-line.

Even if someone could come up with a clear, coherent, step-by-step set of instructions for, say, how to turn your house into a rental property, that would be helpful.

Your comments and suggestions are welcome.

On Tuesday, Mayor Michael Nutter and Police Commissioner Charles Ramsey announced that four police officers would be fired and four others would be disciplined for their role in a much publicized beating of three individuals. The confrontation, which took place two weeks ago, was captured on tape by a Fox 29 helicopter and received national news coverage. The story made me wonder: how much has police brutality cost the taxpayers of Philadelphia?

There is a high financial cost associated with police misconduct. According to records kept by the Law Department, the City of Philadelphia has paid $14.4 million over the past five years to individuals who have been mistreated by police officers. There are five categories of misconduct: shootings, assault, civil rights claims, excessive force, and false arrest.

Which type of behavior is the most costly? Surprisingly, it's not mistaken shooting of civilian by police officers. The most expensive category, at least for the last five years, has actually been assault. There have been 219 claims of wrongful assault against members of the police department and 92 have been settled for $5.81 million. The second most costly mistake is wrongful arrests, with 63 cases settled for a cost of $3.37 million. There have been 11 wrongful shootings by police that have resulted in payments of $2.6 million.

Of course, there are other social costs associated with police brutality that are impossible to give a price tag. How many witnesses will refuse to come forward because they mistrust the Philadelphia Police Department? How badly are community-police relations strained by well-publicized incidents of police brutality? Paying individuals who have been victims of police brutality does nothing to the larger wounds inflicted upon communities by the misconduct of law enforcement officials.

Which do you think is worse? The social costs of police misconduct or the price tag associated with this behavior?

From the Philadelphia Daily News:

FOR MANY parents in the workforce, particularly those raising children on their own, the cost of quality child care can be out of reach - and high-quality child care, which is part of early-childhood education, is even pricier. According to a report from Public Citizens for Children and Youth, the average cost of such care for two children was more than $19,000 in 2007.

Elected officials in Harrisburg should support this worthy program. *

Last week, Philadelphia City Council passed Mayor Michael Nutter's first budget. The $4 billion plan was clearly impacted by the poor condition of the economy. In particular, Nutter was forced to scale back his proposed cuts in both the Wage Tax and the Business Privilege Tax to avoid cuts in other areas.

Now, the center of budget gravity has shifted to Harrisburg where lawmakers are considering Gov. Rendell's $28.3 billion budget proposal. Unlike Nutter's trimmed down budget, Gov. Rendell has offered a spending plan with expensive new items in a number of areas. Rendell's priorities include expanding healthcare access, repairing crumbling roadways, and investing in environmental technology to make Pennsylvania produce more green energy. His plan would also significantly boost funding for public schools across the commonwealth. Rendell's style stands in stark contrast to the lean municipal budget signed into law by Mayor Nutter.

Rendell's most controversial and far-reaching proposal is to lease the Pennsylvania Turnpike to a Spanish company for $12.8 billion. The deal would last 75 years and is projected raise about $1.1 billion per year through investing money from the sale into stock market. Those dollars will be used for mass transit and roadway repairs. Republicans have criticized the proposal for having overly optimistic projections of how much money can be yielded through investments. Rendell's other option-- putting tolls on I-80-- is even less popular in the legislature.

PA Access to Basic Care or PA ABC is another signature item for Rendell's budget. Currently, there are 767,000 uninsured adults in Pennsylvania. Rendell wants to provide grants to small businesses to help subsidize the cost of providing insurance to employees. Rendell plans to pay for this proposal through a combination of state and federal funds. He also wants to increase taxes on cigarettes, cigars, and smokeless tobacco.

Another big initiative in Rendell's budget is an energy independence fund to help establish alternative energy businesses in Pennsylvania. The proposal-- which would cost $850 million and be paid for by a surcharge on electricity usage-- is intended to diversify Pennsylvania's energy portfolio and encourage the development of environmentally friendly technology. Rising energy costs will encourage the development of alternative energy sources and Rendell hopes that Pennsylvania will be poised to take advantage of that demand.

Rendell and Nutter are both dealing with the same local economic conditions, so why is Rendell's plan so much more ambitious? Part of the reason is timing. Traditionally, the first budget from any mayor is forced to balance the priorities of the previous administration. Nutter is much more likely to offer sweeping proposals in next year's budget, when his administration has been up and running for a full year. Another piece of the puzzle is that Rendell will be leaving office shortly. This budget is full of items that he'd like to consider part of his legacy.

Finally, Rendell will have to deal with something that Nutter did not: strong opposition to many of his proposals. Republicans in the PA Senate are likely to be a major headache and have already indicated they will block many of the proposals. Rendell might be offering a ton of new spending and programs on the theory that Republicans will not be able to block everything. Unlike Nutter, he'll be forced to make a lot of compromises with a legislative branch eager to provide checks and balances. In
contrast, Philadelphia City Council was a lot less obstructive of Nutter's budget.

How about when you're talking about $30 million?

It took only a little more missing money than that to usher in the Democratic reform movement of the late 1940s and to send at least one Republican city official to suicide:

After the 1947 election, the Philadelphia City Council appointed a Citizens Committee of Fifteen to find revenue sources to fund a wage increase promised to city employees by Mayor Samuels during the campaign. The committee uncovered serious problems with the city’s finances, prompted by spectacular revelations. On May 22, Robert C. Foss, chief of the Amusement Tax Division in the Office of Receiver of Taxes, hanged himself. He left behind a note, confessing to embezzlement and accusing seven others of similar illegal activity. Later that month, it was reported that the committee had learned that Michael Viola, an aide to the director of supplies and purchases, Charles Grakelow, had embezzled approximately $15,000. The Viola revelations led to the resignation of Grakelow. He would later be indicted for forgery, embezzlement, and falsification of city records. In October, a grand jury charged Fire Marshall George Gallagher and John Judge, the mayor’s licensing clerk, with collecting license fees for the installation of oil burners without legal authority and in areas specifically exempted from such fees. The following January, the grand jury recommended the prosecution of Gallagher and seven assistants for 380 separate cases of extortion. Related investigations revealed more instances of corruption. City Water Bureau employee Thomas Mundell had taken nearly $3,000 in bribes for ignoring the broken water meters of large industrial customers. Chief Magistrate John O’Malley was charged with 644 counts of illegally reducing the fines and jail terms of convicted gamblers. Overall, nearly $40 million in city spending was unaccounted for.

By all means, Mayor Nutter, audit NTI. I, for one, don't care whether you're happy, sad or indifferent to what such an audit means for the Street legacy. I just want to know what happened to our $30 million.

Now that City Council has approved Michael Nutter's first budget proposal, the next big item on the agenda is negotiating new contracts for city workers. It's Our Money took a look at past contracts and published an analysis in today's Philadelphia Daily News.

Contracts for city workers are incredibly important and have huge implications for how our tax dollars are spent. Nutter will have to negotiate contracts with more than 20,000 city workers from four different city unions. Wages and benefits for city employees amount for $2.3 billion or 60% of the total city budget.

We'll have a link to the Daily News piece shortly, but in the meantime, we wanted to provide readers with the full contracts for both AFSCME DC 33 and AFSCME DC 47. Click on either of those links to download a PDF of the last memoradoum of agreement between the two unions and the city.