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.
Comments (4)
I wouldn't exactly call what we got from the mayor and city council "lean." I imagine the budget's still funding a bunch of useless non-profits, and they definitely should've kept tax reductions before budgeting money for council members to hire more staff.
Also, I think your point about Nutter's lack of resistance from council misses the fact that Mayor Street put the city hundreds of millions of dollars in debt to fund his pet projects, in spite of this lack of resistance. I imagine Nutter didn't try to spend us into the ground because he has at least some level of fiscal responsibility but, as you said, we'll probably find out whether or not that's true when he shows us his next budget.
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