- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
Can someone explain the "Contingency Budget?"
Submitted by D.E. II on Thu, 03/26/2009 - 9:13am.
I guess I'm just not paying enough attention - but I don't remember reading about this before:
In addition to the core disagreement of how to raise revenue to close the deficit, Council members' key criticisms of the administration's budget were:
It relies too heavily on the approval of state legislators, such as the proposed penny-per-dollar increase in the sales tax. "That's pretty shaky ground," Councilman Bill Green said.
It asks Council to approve a contingency budget - a cut-intensive alternative that would close some facilities - in the event the legislature does not assist the city. The contingency plan is short on some key details, leading Green to say Nutter is asking Council to write him a "blank check."
Did previous reports about the budget speak to this "contingency budget," or is Nutter actually trying to sneak this through under the cover of City Council?
Other Revenue Streams
There are many other alternative revenue streams that have been suggested in order to close the budget deficit such as travel freezes, paperless paychecks,etc. Also what about community courts and centralized IT/Strategic sourcing that will generate $10million.
PICA requires a budget plan if Harrisburg stalls
Nutter is asking for a 1% sales tax and permission to adjust the schedule we pay back the debt on the pension fund over a longer term. both require action by the state legislature. The pension fund adjustment probably is not an issue to get passed. The sales tax is. Nutter's budget will not be remotely close to balancing without both. He has to come with a what-if budget. Ideally its strictly hypothetical but you can argue it can be an indirect bargaining tool.
I think for Council making your priorities heard in the real budget is probably more important that fretting over the what-if budget, i.e. its not worth fretting over as some nefarious conspiracy, but it does give Nutter some bargaining power and even as a hypothetical its worth making it as bearable as possible if doomsday does happen.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.
The reason for the need of a contingency is explained
in the article, but the "facility-closing" that is contained in the contingency isn't. I don't remember Nutter saying that if the sales tax and pension fund adjustment didn't pass legal challenge, he would balance the budget by closing facilities. What facilities are specified as being on the hypothetical chopping block?
If it was announced previously, then there was no deception. If the "contingency" budget is, essentially, a way for Nutter to get Council to turn over their power re: closing facilities, it isn't a "nefarious conspiracy," but a highly deceptive maneuver.
I think Green is asking good questions
but its a bit of an exageration that if the city were not get the pension fund adjustments and the sales tax (or yes alternatively significant hikes some place else) that there would not be closings and large numbers of layoffs. The pension jiggering alone is more than a quarter of our budget deficit right there. We quibble about which taxes on the revenue side but the pension problem is a horrible albatross of previous bad decision making around the city's neck. Considering the sheer scale of the pension fund problem, I'm convinced that if more people actually understood what a malicious act of "let them eat cake" Council taking DROP and further depleting the fund actually is, they would be burning effigies of Verna and Tasco in the streets right now for their recent laughable comments.
Verna's comment that she heard it has no impact on the general fund is boggling from the President of Council at this late stage into a severe budget crisis. Dear Council Prez, if you take your retirement all at once when the investments the funds we have on hand are at their lowest, it dramatically multiplies the effect the tanked stock market has on the fund's health, forcing taxpayers to dump in much more money or see worse service cuts to cover those untimely withdrawals. If you lead by example and simply opt to take your retirement over time, every dollar you don't take out in a lump sum right now earns multiplying interest for the funds long term health over time - and you will still enjoy a nice retirement benefit - just in increments. The single biggest problem in the budget deficit is something that does nothing, right now, to improve safety or quality of life for Philadelphia citizens - i.e.making up for pension funds contributions City Council underfunded for decades. Council taking a DROP benefit never intended for them is like pouring gasoline on that forest fire. For council to plead ignorance at this late date could be an act jaw-dropping stupidity but I rather suspect its a great big middle finger of self-absorption to the people of Philadelphia. Basically "Yeah we are helping to bankrupt a pension fund we are responsible for more than three decades of underfunding in the first place but we are getting our slice now dammit, so screw you people after we are gone. Oh and by the way we are betting you are so stupid you are going to reelect us for one more time even after we do it." I find it a tad frustrating.
I agree there are lots of great spots to look for savings generally (lets start with row offices, prison costs for folks who could be doing community service, GPS anklets and/or drug treatment) but folks who think we can survive this without either drastic armageddon slashing or help from the state or no significant tax increases somewhere are smoking something prescription grade. Sadly there are lot of them still out there.
-Sean
MrLuigi, my cat, actually only types half as badly as I do.