The road ahead

January 4, 2009

Philadelphia Inquirer

 

Leaders from inside and outside city government offer Mayor Nutter their ideas on getting Philadelphia's finances on track. 

 

Brett Mandel is executive director of Philadelphia Forward

 

This is no time for tinkering at the margins of the budget. It is time for a wholesale reconsideration of the budget's assumptions.

 

We should be asking not whether agencies can reduce costs, but whether the agencies should exist. Does the city really need a Mayor's Office of Community Services?

 

We should be determining not whether we can trim subsidies for non-city entities, but whether the city should offer such subsidies at all. Why should the city return the Philadelphia Gas Works' $18 million dividend each year?

 

We should be wondering not if independently elected officials can reduce spending, but whether we need all these officials. Would the city be better served by a professional department of elections instead of the politicized Office of City Commissioners?

 

And we should be looking not at whether we can cut the number of cars for city employees, but whether the city should provide any cars to employees.

 

A "zero-based" budgeting approach is more difficult, because it forces city leaders to question everything the city does. But, as times are bad and getting worse, it is clear that we cannot just trim our way out of our budget woes. We must fundamentally reconsider how we spend and how we invest in our future.

 

Zack Stalberg is a longtime political observer offering views independent of the Committee of Seventy

I would suggest that Mayor Nutter:

 

Revise his current budget-trimming plan because of the apparent lack of public support, and because it will not fundamentally change the government's financial condition.

 

Develop a five-year plan that not only addresses a revenue shortfall that is bound to get much worse, but also includes visionary steps to make the city a far more attractive place for business. That probably means tax reductions and a City Hall unmatched in its willingness to befriend prospective employers.

 

Open negotiations now with city unions, and use the new economic reality to win major changes in the taxpayer-funded portion of the benefits package for city employees.

 

Cut the size of his own staff, and fight to make sure that other elected city officials make sizable cuts in their operations.

 

Do it all transparently and without worrying about reelection.

 

Al Schmidt is executive director of the Philadelphia Republican City Committee

The financial crisis presents a unique opportunity to confront the unsupportable rate of increase in health-care costs for municipal employees.

 

The problem has its origin in the unusual way the city provides health-care benefits to full-time employees: It negotiates a flat amount per employee with each of the four municipal labor unions, and then turns over a lump sum for each union to administer. Any savings the labor unions achieve, they keep, rather than returning the savings to the city treasury or taxpayers. No other city or state in our nation does this - for good reason. The result is that the city has no control over health spending and can't take cost-saving measures that have been put in place elsewhere.

 

According to a recent report commissioned by the Pew Charitable Trusts and the Economy League of Greater Philadelphia, Philadelphia pays $13,030 per employee per year for health care. The public-sector average is $9,082. If costs were brought in line with that average, the city could save more than $110 million a year - which exceeds the estimated 2009 budget gap.

 

In the forthcoming contract negotiations, the city should enter into a joint labor-management arrangement that would bundle the four plans under a single administrative umbrella, lowering overhead costs and making it far easier to bargain with health-care providers.

 

Meryl Levitz is president and CEO of the Greater Philadelphia Tourism Marketing Corp.

 

City Council and the mayor recently passed a 1.2 percent increase in the city's hospitality promotion tax. This will add only about $2 to the nightly cost of a hotel room, but it will generate about $7 million annually to promote the city and generate revenue.

 

The revenue generated by leisure, business and convention visits is immediate, continuous, significant and measurable. Last year, 30 million visitors - 12.6 million of whom stayed overnight - kept 88,000 people employed, brought $25 million a day into the economy, and generated $1.3 billion in taxes.

 

Times like these demand partnerships such as the (21/2-years-in-the-making) one it took to craft this initiative. We need to come together around challenges, and the city can be the convener.

 

In addition, each one of us has the power to generate city revenue. As we did after 9/11, when our city had the most effective hospitality-industry recovery in the nation, we can each call a hotel and get a room. And we can invite our friends and family to do so, too. Hotel nights are the economic key, because they encourage and enable "doing the town," generating jobs, taxes and spending throughout our region. Perhaps the city can form a "Do the Town" partnership to lead the way.

 

Laurada Byers heads the Russell Byers Charter School in Center City

 

At his inauguration, Mayor Nutter announced two ambitious education goals: a 50 percent reduction in the high school dropout rate, and a doubling of the number of city residents earning college degrees.

 

To reach those goals, the mayor should encourage more innovation in our local schools. The city is already doing this through charter schools. When the first of these schools opened here in the late 1990s, it was considered a radical experiment. Today, with a few obvious exceptions, that experiment is paying off handsomely.

 

More than 30,000 students now attend 63 charter schools in Philadelphia. The majority of these children want to be in school and are excited to learn - exactly the type of citizens a great city needs. Compared with public schools, charter schools have higher test scores, a lower incidence of violence, and a superior high school graduation rate.

 

An investment in education now - particularly the continued support of charter schools - will pay dividends over the coming decades. These include a more educated workforce, lower crime rate, decreased poverty, and fewer parents fleeing the city to get a good education for their children.

 

Today's economic climate doesn't lend itself to the creation of sweeping new education programs. Reaching the mayor's goals will require great energy and fresh ideas - things at which our city's charter schools already excel.

Bill Green is a Philadelphia city councilman at large.

 

A serious commitment to "paperless government" could save the city tens of millions of dollars per year, freeing up additional resources to support key services.

 

Because every dollar spent on paper can be linked to $13 to $31 in secondary costs (storage, printing, postage), the savings from reducing paper use are amplified many times over. More broadly, paperless government would let city employees shift their focus from pushing paperwork to serving citizens, resulting in better use of city resources, fewer mistakes, and faster services. The Pension Board has halved its application processing time, increased counseling-session efficiency, and significantly reduced its staffing needs by using imaging technology.

 

A paperless government also could enable citizens and employees to conduct most city business online, speeding service delivery; provide self-service information kiosks, similar to ATMs, throughout the city; and equip employees working in the field with handheld PDAs, increasing productivity and data collection.

In the private sector, companies have to make 2 percent to 4 percent productivity gains per year to maintain their competitiveness. We should hold ourselves to the same standard.

 

Judith M. von Seldeneck is CEO of Diversified Search Ray & Berndtson

 

I would encourage Mayor Nutter to focus on innovative ways to increase the city's revenue stream.

For example, bring together local developers and corporate, business and community leaders to take an in-depth look at available office-rental inventories or other unused space. Pick certain cities, such as New York, and determine when office leases are expiring for small to medium companies, nonprofit organizations, and colleges. Then put together a group made up of business, city and political leaders to call on these organizations with a tailor-made proposal to relocate to Philadelphia.

 

I would offer terms they couldn't possibly turn down, such as free or greatly reduced rent, as well as other benefits, such as access to the mayor and his administration, the Chamber of Commerce, and community leaders to help them assimilate into the community. Important family-relocation issues would be addressed via other specialized teams.

 

You can only cut so much, and then you have to start thinking about how to increase revenues. This city has more than its share of bright, creative, energetic leaders who would gladly step up to the challenge. This would generate more taxes and vibrancy in the city and get national attention if it succeeds.

 

W. Wilson Goode Jr. is a Philadelphia city councilman

 

Government must not be focused strictly on budget cuts during periods of crisis. We must focus on strategic investments for future economic growth.

 

In 2002, my expansion of the Job Creation Tax Credit program created a local business-tax credit for investing in economic growth in a fair, transparent, objective manner. The legislation established a pilot program patterned after the state job-creation tax credit, which offered businesses that create new jobs a $1,000-per-new-job credit against business-tax liability.

 

The program is poised to create more than 3,000 jobs within Philadelphia, in addition to the benefits that will come from the eventual elimination of the gross-receipts tax.

 

This year, I will propose a "New Philadelphia Job Creation Tax Credit," patterned after an economic-stimulus proposal by President-elect Barack Obama.

 

 

 

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