Finding your fiscal fit
May 10, 2009
Steve Wray, Philadelphia Inquirer
Guest commentary
Steve Wray is executive director of the Economy Leagueof Greater Philadelphia
As we have all seen during this economic crisis, things like Philadelphia's finances, which once seemed far removed from elements of everyday life like getting the car inspected and putting the trash out on the right day, have broken out of the attic and are demanding a place at the dinner table.
With those budget and tax questions front and center, we should use this challenge to think critically about our values and be sure that government is making choices that conform with those values.
Like you, we've been examining next fiscal year's proposals and counterproposals, watching the hearings, and reading the headlines to evaluate what road would be best for the city. It has not been a simple task; everything from global flu viruses to Harrisburg politics can shift the ground underneath us.
Nonetheless, here's a tool to help you wade through the plans presented by Mayor Nutter's administration and by City Council to gauge how they fit with what's important to you. We focused only on those of largest potential impact. (To dive into greater detail, take our online Philadelphia Budget Challenge at www.EconomyLeague.org/budget) And, as noted, items such as altering the sales tax would depend on commonwealth approval.
A few points to keep in mind:
Unlike the federal government, the city budget must be balanced, and not just for the coming year. The city must have a five-year balanced budget approved by PICA - the state agency mandated to oversee city finances. In the proposed budget, the mayor sets the revenue estimate, which rests on certain assumptions about the future. Philadelphia's revenue comes from a variety of sources, including local taxes, fees and fines, and transfers from the state and federal government. Many factors affect how much money is collected from each source, and only some can be controlled directly by the choices made by the mayor and City Council. Council may make amendments, but cannot change the mayor's total revenue estimate. And such items as debt service and pension-fund contributions cannot be altered.
The table below represents what is known today. Council has hired consultants to assist with its budget counterproposal, so new numbers could emerge. Revenue estimates are just that - estimates, based on the best information available at the time.
While it does at times seem overwhelming, we can take this economic crisis as an opportunity to rethink how we do things in city government and in Philadelphia. As citizens, we can stay informed, participate in the process, and keep one eye on the horizon lest we lose sight of what this is all about: the future.
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