A City Spending Spree

While recent news has focused on the spending proposed by the Mayor in his budget for next year, the city has quietly gone on quite a spending spree in this year's budget.  Yes, that is the same budget that we fought about last year when the city administration said we could not afford tax reform and that we would have to make draconian cuts in service efforts.

Every year, after the budget is passed, the city is only able to reprioritize spending (shift it from one agency to another or move it for other uses within agencies) by passing a new "transfer" ordinance into law.  Like any other law, it requires City Council approval.  This year, the mid-year "transfer" ordinance calls for dramatic increases in spending in many city agencies:  $7.2 million to buy new vehicles, $4.4 million for increased spending at the Philadelphia Prisons, $3 million extra for Fire Department personnel -- a total of nearly $50 million in reprioritized spending. (See this legislation on the Philadelphia Forward website -- shamefully, the city does not post legislation on its website in a timely manner.)

So did the city suddenly hit the lottery?  No.  This money was simply reprogrammed.  About $6 million was simply shifted from one area to another area within individual agencies.  The rest -- more than $43.6 million -- all came from a move that took the power to spend money from the Department of Human Services and then divvied it up to various other agencies.  Essentially, we planned to spend the $43.6 million if we received money from the state to fund certain programs, but when the money never came, instead of simply adhering to the spending plan outlined in the budget, the city administration wants to take the authority to spend the money and move it to other places in the budget.

Because the city is not allowed to expand its revenue estimate during the year except under super-extreme circumstances, the city routinely plans to spend more than it will bring in and tucks that authority to spend money in various places in the city budget.  This way, if money comes in, we can spend it, but if money doesn't come in, we have some flexibility to move money around during the year.  Now the city can suddenly "afford" to increase spending significantly.  As an added bonus for the city administration, the public really doesn't pay much attention to these transfers so they get to quietly have their way after the public process to adopt the city budget is concluded. 

So all that fighting about what the city could or could not afford to do last year -- sound and fury signifying very little...the city finds ways to fund what it wants to and finds excuses to avoid what it does not want to fund.  Now you know.