We Told You So...City Finds New Money In Budget

Philadelphia Forward has often described how the city administration has (in each of recent years) systematically underbudgeted tax revenues, declared that the city could not afford more spending or tax reform, and then after the budget was complete, suddenly "found" higher-than-budgeted revenues to pay for the administration's pet programs.  But all this new spending happens without meaningful public debate.

As detailed in the Philadelphia Inquirer, the city's state-appointed fiscal oversight board had raised concerns that iffy assumptions would lead to a projected deficit of more than $100 million in the city's Five-Year Plan to raise and spend public money.  Well guess what?  The same city administration that -- just a month ago -- said it could not afford $16 million in the next five years for desperately needed tax reform, found a way to unhide $100 million. 

The Inquirer reports, "City budget officials mollified the board by adjusting some of the projected revenues and expenses in the five-year spending plan, which is cumulatively worth $18.2 billion.  The adjustments include $50 million in increased revenue the city says it expects from taxes over the next five years. The change is largely a result of rapid growth in Philadelphia's real estate transfer tax, which is assessed on real estate sales. The final figure for fiscal 2005, which ended June 30, was $195 million - $30 million higher than the projected 2005 total, and $124 million higher than the fiscal 2001 total."

Followers of Philadelphia Forward's missives cannot be shocked as we predicted this outcome all along.  We are not alone in being upset about what essentially amounts to a fraud perpetrated against the public.

The Inquirer  reports that, "At the meeting yesterday, PICA board member Gregg R. Melinson suggested the board press the case for new tax cuts, which Street has vociferously opposed. 'I'm something so far away from glad about the way the city has dealt with tax reform,' he said. (Full Article)

The Philadelphia Inquirer reacted with a harsh editorial repeating the call for tax reform and chided the Mayor for using his budgetary dishonesty to hoodwink City Council.  Outgoing PICA Executive Director was even more caustic. 

Street used the specter of budget deficits and even more draconian service cuts to scare City Council into believing even a modest five-year reduction in the city's regressive business privilege tax was too much.


Not all Council members took the bait, but enough to make sure the tax cut proposed by Councilman Michael Nutter could not withstand a mayoral veto.

Joseph Vignola, who plans to step down as executive director of PICA next month, says Street has "played Council members for fools." He says he will recommend Council approve the business tax cuts proposed by Nutter, which would cost the city $16 million over five years. Vignola said he will recommend that $3 million in interest savings and $1 million in unexpended expenses be put toward funding the cuts.  (Full Editorial )

As we continue to build our constituency for change and continue our conversation to develop a Citizens' Issues Platform, we must demand that our government deal truthfully with the citizenry and that the decisions made to raise and spend PUBLIC money occur as part of an honest PUBLIC process.  Visit the Philadelphia Forward Forum to join in the discussion about what we want from our city and what we expect from our city officials.