City Council Payback Is A Switch

Budgetwatchers were intrigued by media reports that City Council was balking at the Mayor’s request to move money around in the city budget.  Philadelphia has a “strong-mayor” form of government and that usually means that the Mayor gets his way when it comes to the city budget.  The rules of the game have certainly not changed, but with the end of the John Street mayoralty only weeks away, the power of the players certainly has been altered. 

The Mayor has apparently asked City Council to increase funding for the Department of Human Services by $34 million to increase money for a variety of programs to address youth violence and related efforts.  Questioning the wisdom of the increased spending and its effect on future budgets, no member of City Council has stepped forward to introduce legislation to make this happen.  This is all playing by the rules.

When it comes to the rules of budgeting in Philadelphia, our “strong-mayor” form of government gives the Mayor much of the power to decide how and how much to spend.   It is the Mayor who proposes the city's spending priorities in outlining a proposed budget that he submits to City Council.  Perhaps more important, the Mayor, and the Mayor alone, has the power to establish the estimate of how much revenue the city will generate for the year.  City Council is not permitted to authorize any spending beyond the amount the Mayor estimates for the year. The buck starts with the Mayor -- and he, alone, tells how many bucks we can talk about.
After the Mayor starts the budget process by establishing how much money can be spent and proposing his plan to spend that money, the rules say that it is City Council's job to actually approve or change the Mayor's spending plan.  City Council sets money aside for each agency of the government and then, for each agency, money is set aside for various categories including personnel, materials and supplies, and contracts for services, etc.  By budgeting in "lump sums," City Council can tell the Mayor how much money should be spent, for example, purchasing supplies for the Fire Department. 

However, once the budget is passed, the rules shift the power back to the Mayor and it is up to the Mayor to actually determine how the lump sums appropriated by City Council will actually be spent — for example, when it comes to the supplies for the Fire Department, how much for hoses and how much for axes.  In fact, the Mayor is under no obligation to actually spend the money City Council sets aside in the budget for any particular function.

During the budget year, if the Mayor wants to spend more than City Council has appropriated for any effort, the rules say he has to come back to Council.  After the budget has been passed into law, changes can still be made to the budget in the form of what is essentially an amendment to the budget law that must be passed by City Council and signed into law by the Mayor, called a transfer ordinance.  Money can be transferred from agency to agency (from the Police Department to the Fire Department) or from lump sum to lump sum within agencies (from Police Personnel to Police Materials and Supplies).  Money can even be transferred from budget to budget (from the Grants Revenue Fund to the General Fund).  The budget is routinely changed at the margins during the year and — occasionally — significant changes to the budgeted priorities can be made after the budget is enacted into law.

In recent years, the Mayor has routinely told City Council that it would be impossible to find money to fund the priorities of City Council during the budget process, only to come to City Council later in the year with news that it was suddenly possible to find money to fund new Mayoral pet projects.  Then, using his charm, and some of the power of a strong mayor, he has been able to have City Council pass a transfer ordinance to get his way — year after year — playing the same bait-and-switch game.  Each year, the Council would be told that the city cannot afford more money for libraries, police, or tax reform.  Then, just months later, the Mayor would “find” money for whatever spending whim struck his fancy and City Council would (after some behind-the-scenes politicking) pass the transfer ordinance to fund the Mayor’s initiatives.

But with the countdown to the Street Administration numbering the days in only two digits, City Council is suddenly emboldened.  In this case, payback is a switch. 

Council members are unwilling to introduce the necessary transfer ordinance and are looking forward to a conversation with the next Mayor about his, and their own, spending priorities.  Hopefully, that discussion will be an honest one that will respect the powers of the Mayor and the powers of City Council — and the right of everyone involved in the process to make decisions based on an honest assessment of the city’s finances.