The management board, which supervises the city’s budget in Philadelphia on Monday, approved the five -year financial plan of the mayor of Cherlle L. Parker after his employees expressed concerns about the growing debt on the financing of debts and the threat of President Donald Trump, which narrow funds for cities.
Pennsylvania’s intergovernmental cooperation office, which must approve the financial plan in Philadelphia each year, so that the city continues to receive about $ 1 billion of dollars controlled by the state, voted 4-0 for the green light of the plan. A member of the board Patrick Burns was absent.
PICA voting is the last step in the annual budgeting process in the city, which began in March, when Parker presented his tax proposals and expenses. After the introduction of narrow amendments, the City Council in June largely approved Parker’s plan for the financial year, which began on July 1.
“This plan reflects the city’s constant involvement in fiscal stability and responsible budgeting, even in the face of complex economic challenges,” said Pica Chairman Kevin Vaughan in a statement. “We praise the city’s leadership for making strategic investments in basic services, while building long -term retirement stability and resource resources for the purpose of weather in the future.”
Before voting to approve the plan, Pica Vice -President Alan C. Kessler applauded Parker’s administration for handling work contracts after an eight -day strike by the greatest workers’ union of the city, which ended with a fresh agreement largely in accordance with Parker’s goals.
»Read more: “They are my peoples”: the mayor of Cherielle Parker about why she stood strongly in DC 33 City Worker Strike
Rosalind W. Sutch, a treasurer of the board, pressed the city to make it more crystal clear in terms of expenditure forecasts for the main initiatives. Her comments repeated the fears of some members of the Council, who previously complained that Parker asks them to approve funds for enormous programs about narrow information. These include the “biological renewal ecosystem” for people struggling with drug addiction and its housing capabilities, which are uncomplicated or home, for which the Council in June allowed $ 800 million in the city’s debt.
Member of the board Michael A. Karp asked the finance director of the city of Roba Dubow for support of City Aid Septa, which is in the face of a sedate shortage and plans to radically reduce service in the coming months, if it does not provide much financing from Harrisburg.
»Read more: When the inhabitants of Philly and school are preparing for sept cuts and slow state funds, there is no rush to the budget in Harrisburg
Dubow said that the city has significantly increased the subsidy at Septa in recent years. He said that in the fresh budget year Philadelphia would send an $ 134 million transit agency.
“I want to thank Pica for a accurate and comprehensive review of the plan,” said Parker in a statement, “and recognition of the management board of the unwavering Parker administration involvement in fiscal stability.”
“Moving federal policies”
State legislation, which created PICA, charges the agency for assessing whether the city’s financial plans are based on “reasonable” assumptions regarding revenues, expenses and the economy.
Like almost always, PICA employees this year determined that the city applied reasonable assumptions in their plan. But he also presented potential traps that could derail the plan.
“Approval of this plan reflects confidence in the city’s leadership and fiscal planning – but this certainty must be in line with further discipline,” said Marisa Waxman, PICA executive director in a statement. “Philadelphia will have to navigate known challenges – from labor costs to economic uncertainty – while preparing to change federal policies and financing landscapes.”
The General Fund in Philadelphia, which is widely referred to as the city’s budget and is largely responsible for operating expenses, uses very petite federal funds. For example, the city budget in the amount of $ 6.8 billion, for example, on July 1, provides for only $ 61 million of federal assistance for the general fund.
But federal support is of key importance for other city funds. For example, it is expected that the Healthchoices Behavioral Health Revenue Fund will bring about $ 1.5 billion from Medicaid this year to a program ensuring mental health and abuse of substances to Philadelphians.
»Read more: How much can Philly lose if Trump limits funds to cities? Here’s what you need to know.
The Healthchoices fund is not one of the junior high schools that Pica is to supervise. But Waxman warned that the cuts of federal assistance in one part of the city’s budget could put pressure on advice and administration to make up for the difference by drawing from other countries.
“Federal funds, direct and donated by the community of nations, are a significant source of revenues for many city funds that are not covered by the PICA Act,” said the analysis of the five -year Parker plan in Pica.
Trump has not yet moved to limit the main financing streams intended for Philadelphia, as he tried in New York, Los Angeles and other cities. But Philly was on the Trump administration list of the so -called “cities of the Sanctuary”, which refuse to support federal enforcement of immigration law and can be directed to financing cuts. (The administration quickly canceled the list after discovering evident errors, but the White House swore to return to the problem).
»Read more: Mayor Philly Cherlle L. Parker is one of the democrats trying to coexist with Trump
Parker put $ 95 million in this year’s budget to cover potential cuts of federal assistance. However, the city receives about $ 2 billion in federal support in all funds.
Philly turns to a “strong” loan
Even before Parker got advice to approve her plan to spend $ 800 million in city bonds from this fall, Philadelphia became more and more dependent on debt.
PICA employees noticed that the capital budget, which includes debt financed by debt, such as infrastructure improvements, increased from $ 3 billion in 2016 to almost $ 5.5 billion last year and that it is becoming more and more dependent on support from Washington, a tendency in which the report said that “should be closely monitored in federal light financing priorities. ”
“The growing size of the capital program, considered” robust “by the Moody rating agency, should be monitored to make sure that it does not exert unbalanced pressure on the general fund,” said the report.
Ten years ago, only $ 264 million or 10%of the capital budget financing came from federal sources, compared to last year’s $ 1.1 billion, i.e. 18%, according to PICA analysis.
Pica past and present
The General Assembly of Pennsylvania created Pica in the early 1990s as part of the city’s rescue package, which was in the process of a deep financial crisis. Wall Street rating agencies have given the status of Philadelphia’s “junk bond”, leaving the city is not able to move in huge deficiencies and putting them on the verge of insolvency.
By using the state loan, Pica issued bonds that provided the necessary funds for the city’s budget and which will be repaid by the non -resident part of the tax on remuneration in Philadelphia. To make sure that the city has improved its financial practices, the PICA Act required from the city to write a five -year financial plan, which will be updated every year and approved by the double -sided PICA management, which includes four legislative and one governorate.
The city ended the repayment of these bonds in 2023, and the PICA Act originally called for the agency to be dissolved at the moment. But the city and state leaders valued the influence of PICA on the financial practices of the town hall, and the General Assembly in 2022 voted in favor of re -authorization until 2047.
Not everyone is a fan of PICA. Fiscal hawks sometimes claimed that the management is not aggressive enough Watchdog over the city budget, because it almost always approves five -year plans without controversy.
On the other hand, the spectrum of urban associations, including the American Federation of State, District District and Commune of Employees 33 – which began to strike at the beginning of this month to obtain higher increases – He has criticized Pico since its inceptionArguing that the management board allows the city to change employees in the name of fiscal prudence.
Parker’s five -year plan has put $ 550 million for additional costs from work contracts. The fresh three -year DC 33 contract during this period will augment $ 115 million, and a recently approved three -year contract for AFSCME DC 47, another relationship for municipal employees, will add $ 92 million.
The administration currently deals with the binding arbitration of interest in order to determine fresh contracts for police and firefighters.
