WEEKLYPRESS.COM · UCREVIEW.COM · AUGUST 08· 2012 3


OP-ED: PICA: Reject City’s Spending Plan


By Brett Mandel L


ast week, Mayor Nutter sub- mitted the City’s plan to raise and spend public money for the coming five years to Philadel- phia’s state-established financial- oversight agency for review and approval. This is how it has been ever since Philadelphia flirted with bankruptcy two decades ago. But, this year, the Pennsylva- nia Intergovernmental Coopera- tion Authority (PICA) must reject the Plan for the first time ever, and return it to the Mayor for revision because this Five-Year Financial Plan just does not add up. The Five-Year Plan submitted to PICA is not balanced. It fails to account for the expenses of the contract awarded to City firefight- ers by an arbitration panel, makes no provision for the costs of future


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contracts with the City’s union- ized workforce, and counts on nearly $50 million in savings from “Anticipated Workforce Savings” that may never be realized. Those additional expenses would plunge the Plan into a red sea that even Moses couldn’t part. Under state law, PICA has the


power to review and approve the City’s Five-Year Plan and, given Philadelphia’s troubled fiscal his- tory, it is an incredibly important function. Prior to the creation of PICA, City budgets were often bal- anced only on paper, the product of imaginative financial wizardry that made the City seem solvent even as it struggled to pay its bills. Ever since, PICA has nudged and pushed City number crunchers to provide legitimate budgeting to show that the City will remain solvent, not only through the cur- rent year, but for five years into the future. In reviewing the City’s Five-


Year Plan, PICA must ensure that projections of revenues and expenditures are based on reason- able and appropriate assumptions that will allow the City to operate


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