This week, Mayor Michael Nutter unveiled the 2008 City of Philadelphia budget, complete with risky new fiscal policies and some long needed funds.
The biggest revelation to come out of Nutter’s financial think tank was an announcement that the city would borrow $4.5 billion in order to relieve the burden of its pension payments to retired employees. This is a massive weight, but one that is best handled over time with gradual bond payments, avoiding a doomsday scenario where the city is suddenly bankrupted by its pension obligations.
In this budget proposal, virtually no city department would see a decrease in funding, and in fact some would actually see substantial bumps. The Philadelphia Police Department would see money to hire hundreds more officers, and EMS would get badly needed aid for ambulance coverage.
One of the biggest budget winners in the proposal is the Fairmount Park Commission, which will see a 40 percent increase in its funding over five years. This is a long overdue allocation of funds for one of the largest municipal park systems in the world. The FPC has had its budget locked at about $13 million for decades, meaning the park’s annual budget has actually decreased due to inflation. An increase to $19 million should only be the beginning of a plan to fund the park at the level that actually meets its maintenance demands, estimated by the FPC to be “about $50 million.”
The park is one of the city’s greatest assets, yet past administrations have strangled the department, leading to crumbling monuments, dilapidated park buildings, and overgrown trails. A beautified park betters the entire city and acts as a magnet for families, not to mention the neighborhoods immediately adjacent to its borders.
Nutter has also accommodated for the continual phase out of many of the city’s most hated taxes, such as the vilified wage tax. There are also millions of dollars in planned decreases for commercial taxes, as well as the elimination of the gross receipts tax, which levies a business’s total income – regardless of whether or not the business made a cent of profit.
Nutter demonstrated as a councilman that cutting taxes to a certain point actually generated money for the city by encouraging business and real estate transactions, a tradition continued in this new budget. Philadelphia has one of the highest tax rates of any major city in the country, a dubious distinction that we must shed to continue to be competitive. I would even encourage more specific tax cuts to small businesses in order to attract a more eclectic group of the small shops and boutiques that make a city special.
However, this budget will be cast aside if the city’s labor unions demand too much from a city government whose finances are balancing on a needle’s edge. Even a 1 percent demand in wage increases would throw the city $200 million over budget. The burden of putting the city back on a successful course must be born by the city worker during this fragile time for our metropolis.
Ryan Briggs can be reached at rwb@temple.edu.
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