Just Plain Philliness!

Massive problems foreseen for Phila.
A study says the next mayor will face a morass of fiscal difficulties.
By Marcia Gelbart
Inquirer Staff Writer

There are a lot of perks to look forward to in becoming mayor of the nation's fifth-largest city - but confronting a city budget that is like a financial minefield isn't one of them.

"What have I gotten myself into?" are the words Philadelphia's next mayor will likely be sputtering after surveying the fiscal landscape, or so says a report issued yesterday by the state agency that oversees the city's finances.

According to the Pennsylvania Intergovernmental Cooperation Authority, the next mayor faces:

Skyrocketing employee benefits and debt-service costs, which are projected to grow by more than 25 percent in the next three years.

A shrinking balance in the city's general fund, estimated to fall from $201 million now to $70 million by the end of fiscal 2009.

Pension costs that are expected in three years' time to eat up more than 12 percent ($466 million) of the city's budget; six years ago, those costs equaled less than 7 percent of the budget.

"We think these are all crucial issues for the next mayor to tackle, but they are not the issues that typically bubble up to the top in a mayoral campaign," said PICA executive director Rob Dubow, explaining the genesis of the report.

Hoping those issues don't get shelved, he said, the authority e-mailed copies of the report - titled "Look Before You Leap? The Fiscal Situation That Awaits the Next Mayor" - to the lone declared mayoral candidate, former City Councilman Michael A. Nutter, and to seven others who have said they are weighing candidacies.

Those seven are: former City Controller Jonathan Saidel; State Rep. Dwight Evans; State Sen. Anthony Williams; electricians' union leader John Dougherty; businessman Tom Knox; and U.S. Reps. Chaka Fattah and Bob Brady. (The TrekMedic notes that they're all Democrats!)

Whoever next occupies the mayor's office, there will be a short time frame to get a lot done. Within three months, a five-year spending plan must be developed, and by the end of six months, contracts with the city's four major unions are set to expire.

The authority's report - which also highlights how health-care insurance costs for city employees are expected to jump 26 percent between now and the next mayor's first year - offers a road map of sorts, with some potential solutions.

"In many cases addressing these issues may require unpopular short-term sacrifices," the report states - such as refraining from issuing bonds to build a new project, like a stadium, or to launch a new program, like Mayor Street's Neighborhood Transformation Initiative. Rather, the report suggests that new debt should be incurred only to help keep the city's core infrastructure intact.

"The longer the issues remain unaddressed, the greater is the likelihood that they will push the city back into a fiscal crisis," the authority wrote.

Late yesterday afternoon, several of the potential candidates said they had not received or had not yet read the report.

At least one, though, didn't seem daunted by the findings.

"Some of what they lay out is sobering," Fattah said. "But I think the city has an extraordinary future in front of it, not withstanding the fiscal challenges."

Nutter said, "If I thought it was easy, I probably wouldn't be interested in serving as mayor."

Quoting from the report, Evans said he, too, was all too familiar with the funding issues. "This is not new to me," he said, adding that in July he asked Gov. Rendell to approve giving $200 million to the cash-strapped Philadelphia Gas Works. In its report, PICA warns of a PGW financial collapse.

"The history of PICA is they are supposed to paint a worst-case scenario," said Saidel, who hadn't yet seen the report. "An effective leader looks at those numbers and makes sure that future doesn't come to pass."

Brady, as did Knox, also said he had not received the report but would find a copy and read it. "A lot of chickens come home to roost after this mayor, I know that," Brady said.

On the Web

To read PICA's report on financial challenges facing Philadelphia's next mayor, go to www.picapa.org.

The TrekMedic muses:

Remind again,..why can't the Republicans gain any ground in this city??