With Misgivings, State Overseers OK Philadelphia's Five-Year Budget
By Mike Dunn
PHILADELPHIA (CBS) -- The state agency that oversees Philadelphia's budget has approved Mayor Nutter's long-range spending plan, but not without voicing some serious reservations.
The PICA (Pennsylvania Intergovernmental Cooperation Authority) board today unanimously approved the mayor's five-year budget, but several issues still give board members cause for concern. Among them: the school's district shaky finances and their impact on the city, unresolved contracts with municipal workers, and the condition of the city pension fund.
PICA vice chairman Michael Karp believes the Nutter administration and City Council can handle those matters down the road.
"So we have potential challenges. Thank goodness we have a very well-informed administration and Council that, when they have to, they do their job," he told KYW Newsradio today.
Nevertheless, Karp told the mayor's finance director, Rob Dubow, that he'd like to see the city do more belt-tightening in order to start a rainy day fund, setting aside cash above and beyond the surplus (know as the "fund balance") so future recessions would not prove debilitating.
"As an overseer at PICA, we are saying it's still a reality that you're going to have a recession at some point. It's still a reality that things will not always go on that upward path. And you should set aside money for that inevitability," Karp said.
Dubow (at far end of table in photo) responded negatively to that idea, pointing out that over the past several years, "there's been a lot of belt-tightening." And he said further cuts would further impact city services.
Karp later told reporters he understood Dubow's -- and the mayor's -- stance:
"They have these labor contracts, they have the school district, and they have the PGW sale -- all things that are hanging out there. So I understand why they also want to wait another year before you can have a serious conversation on that."
PICA was created in 1991 as the state helped save Philadelphia from bankruptcy.
