Problems and proposed solutions here are a microcosm of those on the national level
While I was overseas in Poland last month, reading about America’s founding and founders, I kept chuckling every time John Adams, Thomas Jefferson, George Washington, John Jay or anyone else commented on the summertime heat in Philadelphia. As a guy who needs to take a couple of inches off my waistline, I cannot even imagine what it must have been like wearing a broadcloth suit and being packed into Independence Hall with a bunch of men who, during a summer in the City of Brotherly Love, must have been as smelly as they were brilliant.
Now, while I cannot provide any insight as to how Philadelphia Mayor Michael Nutter smelled during his press conference today at City Hall, I’ve caught a whiff of his fiscal policy and priorities, and they stink.
It’s no doubt that the City of Nutterly Love faces a budget crisis, so much so that the mayor threatened yesterday to virtually shut down the court system in Philadelphia if the city does not obtain approval from the Commonwealth of Pennsylvania to increase the sales tax from seven to eight percent and drastically change the way pension payments are made, among other specifics completely halting payments in 2010 and 2011. In late July, he threatened to cut back on public safety–police and fire–and social services if the city’s demands were not met. Even today, a “Plan C” budget submitted by the mayor’s office (in case the demands are not met) called for 1,000 police officers to lose their jobs.
In the introduction to the Fiscal Year 2010 operating budget, the city lays out a series of ambitious goals, yet if anything destroys its own chances of attaining them.
For instance, the city aspires to add 75,000 new residents over the next five to ten years, “[m]ake Philadelphia . . . a leading center of innovation in educational, medical, research institutionsand sustainable technology, ” and “prepare . . . for the next wave of economic development” on the waterfront and at Philadelphia International Airport. Not to mention hopes of creating and retaining jobs. That certainly sounds nice. I’ve often said that Philly boasts the most unused waterfront of nearly any city. But the reality of the city’s fiscal plans doesn’t comport with its goals. Increasing the sales tax by one percent and property taxes by 12 to 16 mills would bring in revenue, yes, but would drive away the very people, businesses, institutions and organizations the mayor and city officials want to bring in. This city is hemorrhaging residents and businesses alike, and for good reason. Continuing the increase in cost of living and cost of doing business would do nothing but hasten their departure.
Next, the city ambitiously states that it would like to “increase high school graduation rate by 50% in 5-7 years” and “[a]ssure that all children are ready to learn by the time of school entry.” At the same time, however, the city plans to reduce staffing, materials and supplies in the Free Library system in order to save $4 million this year and $8 million yearly after that. Something there doesn’t compute. And that doesn’t even take into account the effect upon the lives of children in this city after the city closes half of its public pools.
And, by all means, let’s ensure that “Philadelphia becomes the safest large city in the country.” Let’s “increase the feeling of safety at home, in school, in the neighborhood, at work and at play.” Let’s even aspire to reduce the homicide rate by fifty percent over the next five years. That sounds great. I’ll have that. But at the same time, the city plans to freeze civilian police hiring, halt pension payments for two years and restructure the way that pensions are amortized over the next thirty, and eliminate the reserve dedicated to city-wide wage increases. Not to mention the repeated threats of cutting police and fire personnel and services. That doesn’t make any sense.
Just a cursory look at the general fund budget shows that mural arts in the Managing Director’s office has a $1 million budget. I see $2.3 million going to the Philadelphia Museum of Art, $198,000 to the Atwater Kent Museum, $12 million to the Fairmount Park Commission, $12.7 million for “personal services” for city council (I wonder if that includes free city vehicle use for people making in excess of $110,000 yearly), $47.7 million to fleet management ($4 million for the purchase of new vehicles), $500,000 for mayoral transportation (on top of the $4.3 million going to the mayor’s office), $3.9 million to the Office of Arts & Culture & The Creative Economy, $38 million to the Office of Supportive Housing, and $32 million to the Department of Recreation.
Oh yeah, and $215 million to service the mounting debt.
Of course, many of these services are necessary. After all, to bring people and business into the city, it must be an attractive destination. I’m just saying that it must be able to be done cheaper than it’s being done now. The mayor should go line-by-line through each department’s budget (the city’s budget merely lists “personal services” for each department) and ask “why?”
At the same time, however, he should be thinking about how best to attract new business to the city. Money spent on the burgeoning convention industry here is money well spent. Money spent on the historical and artistic aspects of this great city is also money well spent. But all of it needs to be managed better, and all of it needs to be paired up with measures taken to facilitate growth. Tax breaks, for example. Just like I believe our federal government should be looking for ways for the United States to become a haven for international business and investment instead of shutting down access to those havens overseas, Nutter should look for ways to make Philadelphia irresistible to business rather than acting to push it away.
Philadelphia needs to boost its revenue, and while temporarily hiking sales and property taxes might serve as a tolerable band-aid, it does nothing for the long term, and actually drives away long-term growth. That $215 million in obligations for debt service should be haunting Michael Nutter’s dreams. It’s up from $172 million in 2008 and $199 million in 2009. And, my goodness, think of what he could do with that $215 million. Pools could be kept open, libraries could be stocked, the police force could be augmented. Each of the aforementioned annual budget obligations could be covered, just by money otherwise earmarked for debt service alone. It reminds me of a passage from Glenn Beck’s Common Sense about our national debt, which has exploded under the later years of George W. Bush and the first few months of Barack Obama:
The interest on ONLY our current $11 Trillion debt runs about $26 billion per month or $300 billion per year. “That would fully fund the Departments of Commerce ($8.1 billion), Education ($68 Billion), Housing and Urban Development ($52.3 billion), Housing and Urban Development ($52.3 billion), Energy ($23.2 billion), Justice ($25 billion), and Labor ($49.6 billion) for an entire year.
By 2019, annual interest payments on the national debt will balloon to a projected $806 billion! That $806 billion is more than what it cost us last year to fund the entire Department of Defense ($583 billion), Veterans Affairs ($86.6 billion), the Department of Transportation ($68.7 billion), and the State Department ($18.9 billion)…combined.
See, generally, when I write about the problems facing Philadelphia, I tend to receive e-mails and comments from people across the country wondering why. They don’t live here, they remind me. They don’t work here, they say. And I understand it. But there’s a reason I do so, and what I saw from Michael Nutter today underscores how it isn’t just any one elected official, but rather an entire ideology. Look at Philadelphia, and think about who has been running it. The same goes for Cleveland, Detroit, Flint, and any number of cities floundering under unsustainable, anti-growth, pro-government fiscal policies.
At all levels, we need to get our priorities straight, do what’s hard, and make the necessary cuts and changes so as to make ends meet. But we must never give into temptation to satisfy short-term concerns at the expense of long-term growth. That’s what they’re doing in Philadelphia, and that’s part of the reason why my family will join the exodus from the area already in progress.