New PICA member sees big challenges and opportunities ahead for Philadelphia

Above-average unemployment and weak income indicators persist in Philadelphia.  That’s according to the Fitch rating service, which also notes the city’s school district has a bond rating of BB with a “outlook negative,” so Philadelphia’s finances not in great shape.  They’re monitored by the Pennsylvania Intergovernmental Cooperation Authority or PICA, and Gov. Tom Corbett has tapped Lawrence Tabas, a partner at the Philadelphia law firm Obermeyer, to serve out the two year term for the seat once held by former PICA Chairman Sam Katz.  NewsWorks Tonight Host Dave Heller spoke with Lawrence Tabas about the new role.”We are certainly in a very severe situation on two fronts as I see it,” said Tabas.  “One is the deep deficits…in the school district…and number two are the pension and retirement benefit costs and expenses that are legally contracted by the city that have to be paid over the years while at the same time continuing to pay for the services of people who are working now for the city of Philadelphia.”

On the matter of pension costs, Tabas says Philadelphia leaders have tough choices to make.  “The city is going to have to plan and budget and figure out ways of supporting and making those payments and/or developing alternatives for future employees so that those costs will not continue to spiral and literally end up putting the city insolvent.”

When it comes to schools, Tabas hopes his close ties with Republican leaders in Harrisburg will help obtain more funding for the district.  “I think there’s a perception issue that has to be worked on, and a lot of people outside the city of Philadelphia maybe consider it to be just a very costly municipality that just doesn’t seem to be able to get on its feet financially,” said Tabas.  “I think it’s important that the rest of the Commonwealth recognize that Philadelphia is a major asset to the Commonwealth, and that benefits all of us at so many different levels.  So I’m hoping that I’ll be able to bridge some of those perceptions.”