The state board overseeing Philadelphia’s finances has approved the city’s budget and five-year financial plan. But Sam Katz, chairman of the Pennsylvania Intergovernmental Cooperation Authority, said he wants aggressive steps to solve the city’s long-term fiscal ills.
Katz said the city’s five-year plan is reasonable, so he wouldn’t vote to reject it. But he said there are troubling issues plaguing the city’s long-term finances, such as the underfunded pension system. There are now more retired city employees than active ones, and Katz said the fund is eating up huge chunks of the city’s tax revenue.
“When you think that $500 million a year in an operating budget of $3.6 billion goes to pay benefits for services rendered in the past, that’s a tough place for a city to be,” Katz said.
Katz said part of the solution will be directing future city workers into less costly retirement plans. Another part might be selling a city asset.
Reporters asked for an example.
“I would say airports,” Katz said. “You know, we need an airport, but it doesn’t necessarily have to be delivered by a municipality. In fact, for the most part, airline services are delivered by airlines. So you know, there are candidates. There are not a lot of candidates, but there are candidates.”
Selling the airport and the city-owned gas works have been proposed before, but those efforts lost steam in the face of legal, financial and political complications. Katz said he hopes a concerted effort by city leaders will yield some fruitful ideas.
The PICA staff did announce one piece of good news: Philadelphia will get about $9 million from the Wall Street firm JP Morgan, which reached a settlement with regulators on charges of bid rigging in connection with municipal bond deals.