This PhillyStat session was developed to answer these questions and to begin the conversation about what we can do next to solve our City’s financial crisis.

PhillyStat Overview and Highlights

How the national economic crisis affects Philadelphia’s budget
Summary: Philadelphia, similar to other cities around the country, is affected significantly by the national and international economic crisis. As the world economy declines, Philadelphia’s tax revenue and market investments decline.

Did you know the Philadelphia Gross Pension Return follows a similar trend with the Dow Jones Industrial Average? However, there are other factors that influence pension performance besides the investment markets. Recent declines in the equity, credit and other markets means that the City will need to increase its pension payments. Between FY09 and FY14 pension payments are projected to increase by half a million. Did you know that Philadelphia is dissimilar from many cities because the majority of its revenue is from a wage tax instead of a property tax?

Did you know that Philadelphia is dissimilar from many cities because the majority of its revenue is from a wage tax instead of a property tax?

Description about the major drivers of Philadelphia’s budget
Summary: The majority of the City’s budget shortfall comes from a drastic reduction in tax revenue (44% loss) paired with a significant market loss in pension funds (32% loss). In order for Philadelphia to move forward it will need to review closely review revenues and expenditures, keeping in mind the service and fiscal impacts of any adjustments.

Did you know that Philadelphia’s $1.04 billion shortfall is all in the City’s general fund and within the general fund only 41% of it can be reviewed for reductions?

Did you know that within the general fund less than half of it is considered discretionary funding – funding that the City can review as potential ways to close the budget shortfall? The rest of the money is a combination of obligations that are not discretionary – cannot be reduced to close the budget gap - such as debt service, pension payments, the Philadelphia School District payment.

Did you know that since fiscal year 1999 to fiscal year 2009, pension costs have increased about 105% and health care costs 30% (this is without the actual benefits changing but an increase in the costs to provide them)? The City’s pension system costs more than the Fire Department, Recreation Department, Free Library of Philadelphia and Fairmount Park budgets combined.

Did you know six major departments or functions of government make up close to 50% of the City’s budget and 75% of the City’s workforce? These departments, which provide many of our basic services, are the Police Department, Fire Department, Streets Department, Health & Human Services, Prison System and the First Judicial District.

Did you know that other cities are facing the same tough choices to solve similar financial issues? The City of Phoenix is cutting some departmental budgets by 15-60% and in Atlanta, Georgia they are laying off 600 workers including those in the Fire Department.

Chair:
Dr. Camille Barnett, Managing Director

Panelists:
Uri Monson, Executive Director of the Pennsylvania Intergovernmental Cooperation Authority Michael Nadol, Managing Director of Public Financial Management
Rob Dubow, Finance Director
Steve Agostini, Budget Director
Keith J. Richardson, Revenue Commissioner
Clarence Armbrister, Chief of Staff to the Mayor
Dr. Donald Schwarz, Deputy Mayor for Health and Opportunity
Rina Cutler, Deputy Mayor for Transportation and Utilities
Everett Gillison, Deputy Mayor for Public Safety
Andrew Altman, Deputy Mayor for Economic Development
David Wilson, Deputy Managing Director for Administration
Shelley Smith, City Solicitor

** Phillystat sessions will replay on channel 64 and can be seen on www.phila.gov