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Philadelphia 2020: Chapter Four

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The following is a fictional account.

 

Chapter 4

The men around the table sat silently studying the sheet of paper in front of them.  None of them was smiling and they had no reason to be.

Typed on each sheet, for each president of a municipal union, was what was euphemistically called a "Wish List" of concessions and givebacks the Brown administration was demanding of them.

Each list was slightly different, but the demands were similar: a 10 percent cut in wages, work rule concessions, increased employee contributions to their pension plans, a doubling of the co-pay on most health insurance options. Total givebacks: $220 million.

Sitting at the head of the table, barely suppressing a grin, was Chief Deputy Mayor Marty Calubra flanked by Managing Director Cecilia Thompson and Finance Director Rob Beck.

Finally, Calubra broke the silence.

"Gentlemen, as I said, I need your answers within 48 hours.  Time is running out.  We need to act within the next few days or else we're going to have to face the reality of Senate Bill 222 becoming law.  And that, as you well know, will be a disaster for you and your members and for this city."

Calubra couldn't help feeling pleased at the misery of the union leaders. 

He was also pleased that the plan, hatched with the help of John Street, had gone so well.

A few weeks before, Mayor Brown had stepped to the podium in City Council chambers and delivered her budget address for fiscal 2019-2020. 

"The time has come," she said, "for us to face reality.  As a city, we have lived beyond our means for too many years.  The day of reckoning has come.  And we must act with courage and resolve to confront the real problem."

And what was that problem?

Not city spending.  Not the fact that Philadelphia still had too many municipal employees.  Not high taxes.  The problem, Mayor Brown told Council, was the state of Pennsylvania.

"We have been treated like a stepchild by the Commonwealth, as second-class citizens," she said, looking like a displeased mother. "We have been denied our fair share of help and financial aid from Harrisburg. And the time has come for us to do something about it."

What was needed, the mayor said, was to send Harrisburg a message.  And here it was: the City of Philadelphia would no longer subsidize state-run operations in the city.  "Let the state of Pennsylvania pay what the state of Pennsylvania created," she said.

The list was a long one: the city would no longer pay subsidizes to support the public schools, SEPTA, the Convention Center or the court system.  Nor, Brown added, would it follow the mandate of the law and pay the $225 million due under the Pension Fund Stabilization Act.  "The state mandated that payment," the mayor concluded. "Let the state pay for that mandate."

Coincidentally, the cuts totaled $460 million - exactly the size of the deficit faced in the 2020 budget.

Calubra was delighted with the speech, which was greeted by cheers from Council and the carefully-packed gallery in the Council chambers.  "Philadelphia Freedom" was the sign he had hung in each archway entrance to City Hall.

Beck and Thompson had argued against the gambit, saying it went against, as Beck put it, "every known covenant and agreement made between the city and state in the last 25 years."

In Harrisburg, the reaction was predictable.  The Senate Republicans were apoplectic. The governor was furious.  Even the reactions of legislative Democrats from outside the city ranged from embarrassed to pissed.

 

 

John Hawkins the city's chief lobbyist in Harrisburg, emailed back to Calubra increasingly dire messages about the situation in the State Capital.

"Met with Metcalfe. Had to endure 40-minute rant.  Sez Phila. no longer capable to govern itself.  He is out for scalp, Marty."

"Met with Sen. Pres. Piccola. Sez Philly has finally gone too far.  Vows punitive actions."

Piccola was as good as his word.  Within three weeks after the mayor's address, Senate Bill 222 was introduced, sponsored by the entire Republican caucus. Called the Philadelphia Restoration & Relief Act of 2019, it went on for 160 pages, most of it in dense legalese.

Hawkins translated it for Calubra in a lengthy email:

"Essentially, Marty, it is a state takeover of the city,"   It lets the governor appoint a three-member Oversight Board to 'oversee' fiscal operations of the city to assure it meets its legal obligations to the Commonwealth.  This board has the power to raise taxes, abrogate existing union contracts, hire and fire department heads, write the city budget and, in effect, do it without approval of the mayor and City Council."

Calubra messaged back: "What's left for the mayor to do?"

Hawkins: "Cut ribbons and drive around in her city car.  And I'm not joking."

Calubra: "She won't like this one bit."

Hawkins: "She's not supposed to like it". 

Later, in a meeting with Beck and Thompson, Calubra couldn't help but crow.  "We've got them right where we want them," he said.

Beck looked ill.  "Marty, have you gone crazy.  We're about to be taken over the state of Pennsylvania.  By a governor who hates Philadelphia and a Republican legislature that can't wait to get its hands on every non-bid contract in this city."

"No, Beck, you don't understand," Calubra said. "It's just as Street predicted.  We stick our finger in the state's eye and they react predictably.  With SB 222, they have given us a cudgel we can use - on Council, on the unions, on all the whiners out there.  We tell them: either you agree to the concessions we are asking for - or the state will take over. And then you will be sorry.  Because as bad as our demands seem, they are nothing compared to what the governor and his henchmen will force on you."

"We are," Marty Calubra said, "in a wonderful position."

 

Chapter Five: Endgame

 

 

This short story is fiction, but the facts and figures are real. It is based on the estimation that the tax and spending policies of the city for the last 10 years will continue for the next 10 and it carries them forward to 2020. The crisis in this story is caused by a slight decrease in tax revenue and several extraordinary expenses.   A separate part called "Facts and Figures" will outline current spending trends and projections going forward. This series was written and reported by Senior Editor Tom Ferrick Jr.

 

 

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