Nutter meets deadline to submit spending plan

The Nutter administration officially requested yesterday that the state agency overseeing Philadelphia's finances approve a five-year spending plan that is largely contingent on future actions by the state legislature.

By submitting the plan, which covers fiscal years 2010 to 2014, the administration met a deadline that the agency, the Pennsylvania Intergovernmental Cooperation Authority, established last week.

The submission triggers a 30-day clock, at the end of which PICA is required to accept or reject the plan. If it does nothing, the plan is automatically accepted. What PICA will do, however, remains uncertain.

The city plan is based on a $3.8 billion budget for next year that was approved by Council and signed by the mayor. Its longer-term components call for a five-year, 1-cent increase in the sales tax for goods sold within the city. The tax is expected to generate $580 million over five years. It also includes several changes to the city pension plan that would save an estimated $255 million over five years.

All of those actions, however, require the nod of the General Assembly, which is amid a budget battle of its own that could last until late July or early August. The current fiscal year ends next Tuesday.

The upshot is that PICA's 30-day deadline, July 22, might come and go without any word from the state about whether the city's requests will be granted - and whether its long-term blueprint is realistic.

"Given all the moving parts, including the authorization required from the state, the uncertainty around union contracts, the PICA board has 30 days to act, and PICA staff is going to undergo its normal rigorous review process of all the assumptions in the plan in order to meet all the required deadlines," PICA executive director Uri Monson said.

But those "assumptions" cannot add up to a balanced plan without the needed action from the state, which would create a first-of-its-kind scenario if PICA is called upon to act one way or the other. The alternative would leave the city making deep spending cuts.

PICA's five board members, who are appointed by the governor and Democratic and Republican leaders in the House and Senate, said last week that they would ask their appointing authorities for advice about whether they should vote on a plan that relies on the state.