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June 10, 2004
TO THE PRESIDENT AND MEMBERS OF THE
COUNCIL OF THE CITY OF PHILADELPHIA:
I am returning herewith as disapproved Bill Nos. 040009, 040010, 040012, 040255, 040257, 040258, 040397, and 040022, passed by the Council on May 31, 2004.
The Administration transmitted to City Council an Operating Budget and Five-Year Financial Plan on March 18, 2004 that were balanced, and that contained difficult but necessary choices while maintaining the City's successful nine-year program of tax reductions. Since 1995, almost $1 billion has been "returned" to our taxpayers in the form of wage and business tax reductions. The Budget and Five-Year Plan transmitted to Council continued tax reductions and supported new tax reform while maintaining commitments to services, our neighborhoods, and our fiscal stability. Meeting these commitments has become increasingly difficult due to the continuing weakness in the national and local economy. Our projected tax revenue growth over the next five years does not even not cover the increasing costs of our pension and health care benefits alone, and in order to have a balanced Plan we must follow through on right-sizing our facilities and services while making expenditure reductions of over 5 percent to most departments. The challenges of the Philadelphia Gas Works made our task even more difficult. As you know, at the insistence of the PICA board we were compelled to eliminate the $18 million annual PGW revenue from the plan. On May 19th I submitted amendments to the Five-Year Plan that unfortunately contained further expenditure and service reductions, including the elimination of approximately 687 additional positions in FY06.
The budget package passed by City Council on May 31st turned a blind eye to the challenge we are facing, and created a Five-Year Financial Plan that is not balanced - a Plan that violates the Pennsylvania Intergovernmental Cooperation Authority (PICA) Act and the provisions of the...
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