ANTHONY H. WILLIAMS
THE BUDGET
ANTHONY H. WILLIAMS
THE BUDGET
State Senator Anthony Hardy Williams | Testimony Before City Council
FY 2020 Budget and FY 2020-24 Five-Year Plan | Monday, April 15, 2019.
Council President Clarke and members of Philadelphia city council:  thank you for the opportunity to present testimony on the city’s proposed budget and five-year financial plan.
I am a three-decade member of the Pennsylvania General Assembly, having served five terms as a State Representative and more than five terms as State Senator. With me today, are former Mayor and Council President and Council Member John F. Street and the former City Controller’s Office Director of Financial and Policy Analysis, Brett Mandel.
A hallmark of the best governments is the expertise of the people who surround the person chosen to lead. The men who accompany me here today have greater knowledge of the city budget and government spending practices than most of us will ever understand. It’s why the recommendations we make here today reflect many years of thoughtful planning for our city.
I applaud the work that the members of this council perform reviewing budget documents and posing questions to administration officials. As our proposed spending nears $5 billion for the operating budget alone, it is a tremendous undertaking to review the city’s plan to spend our city’s scarce resources. But, I come before you today to say that this council and the public at large deserve more in terms of information about city spending. We can do better in terms of preparing and presenting systems and data so we can make better decisions about our budgetary assumptions and spending priorities.
And just as important, we want to make it easy for our residents and taxpayers to know how we are spending their money.
Philadelphia’s financial systems were once considered forward-thinking, but they were designed for the 1950s. Nearly three-quarters of a century later, the public and this city council deserve modern, accountable, and transparent government budgetary systems.
Today, there is no reasonable way city council, much less the members of the general public, can determine what will actually happen in terms of spending by looking at the city administration’s budgetary testimony. Because it is the mayor who actually determines line-item spending, there is no way for the public or city council to hold the administration accountable for what is actually spent or not spent in a given fiscal year. Finally, because there is not enumeration and public scrutiny of actual public contracts before they are awarded, there is almost no ability for the public or city council to participate meaningfully in decisions about who actually gets city work.
I very much look forward to working with you to make the changes in law and procedure to build a fiscal infrastructure for the 21st-century.
The proposed FY20 budget projects FY19 revenues to be more than $26 million higher than originally budgeted. That money could have been programmed to fund badly needed investments in our neighborhoods. Today, Philadelphia’s mayor establishes the city’s annual revenue estimate, which establishes a ceiling for budgetary expenditures. But, by setting an unnecessarily low estimate or an unreasonably high estimate, the mayor is able to budget to spend more than we have or to shortchange necessary investments.
I recommend we establish an independent local budget office similar to the congressional budget office to estimate city budget revenues to avoid overly optimistic (or pessimistic) revenue estimates by the mayoral administration.
This office would be similar to the one proposed by Councilman Derek Green and will give council some confidence about the amount of money actually available to spend in the coming fiscal year.
In FY18, the Police Department budget was set at $652 million, but the Mayor ended up over-spending that amount by more than $60 million before the year was over. In our dirty city, the mayor budgeted for a Streets Department of more than 1,900 employees this year but recent payroll records showed 154 fewer positions filled in the department. Today, city spending is authorized by agency and by class so city council and the public have no true say about a real spending plan beyond a vague idea that a certain amount will be devoted to each agency and that, within each agency, money will be allocated by category for such expenditures as salary and materials.
I recommend the city change its approach to adopt line-item budgeting that clearly details proposed expenditures to give city council and the public true authority over city spending.
Today, the city charter only mandates annual budgetary planning for operating expenditures, but best practices call for longer-term financial planning. As we can finally anticipate the end of Pennsylvania Intergovernmental Cooperation Authority oversight, we should be mindful to formally incorporate a more long-term view.
I recommend the city charter should be amended to require five-year budgets and financial plans in detail that both citizens and council members can understand.
Today, the proposed budget represents almost $1 Billion in increased spending from the last budget of the previous administration, exceeding the rate of inflation while, simultaneously, city services have deteriorated in many serious ways. Our streets have never been worse. Potholes are everywhere. And, we are living down to our Fithadelphia reputation. It is past time for our city to re-evaluate how public-resources — our tax money — connect to public-policy programs and services that are funded by those taxes.
I recommend that, in the future, we require a program-based summary of the city budget and issue a report card on city services to track results and citizen satisfaction.
Today, the end of the fiscal year occurs with little thought as to the accomplishments of the previous year’s spending. But, we would be better served by a process that incorporates a consideration of how our spending plans affected the state of the city. In the future, the mayor should be required to reconcile the budget every year, just like people at home reconcile their bank balance at the end of the month. How much did we spend and what did we spend it on?
I recommend that the mayor produce a comprehensive year-end report to detail how much of each line item in the budget was actually spent and to articulate the progress our city has made toward achieving outcome goals set forth at the beginning of the yearly budget process.
Today, initiatives routinely continue year after year with little consideration as to their effectiveness or any regular justification to continue that spending.
I recommend we utilize sunset provisions in contracts and programs to ensure that the city finds worth in its spending and does not continue initiatives past their effectiveness.
Today, it is possible to view personal credit-card spending data online instantly to track our household spending and monitor our personal transactions, but the city still does not make available real-time information about its expenditures. Despite promises of openness and transparency, the current budget is still a mystery to the public, nearly impossible to understand.
I recommend the city follow the lead of other major cities that publish an online comprehensive and real-time line-item budget and contract details with a goal toward making available all information the city is required to provide pursuant to a valid right-to-know law request.
Finally, the city’s most pressing and intractable problem is poverty. In the last three years, there has been no credible economic-development plan to create jobs and lift poor Philadelphians out of poverty. The commitment to be a sanctuary city is laudable and the creation of community schools is important, but those policies do not create jobs.
As mayor, I will annually transmit to city council and publish an economic plan that considers tax policy, infrastructure investments, arts and culture spending, and the leverage of city-owned utility and transportation assets to reach targeted employment goals.
Today, 21st-century Philadelphia faces challenges that 1950 Philadelphia could never have anticipated. But the passage of time has also seen the emergence of incredible advances of information technology and communication tools. The financial systems designed for the era of the Phillies Whiz Kids are insufficient for the modern Philadelphia of Bryce Harper’s team and it is time to rethink how we consider the city budget and the tools we use to communicate about city spending.
I appreciate the opportunity to appear before you today and look forward to the chance to work with you in the future to ensure that we make best use of our city resources ­ and that we utilize the best-possible budgetary procedures to guide the decisions we make on behalf of our residents.
Better Budgeting For A Better Philadelphia
Philadelphia deserves more information about city spending. We can budget better so we can make better decisions. Philadelphia’s financial systems were designed for the 1950s. We deserve modern, accountable, and transparent government budgetary systems.
  • Establish an independent local budget office similar to the congressional budget office to estimate city budget revenues to avoid overly optimistic (or pessimistic) revenue estimates by the mayoral administration.
  • Adopt line-item budgeting to detail proposed expenditures to give city council and the public real authority over city spending.
  • Change the city charter to require five-year budgets and financial plans in detail that both citizens and council members can understand.
  • Require the mayor to produce a programmatic expression of the city budget and issue a report card on city services to track outcomes and citizen satisfaction.
  • Require a comprehensive year-end report to detail how much of each line item in the budget was actually spent and to articulate the progress our city has made toward achieving outcome goals set forth at the beginning of the yearly budget process.
  • Utilize sunset provisions in contracts and programs to ensure that the city finds worth in its spending and does not continue initiatives past their effectiveness.
  • Require comprehensive and real-time, line-item online budget and contract details with a goal toward making available all information the city is required to provide pursuant to a valid right-to-know law request.
  • Publish a comprehensive economic-development plan that considers tax policy, infrastructure investments, arts and culture spending, and the leverage of city-owned utility and transportation assets to reach targeted employment goals.
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