Been getting a lot of questions re: the City budget and the defunding of the PPD, so here is a thread as to why todayâs vote is not the end of the story for this yearâs budget:
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In overly simple terms, the city budget does two big things:
1) it sets spending levels for departments for the next fiscal year and,
2) it sets the tax rates for the next fiscal year (7/1/2020-6/30/2021)
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1) it sets spending levels for departments for the next fiscal year and,
2) it sets the tax rates for the next fiscal year (7/1/2020-6/30/2021)
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So itâs both a money in and money out document.
Great you say, but whatâs the rush?! The world is on fire and they passed this budget at 11pm at night.
The âmoney inâ part of the budget is the reason for the timing crunch.
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Great you say, but whatâs the rush?! The world is on fire and they passed this budget at 11pm at night.
The âmoney inâ part of the budget is the reason for the timing crunch.
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There is a Pennsylvania Supreme Court cases which prohibits the city from raising taxes in the middle of a fiscal year. (7/1)
This means that Council has to approve its budget by 6/30 or it is stuck with last yearâs tax rates and a $750mm deficit.
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This means that Council has to approve its budget by 6/30 or it is stuck with last yearâs tax rates and a $750mm deficit.
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Buttttttttt (and hereâs the good news) while the âmoney inâ part of the budget is pretty set in stone as of 7/1, the âmoney outâ part isnât.
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Thereâs an entire Council committee - âAppropriationsâ - that exists in order to make mid-year budget adjustments.
Bills get introduced & passed to move money from one department to another or to move money from one class (personnel) to another (supplies) w/in a department. 6/
Bills get introduced & passed to move money from one department to another or to move money from one class (personnel) to another (supplies) w/in a department. 6/
This allows the city to shift resources based on needs as they change throughout the year. So for folks who are upset about the current PPD funding level, know that this is an issue that Council can revisit throughout the year.
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And I think the city will have to do a mid-year rebalance the budget once the true impacts of the pandemic on revenues are known. IMHO $750mm deficit feels conservative given how long itâs going to take for offices to open back up and our reliance on the commuter wage tax.
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Anyway, TL;DR version:
We are required to pass a balanced budget.
Council had to pass budget by 6/30 or deficit would have been huge.
Spending levels arenât set in stone and can be adjusted by Council through an Appropriations Bill.
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9/9