Philadelphia in Free Fall: New Debts, New Taxes, Pension Cuts

Philadelphia in Free Fall: New Debts, New Taxes, Pension Cuts

September 2, 2009 (LPAC) — Philadelphia Mayor Michael Nutter announced on Tuesday that the city will take out a $275 million loan from JP Morgan Chase, at 3% until Nov. 30, and 8% after that. The city is also preparing a plan to cut pensions, at the demand of the state government, in exchange for the state's permission to raise the city sales tax by 1%.

The city will delay about $150 million worth of pension payments this year, and current pension benefits will be frozen, while new workers' pensions will be cut by 20 percent. The average yearly pension for city workers is $17,350. The local CBS station notes that this is "not exactly a golden parachute."

More at source:
www.larouchepac.com...


Yeah, sounds like a good idea...can't pay this month? Take out another loan and make the problem worse. The American way.

[edit on 9/6/09 by silent thunder]

Idiots. I think what they need to do is shut down everything except essential services and figure out where they can save money. Whether that is down sizing, cutting budgets and/or programs, etc it needs to be done.

Everything is way to bloated and this is just sticking another debt needle in the arm for one more "fix". They only care about getting reelected. There gig is just about up, there is no money to sustain the programs and corruption any longer.

It all has to fall eventually, and it will soon enough, as much as I don't want it to, but the money as run out and its time to pay the piper.

Just another day in the life of a Pennsylvania citizen.

Welcome to "Taxsylvania".

reply to post by silent thunder
So much for the Sales Tax Holidays .Gov was spouting off about eh?

This sounds like another bad idea... :shk:

QUESTION
Is there still a tax free day in Pennsylvania
www.chacha.com...

Answer
Pennsylvania isn't scheduled to hold tax free day or weekend this year. You can head to Connecticut or Vermont for tax free days.

Sales Tax Holidays: Your Guide to Tax Free Holidays
www.brighthub.com...

Well, we knew it was over for Philadelphia when they took Michael Vick. That was the last gasp of a dying city.

But don’t worry about the budgets problems and such - Fast Eddie will make sure his main voting herd gets taken care of at the expense of the rest of the state. Citizens in Lancaster and Mercer should look for new, improved and higher taxes soon!

I'm wondering if the city decided to work around the unions by going to Chase for the loan.
There was a law in the works, but it required unions to agree.
(unless I'm missing something here...)

This story is from August 26 of this year.
Budget help for city could come with catch

Newly amended legislation that could clear the state Senate as early as today would give Mayor Nutter the authority to temporarily raise the sales tax and defer pension payments, measures that would save $700 million over the next five years and prevent mass layoffs and deep cuts to basic services such as sanitation and criminal justice.

In exchange, the bill would demand that the city cut the retirement benefits of future employees 25 percent, while capping the benefits of existing workers at current levels.

The legislation, which is fiercely opposed by city labor leaders, would represent an unprecedented state intervention into Philadelphia's dealings with its municipal unions.

~~~~~

Labor leaders, however, said they would do all they could to defeat the changes.

More from today, a commentary by Alan Butkovitz, the Philadelphia controller:
City won't escape this crisis by not paying its bills

The near-collapse of the stock market last fall caused a rapid drop in the value of the city's pension fund and accelerated the city's legally mandated contribution to the fund.

The city's inability to cover both the unfunded liability of our fund and the ongoing cost of providing essential city services, such as police, fire protection, and trash collection, have led to our current financial crisis.

[edit on 6-9-2009 by DontTreadOnMe]

reply to post by Hastobemoretolife


*sigh* ...... I've noticed in this depression that states and cities follow a backward logic: they shut down essential services first.

Fire, police, education, even city landscaping before the vast array of pointless programs that consume the majority of the budget. Now, a logical fella like me would wonder why that is, it makes no sense right?

Ah, but it does!

Shut down the essentials and you make the problem SEEM worse than it is.. why? Because if the citizens see the essentials cut far enough they say "Enough!" And ask how much they have to pay...

The city then passes levy after levy, raising income taxes, sales taxes, fees, property taxes etc

I know how to fix this entire problem.

Charge professional sports players and bank CEOs a 50% city tax.

There problem fixed.

(Seriously though, how can media say the "recession" is coming to an end when most state governments are insolvent. Hell! The country is!)

reply to post by Tentickles


I don't know if your being sarcastic or not... but I've known several "CEO's" who didn't make more than 100k a year.. and even have a relative married to a football player... I can assure you, while some are paid excessively to an extreem, why should they be singled out? That's capitalism, deal with it..

Want a "sollution" ... fire the Governments. Corruption and mismanagement run rampant at ALL levels.

Its not about direct taxation on .1% of the populace but about incompetent, corrupt city, state and federal leaders.

No matter how poor I get, I will never be jealous of another man just for making more money than me..

reply to post by Rockpuck


I agree with you, but this time I don't think it is going to fly, with some people it will, but lots of people have awoken from the slumber and realize there are lots of budgets and services that can be cut besides schools, police, fire, sanitation, hell what more do people need beyond that? All that stuff could be covered with just a 10% sales tax.

The problem comes in when the government wants to keep acting like our money is there money and they are privileged to it anytime they want it. You know if the government quit reaching into our checks and taking 15% plus and then acting like it is a favor when they give us a "refund" when we could have used that cash when we earned in the first place, there would be lots of problems that we don't have.

God forbid people are actually able to at the minimum get by on a minimum wage job, sure it might not be the best life but at least then the only excuse people would have is just being an idiot and nobody would feel sympathy for them.

This game is coming to an end though the writing is on the wall and I feel like the special interest is throwing lots of green paper in their faces to not see the reality of it all. It's a lose - lose situation for the government and corps if they drive this country to the point of violent revolt. People aren't going to have the cash to buy their products and there won't be any sort of significant income from government contract to keep most of these people in business.

Who knows?

I agree with your thoughts though, I just don't think it is going to work like it usually does in the past, people aren't buying lots of guns and ammo for nothing you know also seeds and food and everything else.

I know a guy who was a state rep a long, long time ago and I think he still draws a pension from that. I don't mean to rag on the guy because he's a great man and he's done lots of things for free around his town and really been of benefit...but still, I can't help wonder...you've got all these "ex-state-reps" and "ex-state senators" out there...hundreds, maybe even thousands in tiny little states like Maryland or Rhode Island or whatever who draw these pensions after what, four years of work? Am I missing something here? If you get elected to a state rep or state senate position are you really entitled to a lifetime pension after your term is up? That doesn't seem fair at all....how many thousands of these people are there out there who haven't done a stitch of work for decades since their brief stint of "public service" and have been living off of government cheese ever since....?? And how about the armies of "civil servants" who work for the department of such-and-such or an embassay somewhere who are elegible for retirement at age freaking FORTY-TWO with full benefits, assuming they started working after college and put in their 20 years? I have no problem paying pensions for folks who've actually worked a lifetime, or done dangerous and useful jobs like cops. But I have a feeling there are a lot of spongers out there, a lot of room for pork to be cut on that level, before you start talking about scaling back essential services.

Or am I wrong?

reply to post by Hastobemoretolife


Well I respectfully disagree. See, I have a much, much lower opinion of American people.. very low indeed. Ironically this morning on the news they were discussing a school system that fired 40 teachers.. after city leaders talked with "the people" a comprimise: a new levy this fall to increase property taxes, and the city opted to cut one or two non essentials to hire back some teachers.

Such will be the way across the country.. we are weak and pathetic.

Want to see the REAL america?

When we threatened illegal immigrants the largest protest in our history occured.. millions in the street waving mexican flags..

When our Oligarchy sold our country out against our wishes and burried us in a mountain of debt... a few hundred people protested at scattered events, which the movement has since lost direction and died.

This Republic won't see the end of this century.