Legal News

PICA Board Approves Budget Cuts Under 'Plan B' But Distances Itself From Court Closure Threat

By Brian Harris

By Amaris Elliott-Engel
Of the Legal Staff

n a maneuver that allowed the governmental authority that must approve the city's budgets to avoid taking a firm stance on a plan to defund the city's courts, the Pennsylvania Intergovernmental Cooperation Authority voted today to approve a provisional five-year fiscal plan that is contingent upon the city's receipt of approval in Harrisburg to raise its sales tax to 8 percent and to defer pension fund payments.

The PICA resolution was approved unanimously. The resolution states that -- considering there is support by the state Senate, the state House of Representatives and Gov. Edward G. Rendell for the sales tax-pension bill -- that it is appropriate for PICA to approve a fiscal plan that hinges on bringing more revenue into the city.

Without the sales tax dollars and the deferment of pension expenses a firm reality, Mayor Michael  A. Nutter prepared an alternative budget as required by the law that would balance the city's budget by making $700 million in cuts, including the elimination of funding for the courts, the District Attorney's Office and the Defender Association of Philadelphia.  In all, the Nutter administration has put forth three budget plans: "Plan A," the budget passed by City Council and hinging on the sales tax and pension deferral bill; "Plan B," a revised budget that still relies on the sales tax and pension deferral bill but makes $20 million in cuts because two months of projected sales tax were lost to the city because of the delay in Harrisburg; and "Plan C," a budget that involves the $700 million in cuts without the sales tax and pension deferral bill.

The feasibility of cutting funding for the criminal justice system under "Plan C" was rejected by four of the five members of the PICA board.

James Eisenhower, chairman of PICA and appointed by Rendell, Michael A. Karp, appointed by state House of Representatives Minority Leader Samuel H. Smith, Joseph A. DiAngelo, appointed by Senate President Pro Tempore Joseph B. Scarnati III, and Wadud Ahmad, appointed by Robert J. Mellow, minority leader of the Senate, either said during the meeting or in interviews after the meeting that cutting court funding was untenable. William J. Leonard, vice chairman of PICA and appointed by Speaker of the House Keith McCall, declined comment on whether he thought court funding could be cut in order to balance the city's budget.

If the sales tax and pension deferral bill does not become law by Sept. 18, then the city of Philadelphia will have to modify its "Plan C" budget to comport with the law establishing parameters for what PICA can approve as a reasonable budget. Cutting funding for the courts might not comport with those parameters, Eisenhower said.

After the meeting, City Councilman Bill Green, who was in attendance, at first questioned PICA's approval of the "Plan B" budget, saying it might not be legal because City Council has neither approved "Plan B" nor waived its right to consider "Plan B."  City Council did waive its right to consider "Plan C."

Uri Monson, executive director of PICA, told reporters after the session that the mayor does have the authority to spend less than authorized by City Council so "Plan B" does not need City Council's imprimatur. Green deferred to Monson on the point.

Green also said that both City Council and PICA had avoided giving a serious hearing to "Plan C" because it would be embarrassing to consider a budget without funding for the courts.

The Nutter administration argues that the state has the legal responsibility to pay for the courts of the First Judicial District. But Green said that argument ignores political reality, considering the General Assembly has been ignoring state Supreme Court decisions about funding a unified judicial system for two decades.

Meanwhile, a state budget deal was announced today -- more than two months after the deadline for the General Assembly to pass the state budget. But the legislation sketching in details of the budget deal hasn't been written yet, so it is not yet clear how the state budget will impact the state judiciary and legal aid organizations.

The state House of Representatives is expected to vote tonight on the city's pension-sales tax bill. The House is expected to change the pension amendments the state Senate added to the bill and that have sparked organized labor opposition. If passed tonight, the bill will then have to go back to the Senate, and it is not yet clear when the bill's fate will finally be known.

Full post as published by The Legal Intelligencer Blog on September 11, 2009 (boomark / email).