Philadelphia could see budget relief by Sept. 8 if Pennsylvania House Democrats act on a measure that would help the city balance its fiscal 2010 budget.
Resolving HB 1828 by Sept. 8 would avert 3,000 city layoffs and drastic service reductions in the city's revised budget, known as "Plan C." Philadelphia on Thursday filed Plan C to the Pennsylvania Intergovernmental Cooperation Authority, which oversees the city's finances and budgets.
PICA has until Sept. 11 to weigh in on the revised budget, unless the state legislature approves HB 1828 as amended before then, which would negate the need for an alternative budget.
"What we've been told by House leadership is that they will vote on our bill by the 8th," said Rob Dubow, Philadelphia's finance director.
Democrats control the lower chamber while Republicans hold the majority in the Senate.
The city has been operating without a balanced budget for two months and stopped paying its vendors in July. The pending bill allows Philadelphia to increase its sales tax by one percentage point to 8% until 2014 and defer a portion of its pension contribution payments in fiscal 2010 and fiscal 2011.
The initiative would also extend Philadelphia's pension amortization period to 30 years from the current 20-year plan.
The Senate last week passed HB 1828 but added pension reform amendments that would affect counties throughout the state. Those changes include the state administering local pension plans that fall below a 50% funded ratio. Pittsburgh's pension system, which is 28% funded, would fall under state oversight under the bill.
Municipalities would continue to pay yearly pension contributions, although at lower amounts, while the state would have control over benefit negotiations with labor groups.
Along with Philadelphia's budget issue, the state has yet to pass its own fiscal 2010 budget. Pennsylvania's fiscal year began July 1 as well.
Lawmakers are deadlocked over how to balance the fiscal 2010 spending plan. Democrats seek tax increases to coincide with budget cuts while GOP members believe the state must reduce expenses further as boosting taxes would put a strain on households.
Bob Caton, spokesman for House Speaker Keith McCall, said the budget conference committee will begin meetings again this week.