Philadelphia is set to give pink slips to about 3,000 city employees Friday, but a bill that sits in the Pennsylvania Senate could help the city balance its fiscal 2010 budget and avert the massive layoffs and service reductions.
Senate Republicans, which control the chamber, have yet to announce when they may take up HB 1828. In addition, the Senate could alter amendments made to the bill by the House, which would further delay the measure's progression through the legislature. Democrats have a majority in the House.
"A vote this week is possible, but if major issues emerge a vote may not happen until next week," Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, said in an e-mail.
HB 1828 would boost the city's sales tax to 8% from 7% for five years and allow Philadelphia to defer $235 million of pension payments this year and next. Additional sales tax revenue derived from the one-percentage-point hike would go towards pension costs.
The Senate last month amended HB 1828 to include retirement reform initiatives for local governments throughout the state to help ease rising pension costs. The House last week changed those pension amendments. It remains to be seen whether the Senate will accept the House alterations and send HB 1828 to Gov. Edward Rendell, a Democrat, or make further changes to the measure.
"I've heard everything from them putting in a couple of amendments and sending it back [to the House] - and amendments, by the way, that we probably couldn't live with - to [doing] nothing and just concurring it tomorrow," said Nora Winkelman, chief counsel to the House Democratic Caucus.
Without HB 1828, Philadelphia must cut its workforce by 3,000, including eliminating 900 police officers, reduce the fiscal 2010 budget by $250 million, and close recreation centers and libraries throughout the city. Philadelphia officials must file that drastic budget alternative, called Plan C, by Sept. 25 to the Pennsylvania Intergovernmental Cooperative Authority unless the legislature passes HB 1828 by Friday. PICA oversees Philadelphia's finances.
The latest House amendments would allow municipalities to continue negotiating with labor groups on employment contracts and benefits and hold off on placing local pension systems under state oversight.
The House's alterations would also give Pittsburgh two years to shore up its retirement fund, which is only 28% funded, to avoid a state takeover. In addition, Philadelphia would not have to freeze current employee benefits and cut future workers' benefits by 20%.