Philly takes $42M hit in new budget

Gov. Corbett's proposed cuts: "We're talking about pretty significant cuts in a lot of different areas that really impact people's lives," said PICA member Greg Rost. "Somebody at a higher pay grade than me is going to have to figure out how to make this whole thing work."
Gov. Corbett's proposed cuts: "We're talking about pretty significant cuts in a lot of different areas that really impact people's lives," said PICA member Greg Rost. "Somebody at a higher pay grade than me is going to have to figure out how to make this whole thing work." (TOM GRALISH / Staff Photographer)
Posted: February 22, 2012

Gov. Corbett's new budget proposal would cost the city $42 million in mostly mental health and addiction treatment funding, but city officials say the impact will be worsened by ensuing needs for emergency shelter, child welfare, and other services.

"Our first take is pretty negative," city Finance Director Rob Dubow told the Pennsylvania Intergovernmental Cooperation Authority, the city's financial oversight board, in a 15-minute presentation Tuesday.

Beside the cuts in aid to the city government, the Philadelphia School District faces an additional $21 million reduction in state support, due to the elimination of a "state accountability grant" program.

A spokesman for the School District, Fernando Gallard, said its overall pension costs are projected to climb from $75 million this year to $113 million next year, a $38 million increase. State subsidies are supposed to cover $24 million of that amount, he said, leaving the School District to cover an additional $14 million.

Meanwhile, the legislature has mandated major increases in local payments to the state teachers' retirement fund, to deal with unfunded pension liabilities, according to the city's analysis.

Massive cuts in higher education - the biggest a proposed 30 percent, $42 million cut in state aid to Temple University - would likely reduce the number of Philadelphia-based jobs, as well as raising tuition, the city said.

The biggest direct impact on the city budget would be a projected $33 million reduction in state aid to the city's Department of Behavioral Health.

The Corbett administration proposed combining six different line items in the state budget into a single human services block grant.

"The rationale is, it would give counties more flexibility on how they spend their money," according to Dubow. "But at the same time funding was cut dramatically, by about 20 percent."

Without the money, "the department anticipates an increase in homeless and criminal justice populations, especially those with addictions [and] an increase in people living on the streets," Dubow and his chief of staff, Anna Wallace Adams, told PICA.

The city Health Department faces an additional $7 million in state cuts. That would reduce the number of beds in the city nursing home and cost hospice beds for AIDS victims, officials said. Some of that money is also used as matching funds to secure $24 million in federal aid for HIV testing and other AIDS-related services, the city said.

One PICA member, developer Michael Karp, speculated that the city would have to come up with more money for the School District, as it did with a real estate tax hike last year, to help cover the proposed reduction in state aid.

"The order of magnitude at the school system is greater, but the impact on the smaller [social service] programs is devastating," said PICA chairman Sam Katz, citing a projected loss of 400 beds in community residences for people with intellectual disabilities.

"We're talking about pretty significant cuts in a lot of different areas that really impact people's lives," added PICA member Greg Rost. "Somebody at a higher pay grade than me is going to have to figure out how to make this whole thing work."


Contact staff writer Bob Warner at 215-854-5885 or warnerb@phillynews.com.

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