Controller's report on tax revenues could mean problems for city budget

Posted: March 03, 2014

CITY CONTROLLER Alan Butkovitz says tax revenues for the current fiscal year are about $16.5 million below budgeted projections, and the city's top money manager said that could make trouble for the upcoming budget and five-year plan.

Butkovitz blames the weather.

"Philadelphia's slowdown in economic activity corresponds with similar concerns across the United States, that the cold weather and snowstorms could be a significant factor," he said.

"With Pennsylvania's yearly revenues also falling short by 0.3 percent, it's a trend that's leaning toward the possibility that the city's lower tax revenues are a result of the harsh winter."

According to the controller's latest monthly economic report, from July 1, 2013, to Jan. 31, general fund tax revenues totaled $1.19 billion. But that number should look more like $1.20 billion.

The city's top money manager, Finance Director Rob Dubow, said that gives a bleak outlook ahead of the mayor's budget address, expected later next week.

"It does highlight one of the concerns we've had as we look at wage tax collections, which have been coming in slow," Dubow said.

"That's our biggest revenue source, and when that comes in slowly, it's a particular challenge for us," he said. "The potential is if that comes in slowly and we don't make other adjustments, it could eat into our fund balance."

Dubow predicts revenues will be off by about $30 million this fiscal cycle, "and that's a lot," he said.

Butkovitz said wages and earnings and net-profits taxes are reportedly down $7.5 million; real-estate taxes are down $5.4 million; realty-transfer taxes are down $2.2 million; and sales taxes are down $2.4 million. The business income and receipts taxes, however, turned up $1 million above projections.

The controller's report also revealed that monthly home sales were down 8.5 percent from this time last year. Neighborhoods across South Philadelphia were the exception, with some of the highest recorded sales for the month of January.


On Twitter: @RuffTuffDH

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