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Budget relief bill a poison pill
If the State Senate has its way, collective bargaining will be crippled in Philadelphia.
The bill that gives us pension relief and a 1% sales tax increase, also mandates that "the city cut the retirement benefits of future employees 25 percent, while capping the benefits of existing workers at current levels."
This is wrong on two levels.
First, because pension benefits should be the subject of collective bargaining.
Second, because pension benefits are critical to providing good wages and attracting good employees in the city.
Yes, there is room for debate about how high those benefits should be. But any adjustments in benefits should take place carefully not as a result of a blunderbuss pointed at the city.
I'm as concerned about capping benefits of current workers as I am at the immediate 25% cut for new workers. Suppose we have another period of high inflation, as we did in the 1970s, that dramatically reduces the value of pensions while at the same time making it easier for the city to fund them. Will it be impossible to adjust those benefits?
Given the consequences for the city and its workers if we reject this law, it is imperative that, first, we try to change it on the floor of the Senate and in the House.
And, second, if that won't work, then we should figure out if we will be stuck with it for more than one year.
I'm not sure of the details with regard to this legislation. But Council certainly can replace the 1% sales tax increase with other taxes under its own control for the next four fiscal years and perhaps come out from under this onerous law. A new five year plan is submitted every year and can be modify decisions make under a previous five year plan.
Since property and business tax increaes would be fairer than a sales tax increase anyway, Council should take this action regardless.
And lets not forget that the Mayor and Council got us into this mess by putting all its eggs in one basket and relying on the General Assembly to fix a fiscal problem it could have fixed with other, better taxes.