Stated Meeting, January 27, 1998

00001 COUNCIL OF THE CITY OF PHILADELPHIA STATED MEETING Tuesday, January 27, 1998 10:25 a.m. Room 400, City Hall Philadelphia, Pennsylvania PRESENT: COUNCIL PRESIDENT JOHN F. STREET COUNCILWOMAN ANNA CIBOTTI VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN MARIAN B. TASCO COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN AUGUSTA A. CLARK COUNCILMAN DAVID COHEN COUNCILWOMAN HAPPY FERNANDEZ COUNCILMAN JAMES F. KENNEY COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER MARIE B. HAUSER, Chief Clerk VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center Plaza, Suite 600 Philadelphia, PA 19103 (215) 561-2220. 00002 INVOCATION

Good morning, ladies and gentlemen. The Chair notes that the hour has come and that a quorum is present. Council will come to order. Members will take their seats, visitors will retire to the seats outside the rail. To give our invocation this morning, the Chair welcomes Reverend Marian Shearer, who is the Pastor of the St. Luke's United Church of Christ. She is here as the guest of Councilman O'Neill. Members and guests will please rise. REV. MARIAN SHEARER: Will you join with me in a time and an attitude of prayer. Oh, great God, creator of all things, we pause before you at this moment to center ourselves in your love and remind ourselves that all our human affairs are in your powerful grip, and all our human decisions are judged in your righteous light. We know from the mighty witness of holy scripture that you intend wholeness and peace for all your children. We know from the mighty pull of your 00003 APPROVAL OF JOURNAL Holy Spirit that you intend righteousness, right relationships, among all your children. We pray now this day for all of the families, children, workers, elderly, all the people of our city whom you have placed in the care of these leaders. May all that we do move us toward your intention for righteousness, the right relationships that are the sign of your reign. May all these elected leaders, Councilmembers, staff, and workers know their work is the fulfilling of your call to service, their holy vocation. We offer these, our prayers, knowing that you always listen and always receive. Amen.

The Chair thanks Reverend Shearer for her inspiring invocation. (Councilmembers greet Reverend Shearer.)

The next order of business is the approval of the meeting of the Thursday, December 11, 1997. The Chair recognizes Councilwoman 00004 LEAVES OF ABSENCE Clark.

Mr. President, I move the adoption of the journal of that date.

All in favor let it be known by saying aye. Those opposed say nay. The ayes have it, the journal of the meeting of Thursday, December 11, 1997, stands approved. The next order of business is leaves of absence. The Chair recognizes Councilwoman Verna.

Thank you, Mr. President. On behalf of the majority, there are no requests for leave of absence.

The Chair thanks the Councilwoman. The Chair recognizes Councilman O'Neill.

Mr. President, on behalf of the minority, there are no requests for leave of absence. 00005 WELCOME VISITORS

The Chair thanks Councilman O'Neill. At this time we will dispense with our regular order of business to recognize visitors. To all our visitors and guests with us this morning, we welcome you and applaud your interest in the civic affairs of our city, and certainly invite you to come again. Now, today we have no presentations to make because of the special nature of our session. But at this time we would like to take the opportunity to recognize the members of this Administration who are here. What I would like to ask you to do is, as we call your names and indicate your title, please stand. At the end of having called all the names, we would like to have a round of applause recognizing our administrators who are here with us. Steve Mullin, City Representative and Director of Commerce; Joe Certaine, Managing 00006 INTRODUCTION OF ADMINISTRATION Director; Ben Hayllar, Finance Director; Stephanie Franklin-Suber, City Solicitor; John Kromer, Director of Housing; Greg Rost, Chief of Staff; Michael DiBerardinis, Recreation Commissioner; Fran Egan, L & I Commissioner; Richard Neal, Police Commissioner; Joan Reeves, Human Services Commissioner; Joan T. Decker, Records Commissioner; Harold B. Hairston, Fire Commissioner; William Mifflin, Executive Director of Fairmount Park; Nancy Kammerdeiner, Revenue Commissioner; Estelle Richman, Health Commissioner; Thomas Costello, Prisons Commissioner; Kumar Kishinchand, Water Commissioner; Lawrence Moy, Streets Commissioner; Andres Perez, Public Property Commissioner; Louis Applebaum, Procurement Commissioner; Rina Cutler, Executive Director of the Parking Authority; Noel Eisenstat, Executive Director of the Redevelopment Authority; Nicholas DiPiero, Chairman, Civil Service Commissioner; Barbara Kaplan, Executive Director of the Planning Commission; Linda Seyda, Director of Personnel; James Roundtree, Executive Director of MBEC; Dr. Richard Tyler, Director of the Historical Commission; Kevin Vaughan, Director of Human Relations Commission; Dr. David Hornbeck, 00007 INTRODUCTION OF ADMINISTRATION Superintendent of Schools for Philadelphia; Jonathan Saidel, City Controller; Lynne Abraham, District Attorney; Ronald Donatucci, Register of Wills; Vivian Miller, Clerk of Quarter Sessions; John Green, Sheriff; The Honorable Alex Bonaviticola, President Judge, Common Pleas Court of Philadelphia; The Honorable Alan Silberstein, President Judge, Municipal Court; The Honorable Frank Little, President Judge, Traffic Court; James Hawes, President, CEO PGW; Elliot Shelcroft, Executive Director, Philadelphia Free Library. (Applause.)

We always like to do this, because this time next week things might not be so pleasant. At this time the Chair recognizes Councilman Brian O'Neill.

Mr. President, I am going to ask to be relieved of my responsibilities today and be excused for the rest of the session. I just got a call of a personal nature that my father may need me.

Thank you very 00008 COMMUNICATIONS much. Leave will be granted. The next order of business is Communications. The Chair recognizes the Sergeant At Arms for the purpose of delivering the messages from the Mayor to the Chief Clerk. The Chief Clerk will read the messages from the Mayor.

December 15, to the President and members of the Council of the City of Philadelphia: I am pleased to advise you I have today signed 26 bills which were passed on December the 11th. December 19, I am pleased to advise you I have today signed two bills which were passed on December 11. Also, on December 29, three bills which were passed by Council on December 4, and one bill which was passed on December 11. And to the President and members of the Council of the City of Philadelphia: I am transmitting herewith, for the consideration of your honorable body, the following resolution: A resolution providing for the approval by the Council 00009 COMMUNICATIONS of the City of Philadelphia of a revised Five Year Financial Plan for the City of Philadelphia, covering Fiscal Years 1999 through 2003, incorporating proposed changes with respect to Fiscal Year 1998, which is to be submitted by the Mayor to the Pennsylvania Intergovernmental Cooperation Authority, pursuant to the Intergovernmental Cooperation Agreement, authorized by an Ordinance of this Council, approved by the Mayor on January 3, 1992, Bill No. 1563 A, by and between the City and the Authority. And an Ordinance adopting the Operating Budget for Fiscal Year 1999. And an Ordinance to adopt a capital program for the six Fiscal Years 1999 through 2004, inclusive, and an Ordinance to adopt a Fiscal 1999 Capital Budget. An Ordinance amending Chapter 19-2600 of the Philadelphia Code entitled "Business Privilege Taxes," by decreasing the rates of the tax based upon gross receipts, and by clarifying the activities which will subject a person to tax for engaging in business within the city. And an Ordinance authorizing 00010 INTRODUCTION OF BILLS & RESOLUTIONS transfers in appropriations for Fiscal Year 1998, within the General Fund, from the Director of Finance contributions to School District tax cuts, the Department of Revenue Sinking Fund Commission and the City Representative and Director of Commerce economic stimulus, to the First Judicial District of Pennsylvania.

The Chief Clerk will read any other communications in her possession.

There are none, Mr. President.

The messages, then, will be presented in the Journal. The next order of business is the introduction of bills and resolutions. The Chair recognizes Councilwoman Verna.

Thank you, Mr. President. I offer eight bills by request.

The clerk will please read the titles of the bills.

An Ordinance to adopt a capital program and six Fiscal Years 1999 through 00011 INTRODUCTION OF BILLS & RESOLUTIONS 2004. And an Ordinance to adopt a Fiscal 1999 Capital Budget. An Ordinance to authorize the creation of a loan or loans to provide funds for and towards various capital municipal purposes, authorizing the Mayor, City Controller, and City Solicitor, or a majority of them, to sell bonds at public or private negotiated sale, setting forth the capital purposes and the amounts for which the proceeds of the loan or loans will be expended. And amending Chapter 19-2600 of the Philadelphia Code entitled "Business Privilege Taxes," by decreasing the rates of the tax based upon gross receipts, and by clarifying the activities which will subject a person to tax for engaging in business within the city. And an Ordinance amending Chapter 19-1500 of the Philadelphia Code entitled "Wage and Net Profits Tax," by decreasing the rates of the tax. And an Ordinance to adopt a Fiscal 1999 Capital Budget. And an Ordinance adopting the Operating Budget for Fiscal Year 1999. 00012 INTRODUCTION OF BILLS & RESOLUTIONS And an Ordinance authorizing transfers in appropriations for Fiscal Year 1998 within the General Fund for the Director of Finance contributions to School District tax cuts, the Department of Revenue Sinking Fund Commission, and the City Representative and Director of Commerce, economic stimulus, to the First Judicial District of Pennsylvania. And a resolution providing for the approval by the Council of the City of Philadelphia of a revised Five Year Financial Plan for the City of Philadelphia covering Fiscal Years 1999 through 2003, and incorporating proposed changes with respect to Fiscal Year 1998, which is to be submitted by the Mayor to the Pennsylvania Intergovernmental Cooperation Authority.

These bills and this resolution will be referred to the appropriate committee. I understand the Mayor is on the way. Ladies and gentlemen, the time has come for us to consider the Mayor's presentation of the annual budget message. 00013 INTRODUCTION OF MAYOR Section 4-1101 B and D of the Philadelphia Home Rule Charter states, "The Mayor shall submit to Council not later than 90 days before the end of the Fiscal Year an Operating Budget message and a proposed annual operating budget ordinance for the ensuing fiscal year." At the same time he submits to the Council with the proposed operating budget for the ensuing Fiscal Year, he also submits to Council the recommended capital program and the recommended Capital Budget as received from the Planning Commission, to the extent approved by the Mayor. I now appoint the following committee to escort the Mayor into the Council chambers: Councilwoman Verna, Councilwoman Clark, Councilmember Longstreth, Councilman Cohen, Councilman Nutter, and Councilwoman Krajewski. Please proceed. I just would like to announce that ordinarily we would make copies of the Mayor's budget message available to the members of the general public and those people who are here from the Administration. But, unfortunately, we were supplied 00014 MAYOR'S PRESENTATION with a very limited number of copies. Our machine is disabled at the moment, and we were unable to make the copies. And I understand from Mr. Fealey that copies are on the way. So if you will bear with us and be a little patient, the Mayor and the copies of his message will be here. SERGEANT AT ARMS: Mr. President, the Mayor has arrived.

Ladies and gentlemen, the Mayor of the City of Philadelphia, Mayor Edward G. Rendell. Mr. Mayor. (Applause.)

Mr. President, members of City Council, and distinguished guests. It is my pleasure to be here this morning to present our proposed Fiscal Year 1999 operating and capital budgets, and also to submit for City Council's consideration our Five Year Financial Plan for Fiscal Years 1999 through Fiscal Year 2003. Over of the course of the past six 00015 MAYOR'S PRESENTATION years, we have been through a lot together. It may seem like ancient history now. But when I delivered my first budget address to City Council in 1992, a lot of people did not give us much of a chance. Our city budget was over $200 million in deficit, and basic city services were taking a beating. In the midst of summer heat waves, city swimming pools did not open. The long-awaited Criminal Justice Center was still a hole in the ground. Over the prior year, our city had lost an average of over 2700 jobs per month. Over the prior decade, the city had increased taxes 19 times. There was serious discussion about shutting down firehouses, ending all shelter for the homeless, and laying off thousands of city workers if Philadelphia was to have any hope of staving off bankruptcy. Together, we avoided those choices. And while the choices we did make were not always easy, we developed a strategy that has turned this city around. 00016 MAYOR'S PRESENTATION We promised to balance our budget to ensure our government's stability and credibility. We promised to cut the costs of living and doing business in the city, to close the competitive gap between Philadelphia and our suburbs. We promised to improve the quality of basic city services, to safeguard and enhance a quality of life that will make the city a place where people and businesses want to be. And we promised to invest in our future, through a strong capital program and strategic economic development initiatives that would grow the economy and create jobs for our residents. In holding to this strategy, we have been rocked more than once by jolts from corporate headquarters outside of Philadelphia and from the halls of government in Harrisburg and Washington. We have seen the loss of many Philadelphia institutions -- Wanamaker's, Breyers, Fleer, After Six, Whitman's Chocolates, Mrs. Paul's, and, most devastatingly of all, the Philadelphia Naval Shipyard. We have seen brutal reductions in 00017 MAYOR'S PRESENTATION Welfare and Medical Assistance for our most disadvantaged citizens. We have seen year after year of an inadequate state funding for our public schools that fails to keep pace even with inflation, let alone with the growth in enrollment and educational needs of our school children. Despite all these challenges, we have stuck to our strategy and we have delivered on our promises. As a result, in 1997, Philadelphia experienced its best year in decades. Let me briefly recap for you some of the highlights of the past year. With the support of this Council, Kvaerner, one of the world's largest shipbuilders, announced that it will soon begin transforming the former Philadelphia Naval Shipyard into a state-of-the-art facility that will bring back an American industry, and will create up to 1200 direct jobs and an estimated 5,000 or more additional jobs across this region. In lower North Philadelphia, HUD selected us as one of six cities nationwide for funding to construct nearly 300 new homes in the 00018 MAYOR'S PRESENTATION Cecil B. Moore area. The $107 million Apollo of Temple opened its doors. And the growing successes of neighborhood revitalization efforts, both commercial and housing, have created a phenomenon not seen in a generation, property values are rising, and people are coming home to North Philadelphia. , helping to generate the announcement of nine major hotel projects, seven of which are already under construction. These seven projects will create an estimated 3300 construction jobs and 1700 permanent jobs.

Also during the year, the pride of the Million Woman March and the spirit of the President's Summit for America's Future focused the eyes of the world on Philadelphia. At Independence Hall, the greatest model of history in our nation, funding was secured for a new Liberty Bell Pavilion and a Gateway Visitor Center, while a new master plan was 00019 MAYOR'S PRESENTATION announced, highlighted by an exciting new National Constitution Center. At Schuylkill Falls, HUD awarded a $26 million grant to the Philadelphia Housing Authority in support of an innovative $68 million plan to build 300 low-rise homes and retail shops on the site of that demolished high-rise towers. At Penn's Landing, the city and the nationally recognized Simon DeBartolo Group announced plans to create a $200 million, family-oriented urban entertainment complex, only the third in the nation of its kind, that will serve as an anchor for the newly revitalized Delaware River waterfront. In West Philadelphia, the University of Pennsylvania broke ground for the construction of a $120 million retail and residential project called Sansom Commons, which will create over 400 permanent jobs. Along the Avenue of the Arts, a stunningly successful restoration project opened the vibrant High School for the Creative and Performing Arts, while the Regional Performing Arts Center project took two major steps forward with the 00020 MAYOR'S PRESENTATION announcement of a world-class design team and a $5 million gift from philanthropists Ray and Ruth Perelman. In Eastwick, PNC Bank opened its new operation center, keeping 1,000 jobs in the city -jobs that were sought mightly by New Jersey -- and announced plans for further expansion that may add up to 500 additional new jobs. Also in 1997, Philadelphia welcomed several world-class chains and major new retail stores and restaurants, from Lord & Taylor, to the Hard Rock Cafe. And many, many more are queuing up to get in on the Philadelphia revival. At Philadelphia International Airport, USAirways and the city announced a new $400 million development project that will more than double the airline's overseas service from Philadelphia, and create more than 3,000 construction jobs and 3600 permanent jobs. Already, the airport's improved facilities, shops, and restaurants have helped make Philadelphia International Airport the fastest growing of the nation's 25 busiest airports. And our project to build the new 00021 MAYOR'S PRESENTATION commuter runway is well ahead of schedule, and will open in 1999. 5 million, 180,000 square foot building that will serve as its United States headquarters. And work has finally begun on the procedure that will bring down the fire-damaged Meridian Tower. S. Naval home were announced. When complete, the project will represent the city's largest new housing development in more than four decades. In the city's three empowerment zones, 1997 demonstrated that we can restore hope even to our most distressed communities. In the North Central Zone, we broke ground for the exciting new Billie Holiday Entertainment Plaza on Cecil B. Moore Avenue. In the Parkside Empowerment Zone, we are moving forward towards completion of a new 00022 MAYOR'S PRESENTATION state-of-the-art industrial park, as well as a new first-class shopping center. 5 acre Gateway Plaza Shopping Center, the first new retail construction in this neighborhood for nearly 30 years. All told, 56 new businesses have now moved into the Empowerment Zone, and 18 more have received the financing they need for expansion.

And in neighborhoods throughout the city, other projects, large and small, are happening -- from the remaking of the Italian Market; to the development by Philadelphia Interfaith Action of 135 new homes for low- to moderate-income, first-time home buyers on 46th Street, north of Market; to the New Kensington Open Space Management Program, which is conveying over 80 vacant and adjacent lots to adjacent homes and businesses for side yards and homeowner parking; to the completion of a new 51-home development in Chinatown. Although many of 1997's projects are only just beginning to get underway, according to the Federal Bureau of Labor Statistics, Philadelphia 00023 MAYOR'S PRESENTATION gained 3,000 jobs between November 1996 and November 1997. After a string of 31 consecutive quarters of job losses dating back to 1988, Philadelphia has now experienced 6 consecutive quarters of job growth. All of this progress demonstrates that people and businesses are believing in Philadelphia again. They are investing in our future, building on what will be city government's most lasting and important contribution to Philadelphia throughout this entire decade, the restoration of hope. )

But make no mistake. While we can all take pride in the achievements of the past year, Philadelphia, like all cities, is still in for the fight of its life. In part, our challenge is budgetary. 8 million fund balance, the continuation of our budget successes is far from certain. Not only do major fiscal threats 00024 MAYOR'S PRESENTATION still lie ahead, but much of our current budget surplus has already been pledged. For example, the city has benefited enormously from President Clinton's Crime Bill. All told, once the final hundred Crime Bill officers enter the Academy this April, we will have added a total of 753 Crime Bill officers to our force. However, Fiscal Year 1999 represents the first year since the inception of the Crime Bill that the city's share of the cost of these officers will exceed the federal subsidy. 8 million more than on our current Operating Budget. million per year. percent. 00025 MAYOR'S PRESENTATION While these solid raises are absolutely justified, in light of the extremely hard work by our municipal work force in helping to turn our city around, these rising compensation costs, including increasing pension and health and Welfare costs, will also add to our massive financial burden. In addition, the city's budget must now absorb the loss of the Personal Property Tax revenues, in light of constitutional challenges to the tax and the threat that bank trust departments would leave the city. But unlike some of our suburban counties, which raised property taxes as much as 29 percent to compensate for the loss of the Personal Property Tax revenues, we tightened our belts and did not raise Philadelphia's rates. million loss in Fiscal Year 1999, with a cumulative loss of over $107 million over the five years of our new plan. Far more sobering than these near-term budgetary challenges, however, is that the 00026 MAYOR'S PRESENTATION city's long-term economic recovery remains vulnerable. We cannot for one minute afford to think that all of our problems are solved. For while our growth is exciting and real, it comes during one of the most robust periods of national prosperity in this country. Even with the slightest down turn in the national economy, the signs of Philadelphia's recovery could quickly fade away. Further, now bearing down on us is the catastrophic impact of federal and state Welfare cuts. Under these grim policies, at least 38,000 former Welfare recipients are being forced to find work in a city where the unemployment level is already twice that of neighboring Montgomery County. What is more, another 43,000 single adults, age to 59, have already lost their state-funded medical assistance. These policies are creating signs of a coming tragedy all around us. Just listen. At our eight District Health Centers, for example, there continues to be a dramatic increase in the number of visits by uninsured 00027 MAYOR'S PRESENTATION patients. In Fiscal Year 1999, the Health Department projects 335,000 health center visits, over 40 more thousand than experienced in Fiscal Year 1995. Further, and damaging fiscally, we project that 61 percent of next year's visits will be by uninsured patients, in contrast to only 44 percent in Fiscal Year 1995. Recent city surveys also show that requests for food assistance increased by percent in November alone. And in some neighborhoods, the increase in requests for food tops 30 percent. And this is in the middle of the strongest national economy in years, and as the cuts are only beginning to hit us. Given these threats and challenges, this is no time to let up. It is true that government can't solve every problem we face. And that is doubly true for a local city government forced to shelter a staggering burden of social and economic problems that the rest of the nation often chooses to ignore. But what we do makes a tremendous 00028 MAYOR'S PRESENTATION difference in people's lives.

And what we do over the next two years can help establish a tremendous foundation for Philadelphia's new century. That is why the budget I am submitting for Fiscal Year 1999 is so important. More than at any other time since I have been Mayor in Philadelphia, we are beginning to shake off our doubters and the remnants of our fiscal crisis. This past year has been one of tremendous achievement, and the future looks even brighter. However, all of us understand that our fiscal stability is the foundation on which we must build our future. The proposed Fiscal Year 1999 budget and new Five-Year Plan holds true to the course that we started and started us along this great recovery. We will continue to live within our means. We will continue to improve the quality of services we provide to citizens. We will continue to lower the costs of living and working in Philadelphia through responsible reductions in municipal taxes. And we 00029 MAYOR'S PRESENTATION will continue to invest in economic opportunity. First, in our basic city services, we are proposing continued enhancement of targeted neighborhood services to improve our quality of life. For most of our citizens, the progress we made as a city government is not measured by the size of a budget surplus or the bond ratings assigned by Wall Street. For most Philadelphians, city government is ultimately about the service it delivers -- more police on the street, graffiti removal, on-time trash collection, the quality of water we drink, and even the creation of an indoor soccer league for our kids. In our proposed Fiscal Year 1999 Operating Budget, we are budgeting for nearly 7,000 police officers. )

This will be the city's largest sworn force in more than a decade, including the 753 new officers we have hired since 1995 with the funding from the Federal Crime Bill. As I noted earlier, the hundred Crime 00030 MAYOR'S PRESENTATION Bill officers who will enter the Academy this spring, and will hit the streets of Philadelphia by the end of the year, will bring us up to the 7,000 mark. As a result of our growing police force, during the past year we tripled the size of the Narcotics Strike Force, from 50 to 150 officers, to crack down on illegal drug activity. We also created the Rapid Response Crime Team, an elite corps of 100 highway patrol officers who work in support of the Strike Force by targeting the violent street crimes in those very same neighborhoods. These initiatives are part of a series of deployment measures that the city will continue in the months ahead, steps that are radically transforming the way we deploy our police to strike ever harder at illegal drugs, violent crime, and the crimes against our quality of life that drain a city's life blood. And already these first redeployment initiatives are working. Just a few weeks ago, the Strike Force and the Rapid Response Crime Team embarked on their first joint mission, attacking street corner 00031 MAYOR'S PRESENTATION drug sales and crime in the West Philadelphia neighborhood centered around 58th and Arch Street. In the first two weeks of that operation, our officers made 81 narcotics arrests, and reports of violent crime in that neighborhood are down by a third. On the street, more than 270 Philadelphia police cars have been outfitted with Mobile Data Terminals. These computers reduce the number of calls being dispatched over police radio and give the officer on the street instant access to important information about the incident or the individual in question. Our officers tell us that these MDTs are terrific new tools to help fight crime. And our proposed budget includes $300,000 for increased data broadcast costs, as we equip over 500 more police cars, including every sector patrol car in the city, by the end of this next Fiscal Year. In addition, the proposed Fiscal Year 1999 budget includes over $528,000 for operational costs associated with the creation of the police department's new Helicopter Aviation Unit. This new unit, projected to be in 00032 MAYOR'S PRESENTATION service by this summer, will help fight crime by taking reconnaissance photos of drug houses, tracking stolen vehicles, and spotlighting suspects at night. Funding is also proposed in FY '99 to outfit ten additional bike patrol officers, which would bring our total complement to 85, two-officer bike patrol units citywide. This investment in more police officers and better crime-fighting tools is critical to improving public safety. But that is not all we are doing. 9 million grant as part of the Federal Local Law Enforcement Block Grant Program. This grant marks the second straight year in which the city has won increased federal support for our efforts to crack down on quality of life crimes that threaten the security of our neighborhoods; crimes like curfew violations, under-aged drinking, truancy, and graffiti vandalism. With the help of the federal grant, we are expanding neighborhood police patrols through 00033 MAYOR'S PRESENTATION additional overtime. And for the first time we are providing funding to support the permanent creation of night courts, the highly effective court program that adjudicates on the same night of the arrest. This grant will also fund a variety of other important anti-crime activities, including expanded crime mapping, additional police computer technology and software, nuisance abatement initiatives, and a number of effective anti-violence programs run by the School District.

Also in our Fiscal Year 1999 budget, we have proposed an additional $70,000 for victim witness support and $500,000 more for the District Attorney to add prosecutors and investigators for narcotics trials and appeals. Every year since Philadelphia first emerged from its fiscal crisis, the Administration and City Council have significantly increased General Fund spending for the police department, from $299 million in Fiscal Year 1994, to a proposed $358 million in Fiscal Year 1999. This represents a total increase of almost 20 percent, and nearly $60 million a year in additional funding for our police department. 00034 MAYOR'S PRESENTATION At the local level we are not just talking about fighting crime; we are doing something about it. But we could use more help from Harrisburg. That's why I call on the state legislature to support the crime fighting initiatives I proposed back in September and which were introduced by Senator Fumo in the state Senate last fall. These include support for a 10 cent surcharge on all local lottery tickets to fund the hiring of an additional 750 new police officers in Philadelphia, and for the state police to assume the patrol of state highways in Philadelphia, like I-95 and the Schuylkill Expressway. State troopers patrol these and other state roads all over in Pennsylvania. Why not in Philadelphia, too? This one measure alone would free up to 50 police officers, to put them back out on the streets. And if we get these officers back, I pledge to you I will immediately add them to the Rapid Response Crime Team, raising it to 150 00035 MAYOR'S PRESENTATION officers, which will help fight crime in our neighborhoods immeasurably. But these are by no means the only measures that we are taking to improve the quality of life of our citizens. The city's comprehensive anti-graffiti campaign continues to make tremendous progress in the drive to wipe out graffiti and vandalism throughout the city. In Fiscal Year 1997, the city's new graffiti abatement teams cleaned or painted over graffiti on 7,520 properties and street fixtures citywide, more than the numbers of properties cleaned in the prior two fiscal years combined. In Fiscal Year 1998, we project to clean 19,000 properties. And in Fiscal Year 1999, we are proposing to increase the funding of this initiative by another $163,000 to staff and supply two more crews. In addition, we are proposing an $82,000 increase for the Mural Arts Program, to help increase the number of new murals painted each year from a projected 37 this fiscal year, to over 60 next fiscal year. 00036 MAYOR'S PRESENTATION In the Recreation Department, we propose to add even more resources to the highly effective Violence Prevention After-School Program, a key component of the Children and Families Cabinet's Youth Violence Prevention Initiatives. This after-school program, funded on a pilot basis in Fiscal Year '97, provides three hours of safe and fun activities after school every day, including creative arts, athletics, and homework support. Well, I don't know how much fun homework support is. In Fiscal Year 1999, we are proposing an additional $750,000 for this initiative. )

And this will build on the increase of $620,000 received by the Recreation Department in this fiscal year's budget. This will bring total city funding of after-school programs to nearly $1.4 million annually, and enable the Recreation Department to serve 3,200 children at 160 sites, including every recreation center with the facilities to accommodate after-school programs. 00037 MAYOR'S PRESENTATION (Applause.)

In addition, the School District is working to put up 40 after-school programs and put them in place by the end of the year. And the nonprofit Philadelphia Citizens for Children and Youth, and a host of other Civic organizations, have pledged -- many in line with the President's summit -- to develop new after-school activities for thousands of Philadelphia children over the next three years. The Recreation Department is also the scene of an innovative new partnership between city managers and the unionized work force. The partnership they created is part of the Reinventing Government Initiative that grew out of the 1996 collective bargaining agreement with District Councils 33 and 47. Last summer, both managers and DC 47 members worked together to expand and promote the department's Summer Meals Program. As a result, 30 more neighborhood facilities participated in the program, over 106,000 more free lunches were served to children in 1996, 00038 MAYOR'S PRESENTATION and breakfasts were added to the program for the first time. Further, because existing rec center staff were able to integrate this program into their overall duties, and because food and administrative costs are covered by the Commonwealth, this expanding meals program is not burdening the city's own budget. To support the continuing improvement of our neighborhood recreation centers, in our proposed FY '99 budget we are adding a total of more than $100,000 in additional funding to provide full-time maintenance at the Hawthorne and Fox Chase Recreation Centers, that were recently upgraded to Class A facilities, and for chlorine purchases for the increased activity at city pools. For the first time in 15 years, each Class A center that we have in the Recreation Department will now be fully staffed. In the Free Library system, the Changing Lives capital campaign is helping to transform the city's 52 branch and regional libraries. And I know many of you in Council 00039 MAYOR'S PRESENTATION have been with me as we reopened branches that were closed and worked on, and improved, and wired for all the new computer technology. And when we reopened those branches, it is a wonderful feeling. In many of our neighborhoods, those library branches are oases of warmth and comfort, where kids come to learn and come for after-school activities, as well. As the temporary closures due to renovations begin to come to an end, we expect that seven more libraries will open in Fiscal Year 1999, as compared to this year. To staff these revitalized libraries, we propose to increase the Free Library budget by more than $672,000, to fund 24 additional employees. Also, we are proposing to add $63,000 to the library's budget to fund regular maintenance of the new roofs placed on librarys in recent years. 6 million William Penn Foundation grant in support of natural lands and restoration and education, we have begun the process 00040 MAYOR'S PRESENTATION of revitalizing our parks. Also, across the city's neighborhoods, the proposed Fiscal Year 1999 budget and Five-Year Plan contain $1 million per year each and every year of the Five-Year Plan for the pruning and care of street trees. Our Children and Families Cabinet begins work this month to move forward with an eight-year, $8 million urban health initiative funded by the Robert Wood Johnson Foundation, a very competitive grant which we won. And it is a community focused partnership to reduce teen pregnancy, teen substance abuse, and youth violence. Also in our Health Department, tremendous progress is being made in an effort to see that Philadelphia's young children are immunized. According to a recently released report by the National Center for Disease Control, 79 percent of Philadelphia's pre-school children are now appropriately immunized, up from only 50 percent three years ago, the largest single increase in immunization among the 50 states and 26 urban areas 00041 MAYOR'S PRESENTATION covered by our report.

And that is something we can all be tremendously proud of. )

Because we have seen in the past Philadelphia children heart-breakingly dying because they did not receive basic immunization that is now available to all. All of this progress is encouraging. We must also do more to manage the devastating impact of federal and state cuts in Welfare and Medical Assistance. To help maintain basic fundamental health care, we are proposing a $1 million increase in the FY '99 budget for the eight district health centers, on top of a $200,000 increase in this present fiscal year, to provide additional staff and supplies. 2 million in state funds for shelter beds since FY '96. 00042 MAYOR'S PRESENTATION Nonetheless, last year we were able to add another 1200 new transitional and permanent housing units for homeless and at-risk families and individuals, bringing our total over the last six years to over 8,000 newly created transitional and permanent units for our formerly homeless citizens. And we were able to increase our job training placements by over 50 percent. In our proposed FY '99 budget, we maintain this commitment to preventing homelessness, adding a proposed increase of $150,000 for case management services in the Office of Emergency Shelter Services. In the Department of Human Services, family preservation programs have been strengthened, while the number of adoptions placing abused or neglected children in new homes increased from 275 in FY '96, to 422 in FY '97. Overall, in Fiscal Year '98, Children and Youth Division staffing is up by an average of 54 social workers over last Fiscal Year. 8 million 00043 MAYOR'S PRESENTATION for costs not being reimbursed by state and federal grants. In September of last year, with the approval of City Council, the Department of Licenses and Inspection hired 11 new inspectors, and plans to hire four more by the end of Fiscal Year 1998. This increase is intended to build on the 27 percent increase in code inspections achieved from FY '94 to FY '97, and to further reduce the risk of fires and other hazards. In conjunction with the fire department's outstanding initiatives to promote fire safety and prevention, fire deaths in Philadelphia declined to 53 in Fiscal Year '97, the lowest total since this statistic began to be tracked more than two decades ago. Finally, in the remainder of Fiscal Year '98 and into Fiscal Year '99, we are proposing to build on L & I's programs with a $1 million, two-year pilot program, a half a million dollars each year, for the demolition of imminently dangerous buildings in the city's targeted Partners for Progress Zones. This pilot will allow Partners for 00044 MAYOR'S PRESENTATION Progress to clear an additional 200 vacant and abandoned structures as part of its efforts to stabilize and improve disadvantaged neighborhoods. This money is in addition to the more than $10 million budgeted for L & I's ongoing demolition program in FY '98 and proposed again in FY '99. Counting the major investments made in recent years, this would bring our total demolition spending since Fiscal Year 1995 to more than $55 million. In addition to those operating improvements, the Fiscal Year 1999 Capital Budget and Capital Program that I am submitting to you today continues our commitment to revitalizing the city's capital infrastructure. In the early 1990s, annual city capital spending was an abysmal 45 percent of what we needed just to maintain, properly and adequately maintain, the city's capital infrastructure. And by the time of our financial crisis, the city's Capital Program had virtually ground to a halt. 5 million. 9 million, an increase of 92 percent. 5 million in city capital funds, representing the seventh straight year in which the city is proposing to invest more than $100 million of city funds on capital projects. A significant portion of the Capital Budget is dedicated to neighborhood projects that will further improve the quality of life for all of our citizens.

6 million for improvements to facilities in Fairmount Park, including Memorial Hall, the Japanese House, the West River Drive Recreation Path, the Belmont Grove picnic area, the Cobbs Creek Recreation Center, Eakins Plaza, Edgely Fields, Parkside, Evans Playground, and the Schuylkill River Park. )

In addition to capital investments in our neighborhoods, the Fiscal Year 1999 Capital Budget also contains funding for a host of infrastructure and economic development projects designed to build on the city's incredible momentum and create jobs, jobs that provide hope and a meaningful stake in the future for all of our citizens. The Capital Budget includes initiatives such as $1.57 million for improvements at neighborhood commercial corridors throughout the 00047 MAYOR'S PRESENTATION city, twice the amount budgeted this Fiscal Year; $4 million for renovations and safety improvements to the Art Museum; $9 million towards the exciting new master plan for Independence Mall, including a new Liberty Bell Pavilion; $12.5 million to support the construction of a regional Performing Arts Center; $2.5 million towards the $6.3 million allocated in the budget for the North Broad Street Streetscape Project; $1 million for site improvements at the Food Distribution Center; and $2.5 million for the Byberry Reuse Plan. The FY '99 Capital Budget will also support projects in business districts throughout the city through such measures as new curbs and sidewalks, improved lighting, and public parking. This year, our proposed Capital Budget incorporates $41.7 million in funding from the proceeds of the city's sale of its port holdings to the state in 1990. As you know, we have waited for the appropriate time to invest the port proceeds. Now, with the booming national economy and the seeds of our own economic development efforts beginning to bear full fruit, we must seize the moment. 00048 MAYOR'S PRESENTATION These funds will help replenish the city's successful economic stimulus program, which has so far retained or attracted over 42,000 jobs. These funds will also provide vitally needed resources for a variety of neighborhood initiatives, including $1 million for West Parkside development, $4 million for the Schuylkill Falls redevelopment, and $3 million for a new moderate-income housing development in South Philadelphia. Together, these significant capital investments will enable the city to continue to improve the quality of life in our neighborhoods, and expand our commitment to job creation, and upgrade the city's facilities for both citizens and city workers alike. Having the ability to support these investments is a direct result of the fiscally conservative management policies that we put in place six years ago. These efforts are crucial to our goal of making Philadelphia more competitive as a place to live and work. But by themselves, they are not 00049 MAYOR'S PRESENTATION enough to turn the tide. We must continue to grow the city's economy and provide new job opportunities for thousands of Philadelphians who, despite our best efforts, still have no hope and no meaningful stake in this city's future. In an effort to attract new business and jobs to Philadelphia, there may be no more single important initiative than the Incremental Tax Reduction Program launched by this Administration and this City Council three years ago. The three rounds of cuts in the city's debilitating Wage and Business Privilege Taxes have sent a powerful message, and that message is simple, the cost of living and doing business in Philadelphia is coming down. (Applause.)

The best news of all is, the gap between the city and the suburbs is closing. And this year we propose to close that gap even further. As you know, last year's Five Year Plan proposed extending the Incremental Tax Reduction Program into a seventh year, well beyond my term as Mayor. 00050 MAYOR'S PRESENTATION This year we propose to extend the tax cut program into an eighth year, to ensure that Philadelphia will continue to grow even more competitive in the years ahead. In addition, the pace of our economic recovery, together with last year's record budget surplus, provides us with a unique opportunity to accelerate the pace of tax reduction on behalf of our citizens and businesses. The original tax reduction plan called for reductions in FY '99 from the current 4.79 percent to 4.715 percent for city residents, and from 3.16 percent to a little under 4.1 percent for non-residents. But because the pace of our recovery is picking up speed and our budget performance has been so strong, today I am proposing that this year we reduce the wage tax by more than we anticipated. I propose to cut the residential wage tax to 4.6869 percent in FY '99 for residents, and to 4.075 percent for non-residents. These cuts represent the largest single-year reduction in the entire tax cut program, nearly 2.2 percent. 00051 MAYOR'S PRESENTATION Although the larger cut was originally planned for FY 2000, we can afford it now, and our citizens and businesses deserve it. (Applause.)

However, while I am proposing this accelerated tax cut in Fiscal Year 1999, I am also proposing a more modest adjustment than originally slated for Fiscal Year 2000. So the rates by Fiscal Year 2001 will be exactly the same as set forth in our prior versions of the Incremental Tax Reduction Plan. This adjusted schedule not only takes advantage of our current fiscal strength, but it will also help us to handle the next round of wage tax cuts in the years ahead, when the city must also fund new labor contracts and manage the impact of Welfare reform. Over the first four rounds of the Tax Reduction Program, from Fiscal Year '96 through Fiscal Year '99, a Philadelphia family earning $30,000 would have saved a total of $184, with an annual reduction for this year of $82. After the full eight years of reductions are in place, that same family's 00052 MAYOR'S PRESENTATION cumulative savings will rise to $671, with $138 in annual savings going forward. In addition, I am recommending that we maintain our original schedule reductions in the gross receipts portion of the BPT tax, which will be cut from 2.875 million to 2.775 million in FY '99. For a representative Philadelphia business with $15 million in gross revenues and before-tax profits of 1.5 million, the first four rounds of BPT tax will have saved over $21,000. After eight years, the cumulative savings will total nearly 68,000, with an annual savings of over $14,000 every year thereafter. For city-based businesses, the new formula for calculating the net income portion of the BPT tax enacted in Fiscal Year 1996 is further improving their ability to compete. And, as you recall, the new formula double-weighted our receipts. The prior formula included things like payroll, property, and receipts evenly. By double-weighting receipts, we have provided a benefit and well over a million dollars of savings to Philadelphia-based businesses. And in this proposed Fiscal Year's 00053 MAYOR'S PRESENTATION budget, I am asking City Council to approve an additional change in the BPT to include in that tax any firm with ongoing activity in Philadelphia. This is something called the Act of Presence Test. And, as you know, up until now firms have legally escaped paying our Business Privilege Tax if they are housed and warehoused and have administrative offices outside of the city, and they send their product in by a third party and sell it in the city. But the Act of Presence test will require those firms who have had a competitive advantage over Philadelphia firms to pay the same BPT, Business Privilege Tax. And I hope that City Council will pass it. (Applause.)

And if we do pass that, that will make two years in a row where we have lowered the competitive disadvantage of Philadelphia businesses competing against businesses outside of Philadelphia, but who come here and take advantage of our citizens and do business here. And that's a major step in shortening that gap that I talked about. 00054 MAYOR'S PRESENTATION Added together, the four years of tax cuts so far, FY '96, '97, '98, and those proposed for FY '99, will save Philadelphia taxpayers a cumulative total of $204 million. And by the end of the eighth year of those cuts, in Fiscal Year 2003, the Wage and Business Tax reductions we have enacted, together with those called for in the current Five Year Plan, will have saved Philadelphia taxpayers a whopping $731 million, nearly three-quarters of a billion dollars in Wage and Business Privilege Taxes. We are closing the gap in Philadelphia because government is committed to a long-term program of rational, sensible tax relief. (Applause.)

As the many initiatives that I have outlined today make clear, we are making real strides in those areas where we control our own destiny -- in reducing waste, improving productivity, improving our infrastructure, cutting taxes, and pooling public and private resources to leverage even more economic development. But as I said in the past, the 00055 MAYOR'S PRESENTATION greatest frustration of being Mayor is that, no matter how good a job we do -- and in partnership with this City Council, under the extraordinary leadership of President John F. Street, we have done a great deal -- but, to a great extent, the city's future rests on forces beyond our control. In those areas, we need help from other governments to solve some of our most pressing problems. Without that help, we will never be able to achieve all of the things that are possible for this city. Let me briefly discuss two of those areas and what we propose to do about them. First is the continuing struggle, a ten-year struggle, to obtain full funding from Harrisburg for the operation of the courts in Philadelphia. There is no question that the state is required to fund the operation of the state criminal and civil courts, as the State Supreme Court ruled more than a decade ago. More recently, in July 1996, the Supreme Court required the legislature to enact a court-funding scheme by January 1 of 1998. That 00056 MAYOR'S PRESENTATION deadline has come and gone, and the legislature continues to defy the court mandate. As a result, the city has been forced to fund the Common Pleas and Municipal Courts at an annual net cost of approximately $130 million. What is more, the city pays $35 million additionally to fund court-related agencies, like the Clerk of Quarter Sessions, the Register of Wills, and the Sheriff's Department. That is $160 million a year that the Pennsylvania Supreme Court says is the Commonwealth's responsibility, $160 million that the legislature has so far chosen to ignore, forcing Philadelphia taxpayers to shoulder this burden alone. Now, think about that for a minute. Just imagine what kinds of programs and services we could fund with an extra $160 million. In a city where federal and state Welfare reform policies will force over 38,000 people to find jobs that simply do not exist, $160 million would be eight times the $20 million in federal funding expected for our Private Industry Council's Welfare To Work initiatives in each of the 00057 MAYOR'S PRESENTATION next two years. And in a city where state legislators have called for more police, $160 million would fund over 2,000 more officers a year. Earlier this month the Supreme Court established a Judicial Council to prepare for the transition from County Court funding to Commonwealth Court funding. The city is committed to working with the Judicial Council in order to bring about a plan for full court funding by the Commonwealth for July 1, 1998. But make no mistake, the Supreme Court's announcements are crystal clear. This funding obligation lies solely in Harrisburg, and the city will no longer shoulder this burden indefinitely. As a result, we have included absolutely no funding for the Philadelphia Courts in the proposed FY '99 operating budget. And it is our expectation that we will see real progress before June 30, including, at an absolute minimum, the first significant financial relief for the city from this unconstitutional 00058 MAYOR'S PRESENTATION burden and a reasonable time frame for the city's development. The city is committed to working with the Judicial Council and the legislature to develop a rational, orderly transition to full court funding. (Applause.)

But if the legislature does not match this commitment and we do not see real and tangible progress over the next few months, at the start of the new Fiscal Year, the city's funding will run out. Now, logic demands that the state assume its responsibility for running the state courts in Philadelphia. But when it comes to the future of Philadelphia's public school children, increased state support is not only logical, it is a moral and constitutional imperative. Few concerns impact the city, its residents, and its businesses more than the quality of public education. Our local tax dollars support the School District of Philadelphia. Our businesses 00059 MAYOR'S PRESENTATION rely on the School District to train and educate its work force. And our city depends on the School District to prepare our children to be productive members of our community. If Philadelphia is to fulfill its promise as a great American city, then it absolutely must provide a quality education for the nearly 215,000 children who attend its public schools. Unfortunately, the task of educating America's young has become far more challenging, and it is especially different in an urban setting such as Philadelphia. Superintendent Hornbeck is right, every child can achieve at high levels. However, there are also extraordinary hurtles that far too many of our city's school children face each and every day: Poverty, unemployment, violence, substance abuse, teenage pregnancies, lack of insured health care. And the breakdown of societal institutions have absolutely decimated much of the world outside our classrooms. Under these circumstances, it is often difficult for even the most motivated students to learn and the most extraordinary educators to 00060 MAYOR'S PRESENTATION teach. Yet, despite these obstacles, many of our students and teachers do persevere. Although, as the Pew Charitable Trust's recent report on urban schools points out, there are no urban school systems in the nation today that can honestly make the claim that they have completely turned the corner. The School District of Philadelphia is certainly headed in the right direction. (Applause.)

Over the past three years, the School District has implemented full-day kindergarten for every student for the first time in our city's history, enhanced school safety through the Safe Corridors Program and the addition of 75 more School-District-funded police officers, surveillance cameras, metal detectors, accommodation rooms, and other disciplinary programs, imposed tough new education and testing standards for students, and an equally stringent system of accountability for administrators and teachers, increased staff training hours, and made more computers available than ever before. In fact, today there is 1 computer 00061 MAYOR'S PRESENTATION for every 10 students, as compared to 1 for every 30 students just three years ago. In addition, the School District has dramatically increased private fundraising and public grant awards, raising almost over $150 million over the past three years. It has enlisted the support of over 10,000 volunteers and, with the help of this City Council, made extra funds available to ensure that every child has textbooks in English, math, science, and social studies. There can be little doubt that these improvements are starting to pay dividends. The results of citywide testing in 1997 showed increases in student achievement at many levels, particularly among the city's fourth graders. Over 200 of the district's 259 schools showed improvement over the previous years. Reading and science test scores are up. Now, some may categorize these improvements as modest. And the truth is that far too many of our public schools are still achieving at unacceptably low levels. However, improvement of any kind is more than can be said in most urban school districts 00062 MAYOR'S PRESENTATION around the nation. Even USA Today has noticed, reporting that Philadelphia's, quote, Schools have achieved in three years what few, if any, urban schools can claim, higher test scores. The Boston Globe described Philadelphia's public schools as, quote, A typical story of shattered illusions in the innercity, except for one thing, Philadelphia's scores are starting to rise. The simple truth is that progress has been made, but more progress needs to be made. Without adequate resources, however, it will be incredibly difficult for the School District to continue to achieve the results that we expect. Although it is true that money alone cannot solve all the problems we face in our educational system, more money would and will make a significant difference. Just ask our neighboring suburban school districts. During School Year 1995-1996, they spent an average of $2,046 more per student than in Philadelphia. Just think for a moment what an extra 00063 MAYOR'S PRESENTATION $60,000 would do for every classroom of 30 students in Philadelphia. In addition, consider the following: Despite the fact that Philadelphia's children come to school poorer and more in need of health care and other basic services than their suburban counterparts, Commonwealth funding of Philadelphia public schools, both in absolute terms and in comparison to other districts in the state, has actually declined, even while enrollment in our schools has increased by more than 10 percent over the past five years. There are more than 20,000 new students alone in our School District. And these 20,000 by themselves would comprise the third largest School District in the Commonwealth of Pennsylvania. million in this current Fiscal Year, as well as an additional $150 million over the past five fiscal years. million in this current fiscal year, and an additional $386 million over the past five fiscal years. million in the current fiscal year, and $261 million over the past five years.

Without adequate resources, the School District simply cannot continue to provide full-day kindergarten, comprehensive daycare, the Latin program, museum education, secondary school extra-curricular activities, or the host of other programs that are so critical to our children's education. And do not think for a moment that there are any easy solutions, such as just cutting waste in the District's administration. Thanks to the work of the district's Private Sector Task Force in Management and 00065 MAYOR'S PRESENTATION Productivity, headed by Dick Smoot, a task force very similar to the one I created back in 1992 to help us root out waste in city government, the District has saved more than $29 million over the past two years. And by the end of the next school year, the School District will have already cut more than 300 administrative positions since the school year of 1990 to 1991. As a result, the district now spends less on its budget on administration and more on classroom instruction than the average for all 500 other school districts in the Commonwealth of Pennsylvania. I want to repeat that. I want to repeat that, because it is so important for our people, for the media, for the legislators to understand that. As a result of these changes, the district now spends less on its budget on administration and more on classroom instruction than the average for all 500 other school districts in the Commonwealth of Pennsylvania. Further, the taxpayers of 00066 MAYOR'S PRESENTATION Philadelphia cannot solve this problem alone. We already shoulder a disproportionate share of the cost of public education. Despite our overburdened tax base, the city's taxpayers contributed more than $560 million to the School District last year, including the second consecutive $15 million Supplemental Appropriation Grant approved by this Council, and nearly $34 million as a result of a tax lien sale. This also included close to $20 million in the Liquor By The Drink Tax, which has proved to be such a success. And that does not include the more than $70 million in city services that we provide the district, ranging from school crossing guards, to the discount rates provided by our Water Department and PGW. Although this city and its taxpayers are already doing all this for our public schools, today I am proposing that we do even more. In Fiscal Year 1999, for the third year in a row, I propose that the city provide another special Supplemental Appropriation Grant of $15 million to the School District. )

That means that in addition to the more than half a billion dollars of local support already provided annually by city taxpayers, we will have provided the District with an extra $45 million in Supplemental Appropriations during the past three years alone. This is not as much as the district needs, and it is probably more than the city can continue to afford, but we simply must do all we can for the sake of our city's school children. Unfortunately, if the Commonwealth does not do its part, even this may not be enough. According to a recent report by our city controller, the District faces a budget deficit in FY '99 that could reach as high as $137 million. To put this gap in perspective, if we eliminated full-day kindergarten, comprehensive daycare, and all of our desegregation funding, that would save the district only $50 million. Eliminating every single dollar of administrative expense would not come close to saving $137 million. Last year the School District, with 00068 MAYOR'S PRESENTATION my unequivocal support and that of this City Council, drew a line in the sand. Together we said that we could no longer tolerate cuts in school-based programs. We realized that further cuts would decimate critical school programs and activity, and quite literally destroy all the progress and momentum of the past several years. Instead, we adopted a zero growth budgetary strategy, and committed to a School District budget that represents the absolute minimum required to meet the District's further and fundamental educational obligations. We also took extraordinary steps to compel the Commonwealth to live up to its constitutional and moral responsibility to our kids. In the spring of 1997, the School District, along with the city and other plaintiffs, including the Philadelphia Chapter of the NAACP, instituted a new lawsuit against the Commonwealth for violating its constitutional obligations to provide a thorough and efficient education for all of the city's school children. 00069 MAYOR'S PRESENTATION This lawsuit is in addition to the long-running desegregation case, which was concluded before Commonwealth Court Judge Doris Smith last summer. In that case, which is now before the Supreme Court, with oral arguments set for next month, Judge Smith ruled that the Commonwealth had indeed underfunded the School District. This year we expect to bring yet another lawsuit against the Commonwealth. This Title 6 Complaint will be filed in Federal Court, and will charge the Commonwealth with violating federal Civil Rights Law by shifting funding away from Philadelphia, which has the largest concentration of minority students in the state. While none of us relishes the prospect of having to sue the state to compel it to bear its responsibilities and to honor those responsibilities, the fact is, we are left with simply no choice. The only real answer to the School District's funding problems is for the state to step up and assume its constitutional and moral responsibilities by adequately funding public 00070 MAYOR'S PRESENTATION education in Philadelphia. Resolving the school funding crisis and restoring public confidence in Philadelphia's public schools is absolutely essential to our city's future. Six years ago I stood right here at this podium and declared that we all had to share short-term pain and sacrifice to reclaim our city's future. I said that if we did that, we would succeed beyond anyone's expectations. Either way I was convinced that we had no choice. We had to succeed, because the consequences of failure six years ago were too devastating to even consider. During the early years of my Administration, I learned to appreciate one of the city's greatest assets, something that convinced me that we could turn Philadelphia around, and that was the confidence of our people and their willingness to help us out of our financial crisis, even though they had nothing to do with creating it.

By and large our citizens have willingly endured the sacrifices we asked them to make because they understood that it was necessary 00071 MAYOR'S PRESENTATION for the city to survive. We relied on the faith of our citizens to give us the time and opportunity to turn the city around. And in 1997, like no year since I have been Mayor, we were able to reward that faith. It was a year in which the city began to reap the rewards of six years of working together to solve our problems and learning to put Philadelphia first. The results have been well worth that effort. We have balanced our budget and produced record surpluses. We stand ready to cut taxes for the fourth year in a row. We have reversed the exodus of jobs out of the city. We have increased the size of our police department to a level not seen in over a decade. And we have at last begun to see measurable progress in the battle to reform public education. All in all, working together, we have produced a recovery that the New York Times last month called, and I quote, One of the most remarkable turn-arounds in recent American urban 00072 MAYOR'S PRESENTATION history. It is undoubtedly true that there are tough challenges ahead for Philadelphia -maintaining the discipline necessary to keep our financial recovery on course, finding jobs for the thousands of Philadelphians who will need them if they have any shot at a meaningful future, continuing the comprehensive effort to reduce crime that threatens the safety of our neighborhoods, and confronting the funding crisis that threatens to shut down our public schools and destroy all the progress we have made so far. These challenges are cause for serious concerns. But if we learned anything in the past six years, it is that Philadelphians do not mind a challenge. When put to the test, Philadelphians will work together and sacrifice for the city we all cherish. It is in that spirit, it is that very spirit that has helped us get this far. And we have also gotten this far because this Administration and this City Council have cooperated in a way that the citizens of this city have never seen. 00073 MAYOR'S PRESENTATION We have worked together and put aside often our own desires or our own agendas, and put Philadelphia first. And as Council President Street often says, when we work together, we can do anything and we can accomplish anything. And without a doubt, that, and the forebearance and confidence and willingness of our people to move Philadelphia forward, is the biggest reason why I believe Philadelphia's brightest days remain ahead. Thank you very much. )

The Chair recognizes Councilwoman Verna.

Thank you, Mr. President. I move that Council stand adjourned until Thursday, February 5, 1998, at 10:00 a.m. (Duly seconded.)

All in favor let it be known by saying aye. Those opposed say nay. This Council stands adjourned until Thursday, February 5, 1998, at 10 o'clock a.m. 00074 MAYOR'S PRESENTATION (Stated Meeting adjourned at 11:45 a.m.) 00075 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, January 27, 1998, were reported fully and accurately by me, and that this is a correct transcript of same. RE: STATED MEETING _____________________________________ DEBRA A. WHITEHEAD, RPR