COUNCIL OF THE CITY OF PHILADELPHIA STATED MEETING AND MAYOR'S ANNUAL BUDGET MESSAGE Tuesday, January 29, 2002 10 o'clock a.m. Room 400, City Hall Philadelphia, PA PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO PATRICIA RAFFERTY, Deputy Chief Clerk VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 1/29/02 STATED - GREETING/INVOCATION
Good morning, everyone. I note that the hour has come and that a quorum of this Council is present. Council will come to order, members will take their seats, and visitors will retire to the seats outside the rails. To give our invocation this morning, the Chair welcomes Father Thomas Herron, Pastor of Good Shepherd Roman Catholic Church. He is here today at my invitation. Members and of guests will please rise. (All rise.)
Thank you, Council President Verna, for this invitation. Before I pray, I would like to take this opportunity to thank Jeffrey Lurie and his wife, Christine, Joe Banner and the entire administration, Andy Reid and the coaching staff and the Philadelphia Eagles players for the outstanding season and bringing a spirit of joy and a winning tradition to our city. Let us pause for a movement of silent reflection. (Brief pause.) 1/29/02 STATED - GREETING/INVOCATION
Heavenly Father, pour out your Holy Spirit upon Mayor John Street and the members of the City Council of Philadelphia. Give them your wisdom, your truth, and your life. The residents of this City of Brotherly Love have been changed and will continue to be changed by the decisions of the Mayor and the decisions of the City Councilmembers. You can decide to be angry, vindictive, vengeful, hateful, becoming enemies and poisoning the well of this city. You can also decide you can't do anything and go back to your trivial pursuits, as if tomorrow were no different than the day before. Or you can rise to the challenge and pledge your hearts to a higher calling and unite in your efforts. You can answer to the better angels of your nature and join in a shared struggle on behalf of the friends and neighbors who occupy the City of Philadelphia. May all of us listen more attentively to the voice of God within us, as ever before. May we heed God's urgings with acts of kindness and compassion and deeds of love and forgiveness. May the light of God surround all of us. May the love 1/29/02 STATED - GREETING/INVOCATION of God enfold us, the power of God protect us, and the presence of God watch over us, wherever we are. And we make this prayer to You, our Heavenly Father, forever and ever. Amen.
Amen The Chair thanks Father Herron for his very inspiring invocation. Council will be at ease. (Council stands at ease.) (Proceedings resume.) 1/29/02 STATED - JOURNAL APPROVAL
The next order of business is the approval of the Journal of the meeting of Thursday, December 20, 2001, and the Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that the Journal of Thursday, December 20, 2001 stand approved. (Duly seconded.)
It has been moved and properly seconded that the Journal of the meeting of Thursday, December 20, 2001 stand approved. All in favor will indicate by saying aye. Those opposed? The ayes have it and the Journal of the meeting of Thursday, December 20, 2001 has been approved. 1/29/02 STATED - LEAVES OF ABSENCE REQUESTS
The next order of business is requests for leaves of absence, and the Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. This morning, there are no requests for leaves of absence on the part of the Majority.
The Chair thanks the Councilwoman. The Chair recognizes Councilman O'Neill.
Madam President, on behalf of the Republicans, there are no requests for leave of absence.
The Chair will dispense with the regular order of business to recognize guests and visitors joining us in chambers this morning. On behalf of all members of City Council, I welcome you to our Council session today. We appreciate your taking the time to join us as we attend to the legislative affairs of our city. We certainly invite you to come again. 1/29/02 STATED - COMMUNICATIONS
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.
To the President and members of the Council of the City of Philadelphia, I am pleased to advise you that I have signed all of the bills that were passed by Council at its session on December 13, 2001, except 010646. And I have also signed all of the bills that were passed by Council at its session on December 20, 2001, except 010493-A, 010690-A, and 010694. 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 2003 through 2007 and incorporating proposed changes with respect to Fiscal Year 2002, which is to be submitted by the Mayor to the Pennsylvania Intergovernmental Cooperation Authority pursuant to the Intergovernmental Corporation agreement authorized 1/29/02 STATED - COMMUNICATIONS by an ordinance of this Council and approved by the Mayor on January 3, 1992. 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 by making technical amendments, all under certain terms and conditions. And an ordinance amending Chapter 19-1800 of the Philadelphia Code, entitled "School Tax Authorization," by amending Section 19-1806 to further authorize the Board of Education of the School District of Philadelphia to impose a tax on the use or occupancy of real estate within the School District of Philadelphia. " And an ordinance amending Chapter 19-1801 of the Philadelphia Code to further authorize the Board of Education of the School District of Philadelphia to impose tax on real estate within the City of Philadelphia and to change the tax rate, under certain terms and conditions 1/29/02 STATED - COMMUNICATIONS And an ordinance amending Section 19-1301 of the Philadelphia Code, entitled "Real-Estate Taxes," to decrease the rate of tax on real estate within the City of Philadelphia, under certain terms and conditions And an ordinance amending Section 19-2604 of the Philadelphia Code relating to tax rates, credits, and alternate tax computation for the business privilege tax by reducing certain tax rates and by making technical amendments, all under certain terms and conditions. And an ordinance to adopt a Capital Program for the six fiscal years 2003-2008, inclusive. And an ordinance to adopt a Fiscal 2003 Capital Budget. And an ordinance authorizing transfers in appropriation for Fiscal Year 2002 from the General Fund to certain or all City offices, departments, boards, and commissions, and from the Grants Revenue Fund - the Director Finance to certain or all City departments, boards, and commissions. And an ordinance authorizing transfers in appropriation for Fiscal Year 2002 within the 1/29/02 STATED - COMMUNICATIONS Aviation Fund from certain or all City offices, departments, boards, and commissions to certain City offices, departments, boards, and commissions. And an ordinance authorizing transfers in appropriation for Fiscal Year 2002 within the Grants Revenue Fund from the Director of Finance Provision for Other Grants to the Police Department, the Board of Trustees of the Free Library of Philadelphia. And an ordinance authorizing transfers in appropriation for Fiscal Year 2002 from the Grants Revenue Fund - the Director of Finance, the Director of Finance Contribution to the School District. And an ordinance adopting the Operating Budget for Fiscal Year 2003. And to the President and members of the Council of the City of Philadelphia: I am returning herewith as disapproved Bill No. " Council passed this bill at its session on December 20, 2001. 1/29/02 STATED - COMMUNICATIONS And I am returning herewith as disapproved Bill No. 010493-A. Council passed this bill at its session on December 20, 2001.
The messages will be printed in the Journal. The clerk will read any other communications in her possession.
That's all I have, Madam President. 1/29/02 STATED - ADJOURNMENT
Thank you, Madam President. Madam President, I move that Council stand adjourned until Thursday, February 7, 2002. (Duly seconded.)
It has been moved and seconded that Council stand adjourned until Thursday, February 7, 2002. All in favor will say aye. Those opposed? The ayes have it, and Council will stand adjourned until Thursday, February 7, 2002, at 10 a.m. I would ask all Councilmembers to please remain in their seats. The Mayor will be coming up to deliver his budget message. (Proceedings end at 10:15 a.m.) 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE
In keeping with the practice established over the years, we have many distinguished visitors here today who are elected officials: Heads of departments, boards, commissions, and many representatives of the Administration. Although I would like to single out each of you, owing to the constraints of time today, we will be unable to mention each dignitary by name. Please know that we are duly appreciative of your being with us. We want to extend a warm welcome and to offer our thanks for all of the good work that you do. We appreciate your presence. At this time, I would like our distinguished guests, elected officials and representatives of the Administration to please stand so that we may acknowledge you with a round of applause. Please stand. (Applause.)
The time has come for us to considerate the Mayor's presentation of his annual budget message. The Philadelphia Home Rule Charter states that "the Mayor shall submit to 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Council not later than 90 days before the end of the fiscal year his operating budget message and a proposed operating budget ordinance for the ensuing year. At the same time, the Mayor shall submit to Council the recommended capital program and capital budget as received from the City Planning Commission to the extent approved by the Mayor." I now appoint the following committee to escort the Mayor into the Council chambers: Councilwoman Blackwell, Councilwoman Tasco, and Councilman O'Neill. Please proceed. (Councilmembers escort Mayor Street into Council chambers.)
Ladies and gentlemen, I am pleased to introduce the Mayor of the City of Philadelphia, Mayor John F. Street. (Applause.)
Thank you. Council President Verna, members of City Council, members of my administration, special friends and guests, good morning. 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE
Last January, I stood before you and proudly announced, we are a government that gets things done. 2001 was a year of difficult challenges. Nevertheless, it was a year of accomplishment. Sustained by our shared ideals and nourished by the pride we have in our great city, we continue to make progress on behalf of the people, the businesses which employ our workers, and the great region of which we are a vital part. Today I can modify my statement from a year ago and say: We are a government that gets things done despite a series of difficult challenges -- despite a national economic downturn and the abrupt end to the longest period of economic expansion in the history of our city; despite a challenging political environment; despite the escalating security costs and the emotional trauma caused by the tragedy events of September 11th. Vince Lombardi, the legendary coach of the Green Bay Packers, used to tell his players, "When 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE the going gets tough, the tough get going." During the year 2001, we proved our toughness, we refused to let the rough economic climate impede our progress. We managed the affairs of the City with unwavering commitment to our vision for a better Philadelphia. We moved closer to this vision by: forging a historic agreement with the Commonwealth in securing a better, brighter day for pur public school students and their families; creating jobs by attracting entrepreneurs looking for a progressive, pro-business environment; protecting and strengthening the hospitality industry; making our neighborhoods cleaner, safer, and more beautiful; and remaining faithful to our pledge to make every year in Philadelphia "The Year of the Child." Tough times inevitably create new imperatives. If we are to succeed, we must maintain our focus, sustain our discipline, and remain undeterred in our vision. We must never forget that the ideals 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE uniting us are far more important than the details dividing us. At the end of the day, we are all on the same side -- the side of the city we love and the people we are privileged to serve. Now more than ever, we need a partnership for progress. If we continue to invest in our neighborhoods, strengthen our economy and approve our school, real partnership is essential. The aftermath of the events of September 11th provide a valuable guidance in forging this partnership for progress. In the difficult days and months following the tragedy, our nation demonstrated just how much we can do when we cast aside petty politics, work together, and devote ourselves to the common good. The horror and anger ignited by the terrorist attacks on the World Trade Center and the Pentagon have only redefined the American experience; they also ignited acts of bravery, valor, and compassion that distinguish us as society. The Philadelphia response of September 11th is exemplified of the work of the United Way of Southeastern Pennsylvania, the Red Cross, and the 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE firefighters and other rescue workers, who were among the first non-New York on the scene. When I met them upon their return from Ground Zero, they were exhausted, emotionally spent, and very, very proud. Today we have with us Lieutenant Fred Endrikat,who led the recovery effort for the first several days at Ground Zero. Please help me welcome him and say thanks to the United Way, the Red Cross, and the men and women who volunteered in our time of national need. (Standing ovation.)
Thank you. Thank you, Lieutenant. The coming year presents an array of complex challenges. The $3.1 billion General Fund Operating Budget I present today sustains our long-standing commitment to incremental tax reductions, which have saved taxpayers more than $875 million in wage and business taxes since 1996. As you will hear, in FY '04, we propose to restructure our tax reduction program to provide a stronger stimulus to our business community, attract more jobs, and expand our tax base. For the moment, however, let me 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE acknowledge our Council of Economic Advisors: Philadelphia Reserve Federal Reserve Chairman Anthony Santomero, Robert Inman, William Stull, David L. Cohen, and Steven Sanders. They have volunteered considerable time to the study of our tax structure and our economy. Their advice helped shape key provisions of this budget. Members of the Council, I ask you to please stand. (Applause.)
And thank you for your help. Neighborhoods transformation, however, remains at the heart of my vision for a better Philadelphia. Although we have not as yet unleashed the full potential of NTI, we have generated inspiring activity in neighborhoods throughout the City. We have cleaned 17,557 vacant lots, hauled 11,099 tons of debris, and removed well over 100,000 abandoned vehicles from the streets of Philadelphia. In addition, we have visited with the owners and managers of more than 260 neighborhood-based businesses. We are making progress, making a difference. I see it firsthand when I visit 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE neighborhoods, walk the streets, and talk with residents and local business owners. They appreciate what we are doing. We want what they want: Safe, clean neighborhoods; open spaces where beautiful gardens grow and healthy children play; neighborhoods live with pride and hope. Today, we are fortunate. We have with us some of our most important community caretakers in our caretaker program. We have with us -- and I will ask you to please stand -- Celestine Brinkley Theresa Johnson, Peggy Hock (ph), James Stanley, Dorothy Perrine, Mary Turtle, Wally Prichard, Julie Chin, Anthony Marshall, Leon Chambers, Dennis Kelly, and Kathy Harris. Let's give them a hand. They are making a difference in our neighborhoods. (Applause.)
Thank you so much for being with us. In spite of all we are doing, we must do more. Blighted neighborhoods are an open wound in our city, breeding violence, drugs, disease, and despair. Let us act together to heal these wounds so that our neighborhoods thrive and people enjoy the quality of life they deserve. 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Let's remember: Sustained economic growth requires a city which appeals to both employers and employees, a place where people want to raise their children and spend their leisure time. Neighborhood transformation is an economic stimulus. It is essential not just for currents residents, but also for those considering a move to our city, whether for residential or business purposes. Accordingly, I respectfully request that together we amend the current neighborhood transformation legislation in ways that respect the aspirations of the people of our city, advance the cause of attracting entrepreneurs, and incorporate the priorities of eliminating blight, protecting the strong neighborhoods of this city from the insidious incursions of vacancy and abandonment. While we have worked diligently to find common ground on NTI, make PGW more responsive to the people who depend on it, and stabilize the Philadelphia School District, we have not averted our attention from the creation of jobs, the continuing expansion of downtown, and the protection of our status as a premiere destination city. The new FedEx Distribution Center in Grays 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Ferry, the Kvaerner Shipyard in South Philadelphia, the TJ Maxx warehouse in the Northeast, the Philadelphia Eagles football stadium taking shape as you drive down I-95, the commitment by Willard Rouse to build the first skyscraper downtown in 20 years, and the announcement of the plan for the Comcast Pier at Penn's Landing, including the long-awaited Please Touch Museum, and the tram connecting Camden and Philadelphia. All of this is evidence of our success in creating a business and developerfriendly environment which produces jobs for our city and region. We are also heartened by the pending acquisition of A&TT's cable division by Comcast Corporation and the decision by Citizens Bank to make our city a center for its operations. Thanks to the Greater Philadelphia Chamber of Commerce, the Delaware River Port Authority, and the Greater Philadelphia First, who work with the Commerce Department and PIDC to give life to many of these initiatives. With your support, we are confident we can build on this success in the next fiscal year. Innovation Philadelphia is one of the keys to this success, and the funds you authorized last 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE year made it possible for to us attract a respected individual like Richard Bendis to our city. Innovation Philadelphia is a forward-looking public/private partnership designed to establish Philadelphia as a world-class leader on the cutting edge of the knowledge-based economy. This initiative has one simple mission: To place us ahead of the curve, to attract 22nd-century enterprises. Our most valuable asset and partner in this venture is our city's higher education community, which is attracting the very best and brightest minds to study, work, and live in our city. Innovation Philadelphia will focus on job creation and tax-base expansion. The seeds we plant today will invigorate economic growth tomorrow. Dr. Judith Rodin, President of the University of Pennsylvania, who chairs the Innovation Philadelphia Board is with us today. Judith, please stand, and let's welcome her to this Council today. (Applause.)
As a result of her leadership, Innovation Philadelphia, PIDC, PCDC, and 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE the Commerce Department have bonded into a strong economic development catalyst. The progress we are now experiencing are signs of the City's capacity to weather the recessionary storm our nation is now enduring. Just think about it: There was a time -- not very long ago -- when national economic downturns hit our city more severely than the nation as a whole. This time, it's different. We will survive and thrive. Our success will depend on a continued willingness to make tough decisions like the 1.5 percent reduction in personal expenditures mandated for every government department that will require a continuation of the discipline with which our commissioners and directors have managed the affairs of our city. It will require the same fiscal prudence we brought to labor negotiations. Because of our willingness to face hard questions and make tough decisions, we are now positioned to defend ours against economic turmoil. Other cities are curtailing public services, freezing tax reductions, and struggling to cope with unemployment. We are not immune to this damage, but we are well protected: 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Our fiscal discipline has produced a fund balance of $230 million. Our rate of job loss from November 2000 through November of 2001 was less than a third of the national rate. Our relatively low cost of delivering services, a product of streamlining our delivery system and instituting a variety of cost-saving measures, has made it possible to fund all services at or above current levels. In the face of cataclasmic jolts to the national economy, our city is displaying remarkable resiliency. Last week, it was reported that the hospitality community in Philadelphia has recovered from the downturn in convention and tourism business faster than any other city in America. Tremendous credit should be given to the leaders of the hospitality community, who, along with Comcast, DRPA, and other important corporate citizens, fashioned the weekend hotel package, that great commercial featuring the slogan "Philadelphia is more fun when you sleep over." I deeply appreciate the commitment of our hotel and parking operators, restaurants, cultural 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE venues, and everyone who is pitching in to make the complain, which runs through March 31st, a great success. Meryl Levitz, Bruce Crawley, and Tom Muldoon are here. Let's give them and the other leaders of our hospitality community a round of applause. (Applause.)
Thank you. Visitors are returning, and our traffic at the Philadelphia International Airport now stands at more than 90 percent of its pre-September volume. The opening of the Kimmel Center for the Regional Performing Arts and the International Visitors Center, the powerful reading of the Declaration of Independence by a group of international celebrities, the United Nations Secretary General Kofi Annan's receipt of the Liberty Medal, President Bush's visit to our faith-based programs and help us celebrate America's 225 birthday; all of this testifies to our status as a world-class city with world-class amenities. However, our momentum will stall if we do not find a way to better support our hospitality industry, which provides our region with 43,000 jobs 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE and a payroll in excess of 1 billion. These 43,000 job holders live in every neighborhood of this city. They include 3,000 proud members of Local 274, who work in hotels, restaurants, sporting venues, and catering facilities. The hospitality industry is a leading employer of our nation's most vulnerable workers, including welfare-to-work participants, single mothers, and immigrant workers. C. requesting tax incentives for travelers or other incentives to get heads in beds. Like the airline industry, hotels face a bleak future unless help arrives. Our hotel industry, hit especially hard after September 11th, is an employment-producing machine, a catalyst for economic growth. Now is the time to recognize its importance to us in our economy. Now is the time to reach out to our friends in Harrisburg and the region and agree to expand the Pennsylvania Convention Center. Our center is among the finest in the country, but cities like Boston and Washington are expanding their facilities. In this business 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE climate, you grow or die. I invite to you join this effort and improve and expand our center. It cannot be done without your support. And although there is no specific requests in the budget presented today, this issue will require further discussion soon. Let me state for this record, our labor community will be a valuable ally in expanding our Convention Center. We have made real progress pursuant to the project labor agreement we signed last year. And Bob Butera, the CEO of the Center, Billy Corazo, and many others deserve recognition for our progress. We all agree that Philadelphia must remain competitive in the hospitality community, and the leaders of every union in our building have assured me they will work to resolve any outstanding issues, including the issue of costs. We cannot expand our Convention Center and the related businesses it attracts unless we are customer-friendly and cost-effective. We are periodically reminded -- sometimes by members of this body -- of the middle-class exodus from our city, especially during the '90s. We are fighting back. My confidence is buoyed by 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE the fact in 2001, we experienced the hottest residential housing market in this city in 80 years, proof that our tax-abatement programs are creating an enticing environment for developers and homeowners. On the waterfront, Center City, around our colleges and universities and in many neighborhoods, we have new and compelling evidence: If we build it, they will come. Every new amenity available in our city contributes to the rebuilding of the middle class, which is essential to the future and prosperity of our city. 2001 had its challenging moments, and I stand before you today, a little bruised, but nevertheless proud that we have made progress in this year. The highlights I have described are snapshots of our progress.
Together, those snapshots are a window into the soul of a government determined to improve the quality of life in Philadelphia, to create a city that is attractive, comfortable, and safe, a city where people want to live, work, visit, raise their children, and pursue their dreams. The challenge of implementing this vision 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE of a better Philadelphia will demand a new culture of collaboration, an agenda rooted in shared ideals that will allow leaders in the Pennsylvania General Assembly, City Council, and the Mayor to work together in the kind of partnership Governor Schweiker and I fashioned around public education in Philadelphia. We cannot allow the politics of personality to get in the way. I stand ready and willing to work with Democrats and Republicans to fashion a partnership for progress that stretches not only throughout our city but throughout our Commonwealth. Nothing illustrates the need for partnership and the value of partnership better than the historic agreement we reached with the Commonwealth regarding the governance of public education. The School Reform Commission, the Governor and I appointed has now been seated. I want to thank the Commission members for agreeing to serve and welcome them here this morning. Chairman Jim Nevels, Jim Gallagher, Dan Whelan, Sandra Dungee Glenn, and Mike Masch, please stand and let us welcome you here today. )
This commission will make decisions that will affect the lives of hundreds of thousands of children and their families and influence the course of this city for years to come. I believe the Governor and I have assembled a quality team, worthy of public trust and confidence. I also believe public education in Philadelphia can be better, must be better, and will be better if it receives the broad public support it deserves. I have spent considerable time with SRC Chairman Jim Nevels, and I believe we share common goals, even though we may not always agree on the details. My appointees to the SRC have assured me they will work with their new colleagues as a constructive force for reform that gives our students a better chance to compete. We all agree the status quo is unacceptable. We need smaller class size, better facilities, better implemented programs, smart technology, and better support of teachers, with a fair, far more friendly learning environment. Teachers and students alike must be safe and properly supported. 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE I know there are powerful feelings among some legislators and education advocates favoring exclusive local control of public education. Exclusive local control is also my preference. However, I assure you, this city will continue to have its say about future public education. Through my own personal efforts and those of my appointees to the SRC, through the work of our local Secretary of Education, through the outreach of a reconstituted and expanded Board of Education, through the vigilance of our students, parents and, community members, through the deeds of our School District employees, and of course, through the commitment of this Council, our voice will remain strong and effective. (Applause.)
Thank you. But after two years of non-stop dramatic changes in School District policy, changes that included new leadership, a longer school day, a more uniform curriculum, significant labor contract reform, establishment of 39 charter schools, budget saving of about $50 million, and an administrative reorganization that put teachers back in the 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE classroom, it nevertheless became clear that the City and School District could no longer go it alone. Lurching from one crisis to the next, it made for an unstable environment, jeopardizing some of our most promising reforms: Smaller class size, a more demanding curriculum, a safe orderly school environment, and the use of instructional technology to facilitate learning. If we were going to sustain these reforms and offer children the quality education that is their sacred right, we needed a new partnership with the Commonwealth, a partnership on behalf of continued reform and additional State funding. The agreement I reached with Governor Schweiker did not come easy. Our negotiations were intense, candid, and honest. I thank Governor Schweiker for his leadership, commitment, and courage in bringing our talks to a positive conclusion. I am also thankful to him for his unprecedented pledge to request $75 million of new money to support our public schools in his '03 budget. The agreement does not answer every 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE question and address every concern: It does not provide a clear direction for the future of charter schools, which offer valuable public school options but have contributed significantly to the School District's financial deficit. It does not provide the long-term financial stability we need, which will come only through statewide reform of public school funding. It does not guarantee we will like every decision the SRC makes. It does not define the role of Edison, a matter on which the Governor and I honestly disagree. I have grave reservations about taking substantial public dollars that could go toward upgrading teaching materials or reducing class size and diverting them to a private for-profit company with little experience. This is, very simply, not a wise use of educational dollars. (Applause.)
Nevertheless, nevertheless, our agreement with the Commonwealth brings necessary change: It does give the City a significant 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE role and a meaningful say in the policies of the School District. It does protect the City treasury by capping the City's financial commitment; and most importantly it does give children, parents, school employees the certainty they need and deserve: Our schools will open on time and will remain open without interruption throughout the entire school year. Let me share for a moment the financial terms of the agreement. During the current fiscal year, as soon as we secure legislative clarification on the recapture provisions of Act 46, I will submit a transfer ordinance and ask you to approve one-time grant of $45 million to the School District. This grants would fulfill an earlier commitment to Governor Ridge and our teachers. In FY '03, I am requesting 45 million in new recurring revenues to fulfill our commitment to children and their families. Of this amount, $25 million would be in the form of millage to be supplied to the estimated debt service on a $300 million deficit funding bond. The remaining 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE 20 million would be provided in regularly recurring support to the School District. I will make this request in tandem with the General Assembly's adoption of a State budget containing 75 million more for public schools. Make no mistake: The City will feel the squeeze of this additional funding to the School District, but it is the right thing to do. Public education is already the City's top spending priority, even though our support is continuously and unfairly undervalued by our critics. Nevertheless, we always knew we would have to do more in exchange for more State support. It will take a tremendous effort by the City and the Commonwealth working in concert to build a public school system worthy of our children. The transformation will take courage, creativity, patience, trust, and money. There can be no doubt: $45 million is not too much to invest in over 200,000 public school children, who will always rely on this system as their gateway to the future. (Applause.)
Thank you. Let me give special emphasis to the fact 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE that our historic partnership with the Commonwealth does not represent a permanent solution to the District's long-term financial difficulties. At best, we are building a bridge to the future, which will crumble under the weight of additional funding requirements unless we act soon. The time has come for a school funding mechanism reflecting the fact that education is an investment in future, an investment in our most precious resource -- our children. The anthropologist Margaret Meade spoke wisely on this issue many years ago. The solution to adult problems tomorrow depends on the way our children grow up today. There is no greater insight to the future than recognizing when we save our children, we save ourselves. The current education funding formula jeopardizes our children and ourselves. All of us have a responsibility to mobilize public support of on behalf of a change in the way education is financed within the Commonwealth of Pennsylvania. We must abandon the real-estate tax as a primary way of funding public education. Success will depend on a statewide 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE coalition. Adequate funding for public education is not just a Philadelphia problem; it is a Pennsylvania problem, with cities, suburbs, and rural communities all feeling the burden. I am encouraged by the many new voices, including the State Board of Education, Greater Philadelphia First, and the members of the School Reform Commission, which have recently joined the chorus on behalf of revamping the State's school funding system. We shall all call on this year's gubernatorial candidates to speak clearly on the question of statewide tax reform. (Applause.)
Our agreement with the Commonwealth and our advocacy for a new education funding mechanism take aim at the same goal: To bring our children the benefits of literacy and liberty. No matter the obstacles, we will meet our obligations to the children of our city. We will remember now and always the wisdom contained in a maxim that has long held a special in the culture of Native Americans. That maxim states: "We do not inherit the world from our ancestors; we borrow the world from our children." 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Last year, we awarded a total of 101 after-school and youth development grants, funding 77 new programs and 24 existing programs. These grants represent one of the wisest, most cost-effective investments we can make. All available data indicates children are the most likely to get into trouble between the hours of p.m. and p.m., the hours after school ends and parents typically return from work. Law enforcement officials tell us that structured after-school programs are essential in reducing juvenile crime and preventing juveniles from becoming victims of crime. Our goal is to ensure that every child in Philadelphia -- every child -- enjoys the social enrichment, the academic opportunities, and the personal safety offered by after-school and youth development programs. The budget, therefore, requests $23 million to support our childrencentered programs in the Department of Human Services. (Applause.)
Thank you. We must honor our commitment to our 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE children, and we must do so despite the challenging fiscal climate we now confront: Current economic projections tell us that growth in revenues from wage and sales and business-privilege taxes will remain sluggish until at least the third quarter of 2002. Homeland defense initiatives will cost our city $21 million before the end of '02. The costs of our criminal justice -- the result of improving safety throughout the City and increasing arrests by 28 percent since 1966 -will continue to outpace inflation. This is the backdrop against which my administration worked to develop the budget we offer today. We are facing a tough budget year. 5 percent). This budget addresses our greatest needs, builds upon the success of our first two years, and invests strategically in our future. It is designed to inspire confidence among our citizens and within our business community. Given the state of the national economy and the challenges I have 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE described, this budgets is tight and has little flexibility. It prescribes the fiscal discipline necessary to protect the City's long-rang financial well-being. This budget sustains City services at current levels. It will require some sacrifices, but it makes prudent and targeted investments in quality programs for children, neighborhood transformation, job creation, and strategies to make Philadelphia a fertile ground for growth of the knowledge-based economy. These are the critical priorities of my vision for a better Philadelphia. The Five-Year Plan proposes an important restructuring of the City's tax reduction program. Unfortunately, given the downturn in the economy, increased spending for security, and our contribution to the School District, we cannot afford the current tax-reduction program. We propose to reduce the overall tax-reduction program by approximately $50 million over the five-year period. While we support the tax reduction scheduled for FY '03, beginning in FY '04, we propose greater reductions in the gross receipts 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE portion of the business privilege tax. In fact, by FY '07, under our restructured tax program, the gross receipts tax will be only half of what it was when our tax reduction program began in 1996 / beginning in FY '04, we will freeze the wage tax at FY '03 rates. We are targeting the gross receipts tax because it is the City's most onerous anti-business and anti-job tax. If, however, the economy recovers and there are no further unexpected blows to our budget, we will responsibly restore the $50 million reduction and reduce the dreaded gross receipts tax even further. Let me bring to your attention several important items in this budget: The General Fund fully supports wage and benefit costs for a deserving workforce of 25,440 men and women, including approximately 2 500 firefighters, and over 6,900 police officers. We will be a safer city. We will upgrade homeland security and emergency preparedness while providing funds to fight 10,800 fires, 182,000 EMS runs, process 80,000 arrests, and house 8,034 inmates. 7 million square yards of street resurfacing and repair every reported pothole within four days. It will enable us to collect 770,702 tons of refuge each year, and we will do this on time more than 95 percent of the time. This budget provides DHS services for 23,700 children and ensures that 550 of our most vulnerable citizens will be adopted into loving homes. In addition, we will open an additional nine beacon schools, which make neighborhood partners in providing community services in meeting the needs of children. This budget takes advantage of the departure of over 1,000 non-uniformed employees who are enrolled in the Deferred Enrollment Option Program, the DROP Program.
I am challenging departments to leave open vacancies caused by the DROP Program, substantially reducing the City's workforce and reducing the City's cost by $55 million between FY '03 and '07. Today starts a new year for this City Council. During the recess, I have had an opportunity, between Eagles celebration -- go 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE Eagles -- to spend some time with many of you, and I hope in the near future to meet with all of you. I am not oblivious to your concerns. This city needs us working together. I am committed to working harder and responding to your concerns, listening to your ideas, and earning your support. Politics has its place but should never undermine the good of the City. I respectfully request that you focus on the substance of this budget. It is an honest document, and it defines in stark terms the challenges of my administration and this Council. This year we cannot ignore the turbulent economy that is upon us, but neither can we allow it to unsettle our focus on a better Philadelphia for tomorrow. This year will test our resolve. I, for one, am confident. Most of us go back a long way. We have made tough decisions over the past two decades decision to see keep our city solvent and point Philadelphia in a better ridiculous. Now, once again, we are called to action. This budget reflects the priorities of people in neighborhoods across the City. It's not everything we want, but 1/29/01 MAYOR'S ANNUAL BUDGET MESSAGE it is what Philadelphia needs. I am confident. I know we are committed and I firmly believe we will remain steadfast in our focus of creating jobs, transforming neighborhoods, fortifying our economy, and offering our children the opportunity to live, learn, love, and grow and become responsible productive citizens who will lead Philadelphia through the challenges of this millennium. Together, Council President Verna; together, Majority Leader Blackwell; together, Majority Whip Tasco; together, Minority Leader O'Neill; and together, each and every member of this Council: We will make the tough decisions necessary to meet our obligations and implement our shared vision of a better 21st century for Philadelphia. Together we will get the job done Thank you, God bless you, and God bless our great city. ) CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, January 29, 2002 are contained fully and accurately in the stenographic notes taken by me upon, and that this is a true and correct transcript of same. ) CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, January 29, 2002,are contained fully and accurately in the stenographic notes taken by me upon, and that this is a true and correct transcript of same. )