ELEPHANT CORNER: Corbett Visits A United Party

Tuesday night, Philadelphia Republican City Committee sponsored an evening with GOV. TOM CORBETT at the Southampton Room. The event was open to local ward leaders, committee people and volunteers. We expect to see more of the Governor as his team focuses on his reelection campaign.

The 300-plus crowd heard the Governor speak of the successes of his first term, including passing four budgets on time without raising taxes. His predecessor did not pass a budget on time in eight years. Corbett pointed out his policies and the actions of the Republican-controlled state legislature have created over 160,000 private-sector jobs. He lauded State Representative and RCC CHAIRMAN JOHN TAYLOR for his outstanding work.

Last Saturday, Philadelphia Republicans were seen at the Jersey shore. We heard a number of them were in Avalon in the morning for the wedding of the daughter of former City COUNCILMAN JACK KELLY, including ward LEADERS BILL IVERS, AGNES “CHUCKIE” TILLEY and MATT WOLFE. Other Republicans there included COUNCILMAN BRIAN O’NEILL, Executive Director of the Philadelphia Parking Authority VINCE FENERTY and former candidate for City Council at Large JOE McCOLGAN.

The reason we know of the Kelly wedding is that a number of the guests also made their way to State Rep. John Taylor’s annual Jersey shore fundraiser in North Wildwood. The 200-plus crowd enjoyed the afternoon event. Attendees included numerous ward leaders in addition to those from the wedding, as well as RCC General COUNSEL MIKE MEEHAN and Republican candidate for Philadelphia City Controller TERRY TRACY.

Last Thursday, Detroit filed for protection under Chapter 9 of the Bankruptcy Code. Despite the efforts of KEVYN ORR, the Detroit emergency manager appointed by Republican Michigan GOV. RICK SNYDER, an agreement could not be reached among the city’s creditors to avoid bankruptcy.

As the Elephant Corner noted a few weeks ago, the plight of Detroit holds some lessons for Philadelphia. Like Philadelphia, Detroit saw its manufacturing base all but disappear along with the middle-class taxpayers who not only followed the jobs to the suburbs but also took their children out of the city’s failing schools. Sound familiar? Yes, foreign competition in the auto sector hurt the city, but bad public policies were what drove the nails into the coffin.

There are many who expect state and federal governments to step in and save city-employee pensions and pay for city services. Is it fair to expect state and federal taxpayers to bail out Detroit? After all, the people in Detroit elected the city officials who year after year mismanaged the city. Union members continued to elect union officials who pushed for deals that included underfunded pension plans that everyone just assumed would be paid by future taxpayers. There was a little problem with this assumption – poor public policies transformed a city with a tax base of 2 million people into one of 700,000.

Like Michigan, Pennsylvania can by law step in and force financially failing cities to deal with their problems. We did this in Harrisburg, which was in pretty bad shape before the State intervened. However, in Philadelphia we have a state oversight mechanism already in place through the Pennsylvania Intergovernmental Cooperation Authority.

PICA has the ability to disapprove city budgets that in its opinion could lead to the city’s failure to make payment on the bonds PICA issued on behalf of the city. The bonds were initially issued by PICA when the City was in severe financial trouble in the 1990s. The bonds have a lien on Philadelphia tax revenues. While there are no concerns the City will not make current debt service, these are long-term bonds.

If the secured bondholders in Detroit get less than 100 cents on the dollar (as expected), I believe the PICA board has the obligation to consider the longer-term implications of our stagnant tax base and grossly underfunded pension plans and use its authority to dissuade this City from going down the path of Detroit.