Fiscal Impact Statements for All!


(Photo: Allan Domb)

For anyone who's been closely following the recent debates in Congress over Obamacare or the Republican tax cut plan, you've been hearing a lot about the Congressional Budget Office and Joint Committee on Taxation. These bodies were created to analyze pieces of legislation before they're voted on, and help ground policy debates in some shared set of facts. 

At the state level, we have a similar referee in the Independent Fiscal Office, which analyzes the budgetary impact of state legislation. 

Philly doesn't have a local equivalent of the Congressional Budget Office or Independent Fiscal Office, but there actually is a process for requesting Fiscal Impact Statements for pending Council bills from the Director of Finance. The issue is that Council never usually asks for them.

Fiscal Impact Statements were first introduced in 2013, but are rarely requested. The way it works now is that a bill's sponsor can request a fiscal impact statement, or three Councilmembers can vote to request one. Bill Green often requested impact statements when he was an At-Large Councilmember, but since he left Council they're infrequently used.

Lawmakers don't always care what these scores say, but they can help provide at least some factual anchor for debating legislation beyond whatever officials claim that their bills do. 

This came up the other day in the inclusionary zoning bill hearing, when Allan Domb said he'd be interested in seeing a fiscal impact statement for the bill—a good idea, since that bill could have big implications for the property tax base. Councilmember Maria Quinones-Sanchez could request that statement herself, or Domb could find two other Councilmembers (likely Squilla and Henon) to request the statement.

Domb wants to change this process and allow just one Councilmember to request a fiscal impact statement, and has introduced a bill (No. 170719) to that effect. It's getting a hearing in Council's Finance committee on Friday morning.

The bill would replace the current three-vote threshold with a system where any Councilmember can request a Fiscal Impact Statement. The requesting power would apply to any pending ordinance, although not appropriations bills, and the requests would be forwarded to the Director of Finance or the Controller's office.

Domb's bill would also require that fiscal impact statements to be revised for any amendments that are adopted. Notably, Council would still have the option of passing a bill before the impact statement came back. 

Finance Director Rob Dubow's prepared testimony for Friday's hearing says the administration supports making it easier to get a fiscal analysis of legislation, as it "will provide Councilmembers and the public with a clearer understanding of the potential impact that proposed legislation could have on the City’s Budget and Five Year Plan."

And the Committee of Seventy points out that fiscal impact statements are actually a requirement for all legislation in several other cities, rather than something members have to vote on all the time. From their prepared testimony:

Fiscal analyses are also a prerequisite for approval of bills in numerous other cities including Boston, Los Angeles, San Francisco, New York City, Pittsburgh and Washington D.C. This is for good reason. These analyses provide important supplementary information for lawmakers and the public, providing a reliable estimate on how proposed legislation would impact expenditures or revenue levels in the near-term and several years out. Although Fiscal Impact Statements in Philadelphia do not include the possible economic or social impact of a bill, which can be significant, vigilance around the City’s financial condition remains critical.

It's a bit weird having to argue that it would be good for Councilmembers to have more information, but this is where we are. The Domb bill would be a good first step in the right direction.

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