It’s everyone’s favorite season- budget season! Over the next three months we're going to provide different kinds of analysis of the City's budget process. We'll talk about budget documents, what passes for negotiation, and the administration's priorities. But first, the basics.  

On March 2nd, the Mayor presented his annual budget to City Council; you can watch it here. This budget is for Fiscal Year (FY) 2018, which runs from July 1st, 2018 to June 30th, 2019. The budget is introduced alongside the budget address, which is the first and best opportunity for the Mayor to outline his spending priorities. Last year, Mayor Kenney used his budget address to plant the flag on the soda tax as the vehicle to fund Rebuild and Pre-K. This year's goals are more modest. The address is usually a pretty formal affair, with most of your city government's VIPs in attendance, except when it's not. 

On the day of the budget address, the City Council President and Majority Leader introduce a package of bills on the Mayor's behalf; these bills together comprise the proposed budget. Notably, there are a few different budgets, and a couple different governmental bodies that need to approve them. 

Let's look at the proposed FY18 budget. Included in the package is:

• The mothership budget bill (#170197), aka the City’s $4,377,475,000 operating budget. This is the budget that funds City services
• The capital bill (#170196), which proposes a $2,638,616,000 FY18 capital budget
• And a six-year capital plan (#170195), which lays out the projected spend through FY23

Additionally, there are a few other bills that must be passed to make things work:

• Two bills (#170199 and #170200) that authorize the School District to impose their portions of the Real Estate and Use & Occupancy (U&O) taxes on Philadelphia residents and businesses. These bills are required because the SDP isn’t a taxing authority, so the City has to authorize taxes on its behalf
• One bill (#170198) that sets the FY18 rates for the City's Wage and Net Profits Taxes

The three above bills are the most pro forma; they simply add FY18 to the list of years that the taxes can be levied, and set the rates, which have been determined via previously enacted legislation. No one really cares about them, since the rates aren't negotiated during budget season. 

In sum, Council must approve the aforementioned six bills to pass the budget. But because we almost went totally and completely broke in the early 90s, we also have one more bill that's a Philly special:

• This bill (#170213), is a five-year Financial Plan submitted to the Pennsylvania Intergovernmental Cooperation Authority (PICA), a fiscal oversight group created by the State to monitor Philly. PICA has to approve the budget and five-year plan; if it doesn't, some funds get frozen, ratings agencies freak out, and things fall apart. PICA has a particular focus on long-term expenditures (eg. union contracts and pension costs) and assumptions about funding that the City doesn't control (eg. changes to our tax code that require Harrisburg's approval)

Not included in this package: The two enormous binders that identify how every penny will be appropriated (except not, because money doesn’t have to go where it’s budgeted) and the Mayor’s Budget in Brief, which is a narrative that tells the story of the Administration’s spending priorities. These documents aren't legislative, but they are part of the catalogue of materials produced as a part of the process. 

This time last year was all about the soda tax. Nothing in this budget is that heavy, but there are still some new priorities to fund and a new accounting approach called Program Based Budgeting to geek out over. We'll cover all of that in the next posts in this budget series.