Mayoral budget lacks funds for pay increases

Mayor John Street's proposed budget maintains existing salaries and cuts benefits for city workers -- a move that many say will draw protest from local unions.

Other proposed cuts include closing fire departments and recreational centers, reducing funding to cultural centers and eliminating 2,500 city jobs.

"We think that the cuts are expensive all across the board," a Street spokeswoman said.

In light of these cutbacks across the city, there is some question about where Street would find the money for a pay increase following union negotiations.

"I think that there'll be lots of resistance from the unions," City Budget Director Robert Dubow said. "The rationale is that pay increases will be earned through changes in collective bargaining agreements" reached through meeting with the unions.

In addition to the salary issue, local unions are also likely to protest several changes to employee benefits. Major changes include reducing sick days from 15 to 20 per year to six per year, moving from private insurance to employer-managed self-insurance and redefining pension payments.

The pensions of city workers are currently "defined-benefit," meaning that there is a guaranteed payment amount according to a formula based on how long retired workers were employed by the city and for which department they worked.

Philadelphia has a $3.6 billion pension fund that is supposed to be earning money on its investments, but if it does not, the city is required to make up the difference.

Street would change the system to "defined contribution," guaranteeing the amount the city pays to the pension fund, not how much workers would get out of it.

Between now and June 1 -- the terminal date for the old contracts affecting 14,500 city workers -- negotiations will go on between the Mayor's Office and union officials. City Council will also weigh in before either approving or rejecting the budget.

"We're all going to have to make sacrifices, so we're hoping the unions will work with us ... to make the budget work for everyone," the mayor's spokeswoman said.

Brian Abernathy, legislative assistant to City Councilman Frank DiCicco, was less optimistic about the fate of the budget proposal.

Street "has made the threat that if some of the cuts do not go through, he will lay off workers," Abernathy said.

He added, "It's also my guess that some of the cuts will not go through."

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