Philadelphia is going to try to use some creative accounting to close the budget deficit.
The mayor and city controller announced a plan to change the way it handles the city's pension fund.
Mayor Michael Nutter says the change will close 172 million of the city's projected billion dollar budget shortfall.
City Controller, Alan Butkovitz says “what is particularly relevant is that we not crowd-out the critical city services like police and fire because all the money is going to pension costs and what’s also critical is that we not drive everybody outside of the city because they are getting large tax increases to fund pension costs.”
The pension board agreed to three changes:
- Lowering the assumed return of the fund from 8 and 3 quarters to 8 and a quarter.
That means the city has to pay less into the fund.
- The period in which the city has to pay off its pension costs will increase from 20 to 40 years.
- The period over which the funds loses or gains are earned, will go from 5 to 10 years.
The city still needs legislative approval.
The economy will be a big topic this Sunday.
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