PlanPhilly

Ballot question on borrowing $184 million for city capital needs

Your attention is no doubt fastened on the electoral showdown between Donald Trump and Hillary Clinton, or perhaps the Pennsylvania Senate race.

But this Tuesday Philadelphians will also have the chance to vote on, glory of glories, an issuance of municipal bonds.

Voters will be presented with a question of whether the city should borrow more than $184 million for capital needs spending. According to Mayor Jim Kenney’s deputy communications director, Mike Dunn, that includes $9.8 million for new fire vehicles and $7.6 million for renovations at fire stations and the department’s other facilities. The Philadelphia Police Department would get $12.55 million for renovations and building upgrades, and the Streets Department would see $8 million for new vehicles. And the mayor’s Rebuild initiative targeting parks, rec centers, and libraries would get $8 million. About $90 million would go toward projects involving the upkeep and maintenance of municipal buildings.

Although, as the Committee of 70 notes, “City Council would have authority, by ordinance, to change the intended allocation of these proceeds.”

The language should be very familiar to voters, as similar questions have been on the ballot for the last six elections.  In every instance, they’ve passed with large margins.

Every election season the question of whether the city should add to its debt load generates a bit of armchair punditry about the fiscal recklessness of Philadelphia, while proponents argue that today’s insanely low interest rates make bonds a pretty good bet right now.   

“I understand the concerns and instinctive opposition to this,” says Matt Ruben, president of the Northern Liberties Neighbors Association and a civic activist who is advising his fellow residents to approve the bond issuance. “If people don’t think the city is run well, why would they let the city grow its debt by issuing bonds? But without the ability to issue bonds to generate capital funds for critical infrastructure, everything people don’t like about the condition of our city would be ten times worse.”

Philadelphians haven’t always enjoyed, if that’s the word we’re looking for, even this nominal say in the city’s borrowing. The Democratic reform movement of the 1950s created the city’s charter to provide for greater transparency and professionalize vast swathes of the city bureaucracy. Public votes on bond issuances were one of the resulting reforms.

“I think it makes a certain amount of sense, in that capital borrowings are kind of a claim on future tax dollars, something you have to live with for a long time,” says David Thornburgh, president and CEO of the Committee of 70. “At least it preserves the option of direct input. It’s like people voting on behalf of their grandkids almost.”

It is something of an empty gesture towards transparency, however.  Most Philadelphians aren't experts on municipal bonds and there is rarely public debate around the bond questions, which always pass by large margins.  Nor are the exact allocations are included in the ballot language, so it’s not very clear to the average voter what the money would go towards.  

Not that rigidly locking in how the funds would be allocated would be a great idea either.

“I don’t think it’s useful for it to be set in stone now because that may turn out to be a really efficient or stupid way to spend it when the time comes,” says Ruben.  “I understand why people would be concerned about this. But it’s really hard for the city to figure out all its budgeting especially when Harrisburg is dysfunctional and the end result of the soda tax is unclear. The budget is a moving target and what’s available for what is very difficult for them to know now.”

There is a real question of whether the public should even be voting on what amounts to an empty gesture at transparency. Like the election of lower court judges, it can be argued that bond votes are highly technical issues that just clutter up the ballot and distracts from races voters should be expected to learn about.

“There are certainly states that have chosen not to have such requirements, because we elect officials and we entrust them to make those decisions,” says Peter Enrich, an expert on state and local finance at Northeastern University Law School. “The most sensible approach is probably one that gives elected official some discretion, but not unlimited discretion. If it's a big enough issue, to start a public transit system or something, it's something we can expect voters to be informed about. If it's just raising money to repair a couple elementary schools, it probably doesn’t belong on the ballot.”


About the author

Jake Blumgart, Reporter

Jake Blumgart is PlanPhilly's planning, development, and housing reporter. He covers the city's built environment and the people who live and work there. He lives in Cedar Park and has also contrubuted to Slate, CityLab, Next City, The Philadelphia Inquirer, Philadelphia Magazine, and the American Planning Association's magazine. Follow him on Twitter @jblumgart and email him at jblumgart@whyy.org.

 


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    Issues: Government
    Photo Credit: Jana Shea for NewsWorks

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