— Legislation sponsored by Rep. Martina White (R-Philadelphia) and Rep. Jared Solomon (D-Philadelphia) to extend the Pennsylvania Intergovernmental Cooperation Authority (PICA), the independent entity that provides oversight to the City of Philadelphia’s finances, has passed the Senate and moves to Gov. Tom Wolf for his signature.
House Bill 1935
extends this oversight until Jan. 2, 2047, or one year after all the city’s bond liabilities are met. It also requires the city to submit its revised five-year plan to PICA for as long as the authority retains existence.
“This is important legislation that will help the city as it continues to face financial uncertainty with its budget projections and limited choices,” White said.
The Intergovernmental Cooperation Agreement crafted in 1991 provides PICA with broad access to the city's financial data so it can conduct independent audits to give Philadelphia fiscal integrity.
“PICA has been essential for maintaining the financial health of the City of Philadelphia,” Solomon said. “It’s critical we keep PICA in place to ensure Philadelphia maintains economic health for years to come.”
PICA borrows funds on the city’s behalf and, in exchange, oversees Philadelphia’s finances.
PICA’s independent oversight of the city’s finances helps ensure that:
The city uses reasonable assumptions in its budgets and avoids unrealistic assumptions and one-time solutions to the city’s long-term economic problems.
Legislators, taxpayers, rating agencies and bond investors have confidence in the city’s finances.
Four of five board members must approve PICA’s most significant actions. As PICA’s five voting members are appointed by the governor and the leaders of the House and the Senate, this assures that all decisions receive bipartisan approval.
PICA also requires the city to provide a five-year plan each year to the authority to make sure the plan is balanced using assumptions that the PICA Board deems to be reasonable.
Philadelphia must provide quarterly updates to PICA and to redo its plan if PICA determines that the city’s financial performance is inconsistent with the five-year plan.
If PICA rejects a five-year plan, the authority can direct the state Budget secretary to withhold hundreds of millions of dollars from Philadelphia. PICA also gives suggestions to the city on financial management that helps the city implement reforms.
“Without PICA, the city could quickly return to the days of catastrophic deficits and crushing debt,” White said. “That would force the state to funnel more money into a city without a plan to stop the self-destruction. PICA makes this scenario far less likely and protects Pennsylvania taxpayers. To reassure the financial markets and to protect the taxpayer, we must extend the authority’s life.”
Representative Martina White
Pennsylvania House of Representatives
Media Contact: David Foster
RepWhite.com / facebook.com/RepMartinaWhite