by Jay A. McCalla
Over the decades, the Republican Party developed a series of jabs aimed at Democrats. Phrases like “tax and spend,” “soft on crime” and “weak on defense” found their way into speeches describing the party of FDR, Truman and LBJ.
Given today’s politics, where one candidate denounces Mexicans as “rapists,” those barbs seem benign ¬ almost charming.
While I’m certain my party is neither weak on crime nor soft on defense, I had pause when considering the “tax and spend” jibe. Mayor Jim Kenney’s new budget came to mind, and I softly gasped. The Kenney budget doesn’t just rely on $400 million in new taxes but $300 million in new borrowing. Thus, there may be a fresh Republican epithet: “tax, BORROW and spend” Democrats.
Of course there’s always a cogent, compelling reason offered for our constant taxing and borrowing. In this case, it’s to support a new wave of spending that will reach $1 billion. That’s $600 million for deferred maintenance on recreation centers, parks and libraries. And, $400 million (from a soda tax) for pensions, pre-K, community schools, etc.
Often, we’re warned to look away as our politics and sausage is made. But, I invite you to squint along with me as we examine the making of “political sausage” in Philadelphia.
We know ours is a city with official and ancient reverence for labor unions of almost any sort. It’s not that we have a socialist appreciation for the collective bargaining process so workers can get an increasing share of the economic pie. Quite the opposite, labor unions represent large political donations, phone banking, PAC spending, mailings and election day workers. There ain’t nuthin’ ideological about it.
Crucial to Kenney’s successful mayoral bid was building trades boss and sidewalk pugilist Johnny Doc. Imagine the “coincidence” that Kenney would immediately propose an enormous spending plan that will keep Doc’s members in high demand for at least the next six years.
Democratic machines have been built across America, based on the same type of “coincidence.”
Professional services are not competitively bid in Philadelphia, and the mayor can award such contracts, if he chooses, to donors only. Knowing this, law firms have always been conspicuous in driving donations. Given the obvious capacity and motivation for a quid pro quo, one shouldn’t be shocked that the Kenney plan is based on borrowing from Wall Street three different times. That means, theoretically, three different law firms will be retained as bond counsel and three different law firms as bond co-counsel. As many as six law firms may drink from this one mayoral trough and others will salivate at what riches the next eight years may bring their way.
The third leg of the Democratic spending triad is the political class. They will be the ones grinning and preening at every completed improvement and grand reopening the $600 million can provide. On the strength of this massive infusion of borrowed cash, Kenney and Council members will glide (they always glide) to reelection, bragging about how they’ve “invested in our future.”
I was Deputy Managing Director for Mayor Street’s Neighborhood Transformation Initiative, which borrowed $300 million on Wall Street. It won’t be repaid until 2031. Now, we pack on another $300 million in debt simply to deal with deferred maintenance and feed our political system. So ingrained is the political imperative that the Kenney administration ignored a plain warning from Moody’s Credit Reporting that stated, “The city’s debt and pension liabilities are a heavy drag on its credit profile for the long term.”
Like crack addicts, our mayors cannot resist going to their Wall Street “drug dealer” for another fix. They fully embrace the folly of burning the furniture to heat the house in the time honored expectation that they’ll be long gone (on CNN or MSNBC) by the time we need a new couch.
If one’s only goal is to get reelected, the cynical manipulation of city finances (to our long term detriment) is the exact way to go. But, sustainable, smart governance requires so much more than reflexively drawing from a playbook that simply perpetuates Democratic rule — 75 years and counting. Democratic mayors have to start earnestly feeling the burden of creating a functioning school district, reducing our highest in the nation poverty rate and closing the almost $6 billion gap in pension funding.
Accomplishment is a valid way to get reelected, but we only get treated to the rare display of competence and “sugary treats” like the Papal visit and DNC Convention. Even dazzling displays of competence, e.g., Mayor Street towing thousands of cars with impressive speed, highlight the decades of incompetence when we just let them pile up. The trick is to routinely and effectively manage the details. That’s government.
Like Pavlovian dogs, Democratic Party stakeholders have heard their dinner bell and history tells them they will be fed. There is a mayor of their creation and mayors control billions. This is our system. To paraphrase the immortal Hyman Roth in Godfather II, “this is the sausage we’ve chosen.”