This post is part of a larger series.

In the last post, I showed how gerrymandering has disenfranchised Philadelphia at the State and Federal levels. Now, we will examine some of the negative consequences that happen when elected officials do not accurately represent their constituents.

First, let’s think about what some of the key interests of Philadelphians include. Like anywhere, residents want good schools, efficient transit, grocery shopping and other shopping options, quality healthcare, quality housing, job opportunities that pay a living wage, and ample public amenities (like parks or libraries). However, Philadelphia is unique in several ways. Public transportation is critical for the city, unlike many parts of Pennsylvania. The school district is also by far the largest, and it arguably has the highest need in the state because of the higher poverty rate. Also due to the exceptionally high poverty rate, Philadelphians are especially in need of good job opportunities, housing options, and healthy food. In sum, Philadelphia more than anywhere else in Pennsylvania depends upon public goods and government programs due to the dense population and the high poverty rate.

PA Poverty Map_edited-1
Source: American FactFinder, 2012-16 averages on poverty by county.

The State of Pennsylvania has not shown concern for these needs, and this far and away disproportionately impacts Philadelphia. This is clear from budget cuts at the state and federal levels that disproportionately impact Philadelphia, as well as the persistently low budgets for essential programs. In this way, the state and federal governments have systematically deprived Philadelphia of resources it desperately needs.

First, let’s take a look at budget shortfalls. In a previous post, I showed that the School District of Philadelphia is the most poorly funded district in the state. But this is just one of the many underfunded services. The public transportation authority, SEPTA, is also chronically underfunded. Funds for other public infrastructure, like libraries, playgrounds, and parks are also severely lacking. Programs across the whole spectrum of basic needs are cut or underfunded, including in health care, housing, transportation, education, food access, and public spaces.

As a high school student, I vividly remember when budget cuts from the state were announced. Many schools in the district were closed, and my own school was threatened with closure. We began attending school in a nearby district building in anticipation of consolidating spaces. After-school activities were permanently canceled until only basketball and volunteer activities remained. Libraries across the district were closed in all but a few schools.

This is just one of the most prominent examples. Philadelphia’s subway cars have not been renovated in decades. Potholes appear in the streets far faster than the city can repair them. Public housing has fallen into immense disrepair. The list goes on. Anybody who has lived in Philadelphia and relied on public services feels a clear message from the state and federal governments—we are not valued.

Here are just a couple concrete examples of major gaps in Philadelphia’s public services:

  • Philadelphia Housing Authority
  • Basic Systems Repair Program (owner-occupied repair assistance)
  • School District of Philadelphia
    • The school district faced severe budget cuts in 2011 and 2013.
    • As a result, 31 schools had to be closed by Nov. 2014, thousands of employees were laid off, and many programs were cut back or removed entirely.

To gain better insight into these shortfalls, let’s take a look at the State and City budgets. There is a lot to unpack here, so bear with me. Before looking at the charts, please note the following:

  1. I have two versions for each chart: “nominal” and “real.” Nominal is the actual value recorded, not accounting for inflation or anything else. So, the older the numbers are, the more misleading they might be, which is why I have also included a version scaled to inflation and population (using census data) below for comparison. That is the real value. No method is perfect, so I leave it to the reader to choose a preference.
  2. The “special and other” category for the state is a complicated mix of unique sources, and it is mostly grants and specific funds.
  3. The “grants and contributions” category for the city is also a complex mix, but it is mostly grants from the state and federal governments. I did not want to list this along with “federal government” because it would involve unpacking the dozens of revenue sources and could lead to serious inaccuracies.

It is also necessary to understand the budgeting process. The budgeting process is long, complicated, and involves many influences. It is similar at the city, state, and federal levels. Each year, the top government executive, such as the president, submits a budget proposal to the legislature. The legislature then debates the budget and makes alterations to submit back to the executive. The executive can then veto the budget or individual parts of it, which require a two-thirds majority to override. So, whoever is the mayor, governor, or president has immense power over the budgeting process. It would take an extremely unlikely majority to overcome this person’s vetoes, as we are now seeing at the national level with the feud over the border wall funding. To learn more about the budgeting process, check out page three of the most recent state budget.

I created this diagram to show which party has been in power at the state and federal levels for the past 20 years. For the legislature lines, I showed the percentage of the majority. Note that it never exceeds 66%. This is helpful for understanding the budgets over time.

screen shot 2018-12-19 at 6.32.17 pm
I used this source and this source to make this chart.

Here is the Pennsylvania budget by revenue source over most of the past three administrations:

PA State Expenditures by Revenue Source (Nominal)
I made this and other state charts using Section B4 of the Governor’s Executive Budget each year and looking at the last year’s appropriations.

There are a couple interesting findings here. First, state taxes only make up about one-third of the funding. The federal government makes up another third, and the assorted other sources make up the final third. Second, the budget steadily increased, fell during the start of the Corbett administration, and has been rising since. Let’s take a look at how this looks when adjusted to the real value.

PA State Expenditures by Revenue Source (Real)

Here we can see that funding levels have been more or less steady until very recently. We can also see that both Rendell and Corbett made serious budget cuts. Also, the  major driver of changes in the budget was the federal government.

The next two graphs are similar, but show expenditures by category, rather than by funding source:

PA State Expenditures by Category (Nominal)

The biggest takeaway overall is that the state overwhelmingly spends money on education, health, and human services. That is encouraging. Significant portions are also spent on “protection of persons and property,” which includes the courts, police, and incarceration, and on “transportation,” which is overwhelmingly highway work. It seems that the largest cause of budget increases has been increases in spending on health and human services.

Let’s see how this looks when adjusted:

PA State Expenditures by Category (Real)

No surprises here. The budget has remained fairly steady, with cuts from Rendell and Corbett and recent increases under Wolf. Health and human services spending has increased dramatically, likely due to rising healthcare costs nationally.

Next, let’s take a look at the City of Philadelphia’s budgets. Here are the nominal and real budgets, just like above. First, there is revenue:

philadelphia city budget by revenue source (nominal)
I made these charts using the annual audits of the city, also known as the Comprehensive Annual Financial Report (CAFR). 2017’s report is here.

philadelphia city budget by revenue source (real)

One major difference to note first is that Philadelphia’s government also manages several “component units,” which are government agencies that are effectively under the control of Philadelphia, but which are a special type of organization. Examples include the School District of Philadelphia or the Philadelphia Housing Authority. One organization that is not included in this is SEPTA, presumably because SEPTA impacts the whole region.

Like the state budget, local taxes only account for about a third of the budget. Most comes from “grants and contributions,” which, as I said, is mostly from the state and federal government. “Charges for services” make up a significant portion of the local budget, and this includes things like the Parking Authority’s tickets, utilities payments, and revenue from the airports. The city budget has increased incrementally, but when we look at the adjusted values, it has really remained level or even decreased until very recently.

Here is the city budget by expenditure category:

philadelphia city budget by cataegory (nominal)philadelphia city budget by category (real)

There are many more categories to the city’s budget than for the state’s, and I had to consolidate lots of categories to make this remotely understandable. Like the state, Philadelphia spends most of its money on education, health, and human services. However, Philadelphia spends significantly more on all of its other categories. Unlike the state budget, expenditures on health and human services have not increased much. In fact, nothing has really increased.

That was a lot at once, but I promise it is worthwhile. Once you have a basic idea of the budget over time, and that most of Philadelphia’s public programs are vastly underfunded, a clear conclusion emerges. Philadelphia’s services aren’t just underfunded—they are consistently kept on a shoestring budget, where even the mildest shocks in the larger numbers mean major impacts for people’s lives. Take my case for example. The massive funding cut of $1 billion from the state education budget in 2011 caused the crisis I felt locally, but it barely registers on these charts. And, these fluctuations are primarily caused by changes in funding levels from the state and federal governments, since local tax revenue makes up a relatively small portion of the budget. Therefore, the programs that Philadelphians rely on depend upon the political will of Harrisburg and Washington. We have seen from my previous post on gerrymandering that these governments disproportionately do not represent Philadelphia, so Philadelphians are effectively disenfranchised and underserved.

This is one of the major causes of the inequality we face today. This has led to major disinvestment in Philadelphia from the government, which fails to prevent inequality and even exacerbates it.

Next, I will examine tax rates and revenues. This will show us why it is that the we rely on the federal and state governments for program funding, and it also shows important information about what is encouraged, discouraged, and what kinds of income distributions are made possible.