Goode announces city bailout plan

Mayor Wilson Goode, flanked by Democratic state legislators, announced Friday a financial rescue plan which would leave the city with a $140 million deficit for fiscal year 1991, which ends in June. The plan also calls for balanced budgets starting in fiscal 1992. The plan would require the city to sell off $90 million in assets -- Veteran's Stadium has been mentioned -- and cut a total of $37 million in spending with a job freeze and court reforms. While the plan has received support from Governor Robert Casey, absent from Friday's press conference were all City Council members and the state legislature's Republicans. Those factions will be necessary for implementation of the plan. For fiscal 1992, the plan calls for a one percent sales tax in the city, which is expected to raise $100 million, and an additional $25 million in undetermined taxes. A Philadelphia sales tax would need to be approved by legislators in Harrisburg. State Senator Vincent Fumo (D-Phila.) said he is "cautiously optimistic" that required legislation could be passed. The plan also depends on $50 million in state aid and $33 million in federal aid. Casey issued a statement Friday saying he would do "all [he] can to make it happen." The city must now attempt to sell at least $250 million in short-term notes in order to raise enough cash to pay its bills and meet its payroll over the next four months. Goode said that the rescue plan is necessary if the city is ever going to sell the notes. Nancy Barbe, assistant vice president at Moody's Investor Service, said that the city's bond rating, which is currently below junk-bond level, would probably not be raised until the city is operating under a long-term plan. Barbe said she hadn't fully analyzed the plan yet, but that it seemed to be "a step in the right direction." State House of Representatives Speaker Robert O'Donnell (D-Phila.) said the plan calls for the appointment of a financial oversight board if the city reaches a point of financial "distress." Besides Fumo and O'Donnell, State Senator Hardy Williams (D-Phila.), State Representative Dwight Evans (D-Phila.) and City Controller Jonathan Saidel joined the mayor at the press conference.

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