Philly Financial Watchdog: Revenues Up, But So Are Overtime Costs

The latest report from PICA shows greater-than-expected revenues in the first quarter of this fiscal year. But overtime costs are soaring.


Photo by Bradley Maule

A quarterly report from Philadelphia’s financial watchdog says revenue in the general fund is much higher than expected — but that that overtime costs are soaring.

The Pennsylvania Intergovernmental Cooperation Authority, created by the state in 1991 to “restore the financial stability” of the City of Philadelphia, released its report earlier this week. It says the city’s general fund balance at the end of the year is projected to be $95.8 million — a whopping $55.5 million higher than a five-year estimate predicted.

But the report also noted that overtime payouts in the first quarter of fiscal year 2017 — which ended on September 30th of last year — represented 14.5 percent of total wages/salaries, the highest percentage since fiscal year 2010.

Most of the data in PICA’s report is upbeat. The city is projected to have $4.2 billion in revenue in the general fund in FY 2017, about $19 million more than projected. That’s largely due to the $3.09 billion in tax revenue the city is expected to take in this year — $17 million more than previously estimated.

The city is now expected to pay $21 million more in employee benefits (due to higher pension and health care costs) and $12.1 million more for the fire department (largely due to overtime).

General fund overtime chart

Chart via PICA

But overtime costs, as a percentage of city wages, have soared. That OT percentage dropped last fiscal year after rising for several years.

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