When is a Budget Cut Not a Budget Cut?

A proposed budget reduction isn’t always a true cut—sometimes it reflects the end of one-time costs, a shift in responsibility to another department, or reduced demand for services. For instance, FY26 budgets for Parks & Recreation and Homeless Services are lower than FY25, but not all changes imply service reductions. To discern real impacts, stakeholders are encouraged to consult departmental performance measures and Schedule C budget forms to see if reductions affect service delivery.

Foundation for Financial Oversight: The PICA Act and the Intergovernmental Cooperation Agreement

The PICA Act and PICA's Intergovernmental Cooperation Agreement with the City of Philadelphia serve as foundational documents for PICA's financial oversight of the City of Philadelphia.

The Pennsylvania Intergovernmental Cooperation Authority Act

PICA was established by the PICA Act in 1991 in response to Philadelphia’s financial crisis, providing oversight and access to capital markets to restore fiscal stability. The Authority continues to review the City’s annual Five-Year Financial Plans and enforce compliance through quarterly reporting and the power to withhold state funds if necessary. Amendments to the PICA Act in 2022 extended PICA’s authority and reemphasized its role as a long-term fiscal partner to the City, with renewed bonding powers for critical infrastructure.

The Intergovernmental Cooperation Agreement

The Intergovernmental Cooperation Agreement (ICA) outlines how PICA and the City will meet the fiscal oversight requirements of the PICA Act, detailing responsibilities for financial planning, reporting, and enforcement. Updated in 2023, the agreement ensures transparency and accountability by regulating fund management and permitting financial penalties if the City falls out of compliance. As a codified partnership, the ICA strengthens Philadelphia’s financial governance and helps prevent future crises.

Introducing: PICA's Redesigned Website!

Our website, www.picapa.org, has been redesigned! Our refreshed site now has a publications page, where you can filter and search for anything we've published online. We've also made our Board Meeting agendas, resolutions, and minutes, much easier to navigate with their own dedicated page. Many thanks to the team at karma dharma, inc. for their work redesigning our site!

Philadelphia Council for Business Economics

The Philadelphia Council for Business Economics (PCBE) is Philadelphia's local chapter of the National Association for Business Economics (NABE). At its monthly meetings PCBE hosts discussions led by subject matter experts on a range of topics that are important to Philadelphia's economy.

Meetings this year have featured:

• "The Importance of Official Data in Assessing Economic Conditions" by Alexandra Hall Bovee, Assistant Commissioner for Regional Operations, Bureau of Labor Statistics
• "Philadelphia's Commercial Real Estate Market in 2025" by Brenda Nguyen, Associate Director of Market Analytics, CoStar
• "Capital Budgeting in Philadelphia" by Alix Sullivan, Officer, The Pew Charitable Trusts
• "2025 Economic Outlook" by Anna Wong, Chief U.S. Economist, Bloomberg Economics

Meetings are held at the Federal Reserve Bank of Philadelphia, with lunch provided. There is a fee to attend, which is lower for PCBE members than non-members.

The next meeting is scheduled for Thursday, May 8th at Noon, and will feature John Silvia, Chief Economist at Dynamic Economic Strategy and former Chief Economist for Wells Fargo. His presentation will be titled "In a Fog of Policy Uncertainty: Decisions Must Be Made."

The PICA Board Meeting originally scheduled for Tuesday, May 20th at 12:15PM has been cancelled. The next PICA Board Meeting is scheduled for Tuesday, June 17th at 12:15PM.

What We're Reading

Each year, Pew Charitable Trusts publishes a comprehensive report exploring the topics and trends most impacting Philadelphia—from demographics and transportation to public safety and jobs, and more.

Key Takeaways

• Unemployment, at 4.5 percent, is at one of its lowest levels in several decades and the total number of jobs is up.
• The poverty rate is 20.3 percent, the lowest since 2000, and the median income is rising.
• The number of homicides was 269 last year, the lowest number in a decade.
• There has been a 10 percent increase in people experiencing homelessness over the last year.
• The number of overdose deaths is declining, with an estimated 1,100 deaths in 2024, but still much higher than a decade ago.
• The city’s population ticked up last year, but it is still down from 2020. 

$562 Million

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