More cash-strapped cities may turn to asset sales in '12
There's one big, scary reason you should get familiar with the phrase "public asset sales" in 2012: pensions.
By 2016, pension fund payments and debt service will eat up 16.5 percent of the city's budget, according to the Pennsylvania Intergovernmental Cooperation Authority.
In order to clean up the pension mess, the city could sell off assets, such as the airport, Philadelphia Gas Works or parking lots. Philadelphia City Councilman Bill Green said that if the city used a big asset sale to pay down the pension fund, it could reap millions annually.
"If you were to put $100 million in the pension fund, you make available to the city between $8 million and $10 million a year in perpetuity," he said. "It's money that's available either for the provision of additional services or for investment in things that are going to lower the operating costs of government or for tax reductions."
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