Pennsylvania Intergovernmental Cooperation Authority (PICA)

The Pennsylvania Intergovernmental Cooperation Authority (PICA) is a Commonwealth of Pennsylvania authority created by the General Assembly in 1991 in response to a severe fiscal crisis in the City of Philadelphia, which was then running growing deficits with a deteriorating credit rating.^[1] It is not a City agency and the Mayor and City Council do not control it. The PICA Act authorized it to provide financial oversight, issue bonds and require the City to develop and adhere to Five Year Financial Plans.^[2] More than three decades later, the authority continues its oversight role: each year the City submits a plan, and the PICA board reviews whether it is balanced on reasonable assumptions.

1 Origins

By 1990 and 1991 Philadelphia faced large deficits, and the state stepped in with legislation permitting the City to borrow to eliminate its deficit in exchange for state oversight. The PICA Act clarified that the authority's debt "shall not be a debt or liability of the Commonwealth or a city of the first class." Its stated objectives included enabling access to capital markets for deficit elimination, fostering sound financial planning, and fiscal measures such as better tax collection, asset sales and procurement reform.^[2] PICA made available $1.138 billion in direct assistance to the City through debt issuance.^[3] Its original bond-issuing powers have expired and it is now limited to refinancing existing PICA debt.^[3] The episode is part of the City's political history and the relationship between the City and the state (see Pennsylvania State Government and Philadelphia).

2 Structure and leadership

The board has five voting members, one each appointed by the Governor, the President pro tempore of the Senate, the Senate minority leader, the Speaker of the House and the House minority leader, and two non-voting ex officio members: the Secretary of the Budget of the Commonwealth and the City's Director of Finance.^[4] As of October 2026, PICA's website lists the chair was Alan C. Kessler, with Rosalind W. Sutch as vice chair, Michael A. Karp as secretary/treasurer, Patrick Burns as assistant secretary/treasurer and Kevin Vaughan, who had been chair for ten years, as a member.^[4] Marisa G. Waxman, AICP, is Executive Director, with Rob Call as Deputy Executive Director.^[5] The staff is small.

3 Powers

The key power is review of the Five Year Plan. Under the Act, the City must produce a plan annually and PICA must find it balanced on reasonable assumptions; the Act (Act 6 of 1991, 53 P.S. § 12720.101 et seq.) provides that the authority approves a plan that meets its criteria by a “qualified majority vote,” defined in section 104 as a majority of the board that includes any four voting members (a four-of-five threshold, per a secondary summary).^[3] If the City is out of compliance, PICA may direct the Commonwealth's budget secretary to withhold state financial assistance. PICA also conducts independent audits and financial examinations, and receives reports from the City on its financial results. The authority therefore functions as a check alongside the independent City Controller, the Council, and the credit rating agencies, which have cited PICA oversight in their analysis.

4 The PICA tax

PICA receives a portion of the wage, earnings and net profits tax paid by residents. After debt service and its own operating costs, it remits the balance to the City's General Fund. In the FY27 budget this "PICA City Account" is projected at $796.9 million, about 12 percent of General Fund revenue and the majority of the $1.23 billion the City counts as revenue from other governments.^[6] The City's wage tax rate and the PICA share are shown together in Philadelphia Taxes; residents pay one combined rate (3.735 percent from July 2026) and do not see the split on their pay stubs.

5 Recent plan reviews

PICA's board unanimously approved the FY26-30 Five Year Plan in July 2025 after determining it met the requirements of the PICA Act and the Intergovernmental Cooperation Agreement.^[7] On July 28, 2026 it unanimously approved the FY27-31 Plan, finding the projections reasonable; its staff recommended continued building of reserves, and the City noted that unrestricted reserves remain below the 17 percent benchmark recommended by the Government Finance Officers Association.^[8] The approval came after Council adopted the FY27 budget on June 11 (see Philadelphia City Budget Process). The cycle gives residents and advocates a second venue for budget analysis beyond Council; PICA publishes its board materials and annual reports.

See also: Philadelphia City Budget Process, Finance Department, City Treasurer, Philadelphia Taxes, Pennsylvania State Government and Philadelphia.

References

1. Pennsylvania Intergovernmental Cooperation Authority, "About PICA" (picapa.org).
2. Pennsylvania Intergovernmental Cooperation Authority Act for Cities of the First Class (1991), as summarized at picapa.org.
3. Wikipedia, "Pennsylvania Intergovernmental Cooperation Authority" (secondary summary).
4. Pennsylvania Intergovernmental Cooperation Authority, "Board Members" (picapa.org).
5. Pennsylvania Intergovernmental Cooperation Authority, staff listing and July 28, 2025 board minutes (picapa.org).
6. City of Philadelphia, The Mayor's Operating Budget in Brief for Fiscal Year 2027 (phila.gov).
7. City of Philadelphia, "City receives unanimous approval of Philadelphia's 2026-2030 Five Year Plan from PICA board," July 28, 2025 (phila.gov).
8. City of Philadelphia, "Mayor Parker's Fiscal Year 2027-2031 Five Year Financial and Strategic Plan unanimously approved by PICA board," July 28, 2026 (phila.gov).