Controller Alan Butkovitz offers plan on creating 4,400 jobs in Philly

Money
File photo.

City Controller Alan Butkovitz claims that if many local universities and hospitals would increase their local spending by 25 percent, it could create up to 4,400 jobs in Philadelphia.

The benefits would include $642 million in direct local spending and $14 million in tax revenues each year, according to Butkowitz’s report.

“We identified a $2 billion market that is not being exploited locally,” Butkovitz said. “They’re spending about $2 billion to purchase products that are manufactured elsewhere. They’re doing a pretty good job of hiring locally; but on the manufacturing side it’s a pretty small number that they’re buying.”

Butkovitz said that other cities such as Cleveland, Detroit and Baltimore have had success with similar strategies.

But leaders of institutions identified in the report aren’t jumping into action just yet.

“The first part of the theory, I think Mr. Butkovitz has spot on,” said Ed Turzanski, vice president for government and community relations at LaSalle University. “And the second part is if we actually have the resources we need so we can go on a buying spree. People are very careful with their dollars.”

One anchor institution identified in the report indicated they already support the local economy, but support Butkovitz’s findings.

“Peirce has a longstanding commitment in buying locally and contributing to the Philadelphia economy in its entirety … In fact, over 80 percent of our annual spend is with vendors and suppliers in the region,” said Brad Hodge, vice president of finance at Peirce College. “We look forward to working with other notable organizations and fellow anchor institutions to extend these practices and further support the city as Mr. Butkovitz has outlined.”

Butkovitz said while the report does not call for a mandate, it indicates a potential way to drive economic growth.

“This is a Keynesian approach to job production, instead of just tinkering with taxes in very minuscule decimal points and arguing that it is creating jobs, which it is not,” Butkovitz said. “What about using purchasing power, which is local, to generate jobs?”

Butkovitz said his office will continue researching the findings gathered in this report.

By the numbers

$642 million
-Estimated value of a 25 percent increase in schools’ and hospitals’ spending on locally manufactured goods

$14 millions
-Estimated tax revenue of such an increase

$2 billion
-Estimated amount currently spent on manufactured goods by these institutions

Philadelphia anchor institutions studied in this report

Universities

-Art Institute of Philadelphia
-Chestnut Hill College
-Community College of Philadelphia
-Drexel University
-Chestnut Hill Hospital
-Drexel University College of Medicine
-Children’s Hospital of Philadelphia
-Holy Family University
-La Salle University
-Moore College of Art and Design
-Peirce College
-Philadelphia College of Osteopathic Medicine
-Philadelphia University
-Restaurant School at Walnut Hill College
-Saint Joseph’s University
-Temple University
-Thomas Jefferson University
-University of Pennsylvania
-University of the Arts
-University of the Sciences in Philadelphia

Hospitals

-Albert Einstein Medical Center
-Aria Health
-Cancer Treatment Centers of America at Eastern Regional Medical Center
-Fox Chase Cancer Center
-Hahnemann University Hospital
-Hospital of the University of Pennsylvania
-Jeanes Hospital
-Nazareth Hospital
-Pennsylvania Hospital
-Presbyterian Hospital
-St. Joseph’s Hospital
-Temple University Health System
-Thomas Jefferson University Hospital
-Veterans Administration Medical Center

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