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Philly Feels Budget Crunch

Philadelphia Tribune, News Report, Eric Mayes Posted: Nov 10, 2008

Mayor Michael Nutter announced on Thursday a series of budget cuts that included more than 200 lay-offs, a freeze on scheduled tax cuts, slashed non-essential services and increased fees.

Mayor Michael Nutter announced on Thursday a series of budget cuts that included more than 200 lay-offs, a freeze on scheduled tax cuts, slashed non-essential services and increased fees.

With a deficit expected to top $1 billion over the next five years, Mayor Michael Nutter on Thursday announced a series of budget cuts that included more than 200 lay-offs, a freeze on scheduled tax cuts, slashed non-essential services and increased fees.

To fix our problem will require bold action for the balance of the fiscal year and beyond, Nutter said in televised statement.

This year alone, the city is faced with a $108.1 million revenue shortfall. The numbers represent a stark economic reversal for the city, which started the year with a $119 million surplus.

However, as the financial crisis worsened, its effects have found their way into the citys budget.

In order to cope, Nutter asked all city departments to look at places they could cut or improve efficiency while maintaining basic services.

On Thursday, a week later than anticipated, Nutter unveiled the specifics of his plan.

It included the elimination of more than 3,050 positions from a workforce of about 28,000. The bulk of those, 1,660, will be cut in seasonal, part-time jobs. Another 600 unfilled positions will be left vacant and about 570 contractual and non-city jobs would be cut. Nutter estimated about 220 city employees would be laid off.

In addition, employees making more than $50,000 a year will be required to take a five-day unpaid furlough this year and next.

Nutter also announced salary cuts between 3.75 and 5 percent in his administration.

Approximately 200 vacancies in the police department would be left vacant. But, Nutter stressed that no police officers or firefighters would be laid off, though overtime will be reduced.

That should save the city approximately $8 million.

The city will also pull five fire engines from service and remove two ladder trucks. The change will not reduce response times, city officials said.

Weve achieved substantial savings with no police or fire layoffs, Nutter said. No fire station closings and no reduction in emergency medical services.

However, a pledge to put 400 more police officers on the street by years end will not materialize.

Instead, officials said, 200 more officers will be deployed through shifts within the department.

Cuts also included the closure of 11 of 54 branch libraries and 68 of 81 public pools.

All of Philadelphias recreation centers will remain open. Those closures are expected to save approximately $18.7 million. City officials said they hoped to be able to re-open the pools after the financial crisis has passed.

Other spending cuts included a reduction in the amount of trash the city will pick up. Residential customers will now be allowed to put only eight bags of garbage as opposed to 12. The city will also stop plowing streets that require special equipment to keep clear.

In addition to cuts, the administration will be raising fees and fines and charging organizations for the use of city services.

As an example, the city will stop underwriting the cost of police and clean-up services during and after parades.

Among the cuts outlined Thursday was $355,000 for the Mummers Day parade.

One area of the city budget was left untouched. Philadelphia will continue to contribute $38.5 million to its public schools.

City officials will also be vigorously looking for more revenue estimating that the city can raise approximately $9 million through tougher collection of delinquent taxes, closing tax loopholes and increasing some fines and fees. Another effort to increase revenue involved a freeze on all scheduled tax cuts.

Nutter had promised to lower the business privilege tax. It will now be frozen at the current level until 2014.

In addition, wage tax cuts will be slowed. That will keep approximately $230 million flowing into city coffers.

Many of the cuts put forth by the mayor will go into effect immediately. Others need Council approval.

Nutter, this week, proposed seven pieces of legislation related to his proposed cuts. Council will need to take action before it adjourns for the holidays on Dec. 11.

The mayor met with Council on Wednesday evening in a four-hour budget session that was closed to the public.

The Philadelphia Inquirer and the Daily News filed suit on Wednesday morning alleging the meeting was a violation of the Sunshine Act.

Hearings were held on Thursday in front of Common Pleas Judge Gary DiVito. There was no word on Thursday afternoon on when a ruling might be issued.

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