Nutter: $1B in November was 'painful' but an additional $1B means 'drastic choices'

AFTER CLOSING a $1 billion budget gap in November, the city now faces another $1 billion shortfall over the next five years, Mayor Nutter said yesterday.

"The first billion-dollar deficit required painful choices," Nutter said, during an address to top staff and the news media. "This second billion-dollar deficit will require drastic choices throughout city government."

He is asking department heads to prepare reports on the impact of a 10 percent, 20 percent or 30 percent budget cut to their operation.

Nutter said that declining tax receipts and poor performance by the city pension fund are to blame for the new shortfall - which includes an expected $47 million deficit in this fiscal year.

Calling for shared sacrifice, Nutter said that the city must prepare to make major changes in the budget for fiscal 2010, which begins July 1.

"We cannot spend what we don't have," Nutter said. "We cannot use one-time fiscal gimmicks. And we will not play games with our fiscal books."

Responding to critics, who said that he didn't include the public in his cost-cutting process in the fall, Nutter announced a new budget process that will allow time for public debate and input on the fiscal 2010 budget.

"We and I heard you," Nutter said. "And I really did hear our constituents out there, and we will do a better job of explaining those challenges and seeking their input before we make future choices."

The administration will seek citizen input through PhillyStat sessions and community budget workshops. To allow time for this, Nutter plans to make his budget proposal on March 19, about two months later than the budget is typically unveiled.

Department reports on the various cut scenarios are due Jan. 30. This data will be presented to citizens to get feedback on which services they prioritize.

"Everything is on the table - programs, services, tax and fee increases, contracts that are already in place, city cars," Nutter said. "Just because something is on the table for discussion and debate doesn't necessarily mean that we are going to do it, or implement it, but I think having the information helps us to make better and more informed decisions about an array of options."

Asked if the budget hole means layoffs or tax hikes, Nutter said that he would not "prejudge the process." But he repeatedly used the phrase: "Everything is on the table."

Police Commissioner Charles Ramsey said that making cuts would be a challenge.

"There would have to be reductions of service and that would affect personnel," Ramsey said. "We'll do the best we can with whatever we wind up with."

Nutter also told unionized city workers to prepare to help shoulder the load.

"I'm calling on our four municipal union leaders, whom I respect greatly, and all of our public employees to be prepared to share in the pain and sacrifices as we move forward," Nutter said.

The message wasn't warmly received yesterday.

Brian McBride, president of Local 22 of the International Association of Fire Fighters, accused Nutter of "taking advantage of this recession to shrink the city work force."

"New day, new way? Bull," said McBride, who was waiting on a briefing with the mayor. "He can raise taxes. He can find revenue that's owed to us out there and get that in."

Pete Matthews, president of District Council 33, which represents blue-collar workers, said: "Sacrifice meaning sacrifices in terms of our jobs or benefits? No."

Cathy Scott, president of AFSCME District Council 47, which represents the city's white-collar workers, said through a spokesman that she was waiting for more information before commenting. Fraternal Order of Police President John McNesby did not return a call for comment.

Councilman Jim Kenney, Nutter's chief defender on budget matters in Council, said that the new deficit is "daunting" considering that Nutter already has dealt with a $1 billion shortfall in the five-year financial plan. Kenney added that city residents will now have to make tough choices with Nutter.

"Having your say does not mean simply saying: 'Don't cut anything,' " Kenney said. "We can't go bankrupt."

Councilman Bill Green, a frequent critic of Nutter, said that he's concerned about the delay before Council sees the budget.

"I think it is a very large mistake to wait until March 19 to come before us with a budget," Green said. "There's no reason not to have a budget before us and the people in January."

In November, Nutter announced that he would delay tax cuts, lay off workers and close libraries and fire companies to close the budget gap. The library and Fire Department plans drew huge complaints. For now, library supporters have a reprieve, after a judge's ruling that Nutter couldn't close branches without Council approval. *