Low on dough, Nutter gives an ultimatum; Government can't run 'solely on hope,' Mayor says

BEFORE a crowd of city workers, community advocates and social-service groups in the City Hall courtyard, Mayor Nutter yesterday threatened massive cuts if Harrisburg lawmakers don't approve the city's budget requests.

"We are hopeful for timely action, but as much hope and faith that we have, we cannot run a government solely on hope," Nutter said. "We need money."

Nutter avoided direct criticism of legislators, praising the Philadelphia delegation in Harrisburg. But he said that Philadelphia was in a precarious financial position and was running out of time.

"It is my job, it is my duty to protect and deliver essential services for the city of Philadelphia," he said. "It's what you need, it's what you deserve."

After all the twists and turns over the past six months, it's hard for most people to keep track of where the budget process stands. Here are some questions and answers:

Q: I thought the mayor passed a budget in May; why is this still going on?

A. The mayor and City Council did approve a budget. But it requires approval from the state for two measures - a temporary 1 cent increase to the city sales taxes and some changes to how the city pension fund is replenished. Without those approvals, the city faces a $700 million gap over five years.

Q: What happens if the city doesn't get what it wants?

A. It will start implementing a "doomsday budget" to make up the $700 million. Nutter yesterday said that the city would eliminate 3,000 jobs and essentially cease operations at the Recreation Department, the Free Library, Fairmount Park, the Commerce Department and the City Planning Commission. Weekly trash collection would be cut to every other week.

Q: That sounds terrible. Why won't Harrisburg approve what the mayor asked for?

A. Just like the city, the state has its own budget problems. Lawmakers in Harrisburg haven't been able to agree on how to manage them. They've been deadlocked for a month now. And there is a Republican faction in Harrisburg that opposes tax increases in general.

Q: Is anything happening in Harrisburg?

A. There has been some progress this week on legislation that addresses the sales-tax and pension proposals. That legislation - which is separate from the main budget - was voted out of committee in the state House of Representatives Wednesday and could come up for a full vote next week. Corresponding legislation has been introduced in the state Senate.

Q: What if the state just drags things out? Can the city wait until October or November for an answer?

A. Nope. It can't afford it. The city's budget is balanced with the expectation that those state approvals happen right away. So, if the city gets no word from Harrisburg over the next couple of weeks, it'll start taking steps to make cuts by mid-August.

Q: And how about the actual state budget? When will it pass and what does that mean for the city?

A. It's anyone's guess when the state budget will pass. Gov. Rendell is now calling for passage of a scaled-down "bridge" budget next week in order to pay state workers and vendors while negotiations on a final budget continue. Because the city receives program reimbursements from the state, the city needs that to be resolved in Harrisburg soon, too.

Q: What happened to the proposal to raise property taxes?

A. That was part of Nutter's original budget proposal, which City Council opposed. The property-tax hike was not in the version on which they agreed.

Q: I'm a city worker. What's going to happen to my health care and pension because of this crisis?

A. Nothing right now. The city has halted vendor payments, but is still paying payroll and employee benefits. But, the city is also negotiating new union contracts and has made clear that it wants workers to pay-in more for benefits. So, changes may be coming.

Q: Will yesterday's rally help Nutter in Harrisburg?

A. Hard to say. Critics think legislators might be angry with Nutter for using the doomsday budget as a political weapon. But he is running out of cash and options.