Nutter's Plan C could cost Phila. 3,000 jobs

Philadelphia's municipal workforce stands to shrink by 13 percent, or 3,000 jobs, under a plan Mayor Nutter outlined yesterday that would go into effect if Harrisburg, still locked in a budget impasse, fails to approve two key elements of the city's budget.

Moreover, taking the bureaucratic steps necessary to eliminate those jobs could begin as soon as mid-August.

The cuts would include the loss of nearly 1,000 positions in the Police Department, which has 6,600 officers, and 200 positions in the Fire Department, which has 2,200 firefighters.

"It's devastating," Police Commissioner Charles H. Ramsey said, noting that several police units could cease to exist.

At an afternoon rally organized by the administration in the City Hall courtyard, Nutter also said inaction by the General Assembly would lead to:

The extraordinary measures were presented as part of a long-awaited Plan C the administration has been developing to cope with the uncertainty related to Pennsylvania's budget standoff.

Ken Snyder, spokesman for Gov. Rendell, said the governor praised Nutter for his vigorous promotion of Philadelphia's cause in Harrisburg.

"As the former mayor, he understands exactly what the pressures are and what the ramifications are of Mayor Nutter's plans," Snyder said. "The governor is fully supportive of those proposals. He has made his support clear.

"The governor will continue to stand shoulder to shoulder with him, fighting for what he needs."

Nutter has met several times with Senate Majority Leader Dominic Pileggi including Wednesday night, Pileggi spokesman Erik Arneson said.

Pileggi (R., Delaware) "reiterated what he has told him many times, that he is supportive in general of the pension changes," Arneson said.

But the sales-tax hike is a tougher sell. Pileggi, Arneson said, "continues to think it is a bad policy for the city to have a higher sales tax than the surrounding areas, and that it will be hard to convince other Republicans, but we understand the city's situation and are willing to work with the mayor to see what we can accomplish."

If the state does not approve the Philadelphia items by Aug. 15, the city may also have to submit the plan, or parts of it, to its fiscal overseer, the Pennsylvania Intergovernmental Cooperation Authority.

All told, the city would need to make $700 million in cuts over the next five years if state lawmakers don't agree to raise Philadelphia's sales tax by 1 cent and allow a two-year delay of $230 million in contributions to Philadelphia's pension fund, as well as other pension changes.

Those actions were essential to balance the $3.8 billion budget that City Council passed last month.

"We are hopeful for timely action, but as much faith as we have, we cannot run a government on hope. We need money," Nutter shouted, his voice growing more ragged by the moment as he addressed a crowd of about 200 under a blazing sun.

Among those in attendance were community organizers, social-services workers, and city officials and employees.

In a show of support for Nutter's agenda, two of the four municipal labor leaders attended: firefighters union president Bill Gault and police union president John McNesby, whose union is engaged in arbitration with the city over a new contract.

The leaders of two other unions negotiating with the city did not attend, though Nutter said they had been invited.

"I've made it very clear I have very significant problems with the city's budget," said Cathy Scott, president of District Council 47, which represents white-collar workers. "I have serious concerns about the pension deferral, and I'm very concerned about $25 million in givebacks [Nutter wants] for health and welfare and pension concessions."

Pete Matthews, president of the blue-collar District Council 33, did not return a call.

How many of the 3,000 job cuts would be layoffs was uncertain. That figure would depend on the number of vacant positions, jobs lost through attrition, and employees moved into other jobs if their positions are eliminated.

"It's a terrible scenario, but it does not have to happen," Nutter said. "We're not asking for a handout. We're asking for a hand. . . . Give us the tools we need to do what we have to do."

Although the sales-tax and pension measures are advancing as independent legislation, it's unclear whether they will be voted on alone or as part of the state budget.

The rally was a communications strategy shift for Nutter, who had largely confined his pleadings to the Capitol hallways in Harrisburg, where he has met with at least 110 lawmakers to drum up support for the city legislation.

This morning, he was expected to discuss the budget crisis with regional business leaders at City Hall.

In his 20-minute rally address, Nutter was careful not to assign any blame to state lawmakers, noting that they were embroiled in their own budget morass. Rather, he encouraged people to call lawmakers, especially any they know outside the Philadelphia region.

"Please take a moment and be in touch with the General Assembly. And be nice," he said. "We have no time to waste. We need action now."

City officials including some from the Health Department and Siobhan Reardon, president of the Free Library of Philadelphia, sent out e-mails Wednesday night to encourage attendance at the rally.

Among those who went were Erica Brown, chief executive officer of Self Inc., which gets about $4 million a year from the city to provide services for the homeless. Her agency has been struggling as a result of the Nutter administration's decision to withhold payments to vendors until a state budget is approved.

"We're trying to do whatever we can to make payroll," Brown said. "But the thing that is hurting us right now is not the fiscal year '10 money, but we have not received the June 2009 payment yet, either." That June payment is about $300,000.

Another nonprofit, Calcutta House, which provides housing, nursing care, and other services to indigent people with HIV and AIDS, said it wouldn't pay state payroll taxes because it had lost its city funding over the state budget crisis.

Other Philadelphia providers are trying to make do without funding from the state. For instance, the YMCA of Philadelphia and Vicinity stands to lose $200,000 a month, "a serious loss," senior vice president Pete Hoskins said.