Soda tax off table; Nutter vows cuts
Council passed a budget without the controversial levy. The mayor will target police, fire, and libraries.
Mayor Nutter resolved Thursday to slash police and fire companies and reduce branch libraries to four-day weeks after City Council buried his proposed sugary-drinks tax and passed a $3.9 billion budget that he characterized as fiscally irresponsible.
Council approved a 2010-11 budget that closed Nutter's projected $130 million shortfall by raising property taxes 9.9 percent, establishing a $300 trash-collection fee for commercial properties, and levying a new tax on tobacco products other than cigarettes.
Instead of passing Nutter's proposed beverage tax, Council cut his projected cash reserves by about $20 million - to $42 million - a margin that Nutter said was too thin to work with.
A subdued Nutter said Council's budget forced him into making the cuts in order to keep the city from running out of money to meet payroll or other bills.
"Council is unfortunately proposing to spend money that is not really there," Nutter said. "We will literally run out of money over the course of fiscal year 2011."
To avoid that, Nutter said the city would trim an additional $20 million and 339 positions from the budget. About $4.5 million of that had been allocated for new services to begin in 2011. The rest, though, will be bled from city services such as police, fire, and libraries. Nutter said the city would:
Eliminate two police-recruit classes in 2010-11 to save $4.5 million, reducing the police force from about 6,600 personnel to 6,400. The reductions would "certainly, unfortunately, have an impact out on the streets," Nutter said.
Close two fire companies, cutting 40 positions and saving $3.6 million. The companies have not been identified.
Cut $2.5 million from the Free Library budget, eliminating 35 jobs and reducing branch schedules from five days to four. The Central Library would not be affected.
"I truly believe that Mayor Nutter does not want to cut services to libraries, city pools, or anywhere else - nor does City Council," said Amy Dougherty, executive director of the Friends of the Free Library of Philadelphia. "I think that they're still bargaining."
John McNesby, president of the Fraternal Order of Police in Philadelphia, said the loss of two police classes would result in 220 to 240 cuts by attrition over the next year.
"You're 200 down in the City of Philadelphia; you might as well lock your windows and lock your doors and not take a vacation in Philadelphia," McNesby said.
Bill Gault, president of Local 22 of the International Association of Firefighters, asked: "How much more public safety can he take?"
Last year, McNesby shrugged off Nutter's threatened police cuts, saying the mayor would not sacrifice public safety, which has been his greatest area of success. McNesby was similarly confident on Thursday.
"There's always money to be found," he said.
But prospects of compromise are dimming by the day.
"The decisions that we made are final in terms of the budget and those particular revenue measures," Councilman W. Wilson Goode Jr. said. "I don't think Council is in agreement that those are the cuts that should be made, or need to be made."
Nutter never had a majority of Council for his sweet-drinks tax, and members are loath to increase the property-tax hike from 9.9 percent to 12 percent, an option Nutter asked Council to consider before Thursday's meeting.
"I did not initially propose these cuts to city services and I do not want to make them," Nutter said.
Council members contend the city can get by on the $42 million fund balance their budget provides for. If the city faces a cash crunch over the course of the year, Council members, say the administration can slow the pace of hiring or eliminate unfilled positions in less-critical departments.
"We have passed today a reasonable and responsible budget, with a $42 million fund balance that could be bigger. I think, frankly, we've done a responsible thing today," Councilman and Democratic Whip Darrell L. Clarke said.
The city has gotten by on smaller fund balances before.
"The fund balance is a security blanket for a mayor. Whether it's unexpected things like a snowstorm or another dip in the economy, having a healthy fund balance provides protection," former Managing Director Phil Goldsmith said.
Pete Matthews, president of AFSCME District Council 33, the city's blue-collar union representing about 9,400 workers, said he saw "a battle brewing in contract negotiations" over the budget.
"I see some problems ahead for filling the vital services this city needs," Matthews said.
Administration finance experts say Council's budget creates a serious cash-flow problem. Specifically, the projected $42 million fund balance includes a big reimbursement from the state for social-services expenses.
But that money will not arrive in time for the city to meet all its obligations at the end of the year, finance director Rob Dubow said. In short, the city will not have the money to pay its bills, unless further cuts are made.
The prospect of running out of cash also worries members of the Pennsylvania Intergovernmental Cooperation Authority, which has oversight over the city's long-term fiscal planning.
"It does appear that what Council is doing would essentially leave no cash at all in the general fund at the end of the fiscal year," authority chairman James Eisenhower said.
Council's budget consultants advised against the $42 million fund balance, warning that anything less than $54 million would not be prudent.
But many on Council are skeptical that a fund balance $10 million short of what consultants recommend requires a response as drastic as Nutter's.
Councilman Bill Green, a leading administration critic, called Nutter's reaction a form of "retribution" for the failure of the tax on sugar-sweetened beverages.
"It's sort of like the kid on the playground that doesn't get their way. 'It's my ball, and if you don't play by my rules, I'm taking my ball and going home,' " Green said.
Gloria Guard, president of the People's Emergency Center shelter, one of the social-service providers that supported Nutter's efforts to generate more revenue, called the $500,000 cut to supportive housing programs, "Death by a thousand razor cuts."
"Truly, these cuts will mean fewer shelter beds, fewer meals, fewer social workers," Guard wrote in an e-mail.
For more details on the budget cuts, go to www.heardinthehall.com.EndText