We've got major budget action today in the city. Mayor Nutter and City Council are currently meeting with Philadelphia's Harrisburg delegation at the Bellevue Hotel, to lay out why they need state approval for several key measures in the city budget.
Half an hour in, the session has already grown heated. State Rep. Mike O'Brien just left the closed door meeting, saying he wasn’t going to be “lectured” on the city’s finances. O’Brien said he has asked the city’s lobbyists and the administration why they won’t consider diverting the $87 million the city’s expected to receive in state gaming taxes towards the budget problems. So far, O'Brien said, he's gotten no answers.
O'Brien noted that the mayor has spoken of meeting with 110 members of the general assembly, but “I’m not one of them. And I’m not going to sit there and be lectured on the need for the money until my question is answered.”
The city's share of state gaming revenue is currently earmarked for wage tax relief. Under state gaming law, the city could raise wage taxes if city tax collections have dropped by more than 2 percent. In May, city Finance Director Rob Dubow said that revenues had dropped by 1.94 percent, just shy of the necessary amount.
Also, the city cannot impose a new tax increase once the fiscal year has started. The current fiscal year began July 1, so a wage tax increase is off the table for now, anyway.
The budget agreed on by Nutter and City Council counts on getting Harrisburg approval for several measures – a temporary increase in the city sales tax and some changes on how the city will pay into the pension fund. Without state authorization for those items, the city will have a $700 million gap to fill over the next five years, which will likely mean devastating cuts to city jobs and services.