Mayor Nutter just announced that the deficit in the city's five-year financial plan, which stood at $1 billion in November, is now "grave and worsening." After closing that gap, Nutter said, the city finds itself with a new $1 billion deficit. That is the result of what the mayor called the "global recession," which has reduced the amount of money the city takes in for real estate transfer taxes and wage taxes and has created losses in the city's pension fund.
Nutter spoke of balancing brag-worthy city services with a "unwavering commitment to sound fiscal practices, starting with living within our means." He also called on the city, including the four municipal unions to work together and accept the "shared pain" of the financial crisis.
“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.”
Nutter said all city agencies will now be called on to draw up budgets for the coming fiscal year with proposals to cut 10 percent, 20 percent and 30 percent. That will enable Nutter and his staff to travel around the city for "community budget workshops" where residents can set priorities for where the money gets spent.