Financial Crisis Slams City -- Mayor asks for More Cuts

The national economic downturn continues to bludgeon the city budget. Mayor Nutter just announced that the city's budget shortfall could be almost double the amount originally anticipated. Nutter put the gap at $650 to $850 million over the next five years, up from the $450 million shortfall he announced last month.

"The national and global crisis is having an impact in cities and states all across America," Nutter said.

Nutter revealed several cost savings measures today, although the city will not reveal a full financial plan for several weeks. All exempt city employees will not receive an expected $1,100 bonus this year -- saving the city about $5 million. And Nutter has asked independent elected officials, including City Council, to cut their budgets by five percent -- saving the city an estimated $10 million.

Nutter is also asking city departments to find more cuts, on top of the reductions he asked for a month ago. He would not discuss what would be slashed, although he made clear that everything is on the table -- from workforce reductions to eliminating tax cuts.

"Let us be under no illusion about the size of the challenge we face," Nutter said.

Asked how the city would pay bills if it couldn't do any short term municipal borrowing, Nutter was vague.

"Of course if we weren't able to borrow it, we will certainly feel a squeeze," he said. "It really depends on what's going on over the next few months."