Budget blues again

One year after Mayor Nutter announced the closure of fire companies, pools and libraries to combat a financial crisis of "incredible proportions," his administration announced that the city would face a $31 million deficit unless further reductions are made next year.

City Budget Director Stephen J. Agostini and Nutter's chief of staff, Clay Armbrister, laid out for City Council Monday afternoon the ingredients to the newest alarm, which include faltering wage tax revenues, expected state revenue that didn't make it into the state budget, and costs expected from new casinos.

Agostini has already asked department heads to slice their spending by 7.5 percent next year as he prepares to present a 2011 budget to Council in January or February. Agostini would not say how the city would close the deficit.

This mini-crisis is not as grave as the forecasts at this time last year, when the city had to erase a $108 million deficit. The branch libraries were never closed after City Council members prevailed in a lawsuit. Some pools were opened this summer. Agostini is not asking for immediate cuts, only that departments make up for this year's $31 million hole in next year's budget.

The deficit could deepen, however, if the city does not achieve the $25 million in annual savings it projects from its employees. That includes the four municipal unions whose contracts are being negotiated, as well as the non-union city employees.