Nutter floats budget proposals to City Council | Philly

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Tuesday, March 10, 2009

Nutter floats budget proposals to City Council

Want a sneak peek at Nutter's budget? We got our hands on an early copy of the mayor's budget circulating around City Hall today. There are actually three proposals, which they call A, B and C and we'll call Reasonable, Scary, and Move to New Jersey. We'll have more in the coming days, but here is a basic outline of what to expect from the Mayor next week. I was going to post the whole thing, but it's basically impossible to make sense of without a lot of explanation.

One qualifier: Below is based on his ideal budget plan A, but tax hikes and service cuts could easily increase if certain portions fall through.

Some taxes are going up. As predicted, Nutter will be seeking to raise taxes to deal with the budget hole. He wants to increase the Sales Tax by 1% and the Property Tax by 13%. However, he doesn't want to touch the Wage Tax or the Business Privilege Tax. It's worth noting that the amount of cash generated by tax hikes-- about $570 million-- is significantly more than the $307 million that will be cut from departments.

Pray for help from Harrisburg. Almost $600 million of the rebalancing plan will require some kind of action from the state. The biggest chunk-- $335 million-- comes from a 1% increase in the sales tax. That increase is supposed to be temporary, but can't be done without authorization from Harrisburg. The other large piece comes from accounting changes in the city's pension fund that will net about $254 million.

Big trouble in Uniontown. Nutter's budget makes two big assumptions about union contracts. First, he is counting on saving $125 million over five years from “benefit savings.” That probably means healthcare, since those are easier to get under control in the short-term than pension costs. Nutter's proposed budget also includes no wage increases for any municipal workers. If this is the plan, expect extremely tough negotiations and a possible strike.

Fees, fees, and more fees. We might not be getting a trash collection fee, but the price of government service is going up almost everywhere else. Expert to pay more for EMS services, commercial property collection, accessing public records, using health centers, and number of other city services.

The alternative is worse. Despite the cuts and tax increases, Nutter's ideal proposed budget is nothing when compared with the alternative. If he can't get his tax hikes and other changes approved by Harrisburg, Nutter will be forced to drastically cut city government. The other scenarios include major reductions to almost every city department and possibly hundreds of layoffs.

Update: Catherine Lucey and Chris Brennan have more in today's Daily News.

Posted by Ben Waxman @ 5:23 PM Permalink | 15 comments

Comments

Posted 07:27 PM, 03/10/2009

dreinterests

umm, how many other counties are there in PA that you can move to without going to NJ, home of a giant budget deficit? At any rate, you'd better take a cab if you have a heart attack, the EMS fees are already expensive and generally not reimbursed. I think it's despicable that he wants US to pay more and get so little form the unions. We have more city workers making more than we can afford. it's that simple. I'm ready for a strike, I'd expect nothing less from real change.

Comment removed.

Posted 07:54 PM, 03/10/2009

CleanupPhilly

Is there nothing in the budget about the common sense items that require the most political heavy lifting, like collecting the $522 million in overdue property taxes by changing the way the city goes about it? Or collecting forfeit bail? Selling the debt to a private collector? Selling the 2,000+ empty vacant properties the city owns? Forcing the RDA to sell or otherwise put into active property tax paying status the 2,000+ properties it holds? Nothing on how to change the structure of the way the old-timers tried to have government own and manage property that it can't afford? Nothing about debt collection of the debt that is the most obvious, property taxes? That is the really the worst case scenario politically for Nutter to place himself in. Harrisburg has no interest in giving us any money, and if they did, they should likely put a proviso on the money that it comes with a requirement to sell or collect overdue property tax lien debt and get out of the business of having the city be bailbondsmen for those who don't show, producing $1 billion in forfeit bail debt owed the city. What will he do when those are Harrisburg's conditions?

Posted 07:58 PM, 03/10/2009

CleanupPhilly

Rendell sold the part of the property tax debt to a private collector which put the city from the brink of bankruptcy to surplus status. Overdue property taxes really are an asset that the city can and must use. Why not compare Rendell's sale of the property tax debt to the status currently? What obstacle is so great that this can't be done? The city really will have to cut services like never before if it simply can't politically manage to get the overdue property tax revenue of half a billion and get property back into a paying property tax status.

Posted 08:12 PM, 03/10/2009

Philly Phorever

Let the sanitation workers strike - then we can privatize!!

Posted 09:27 PM, 03/10/2009

ConservativePatriot22

Filthadelphia you are right, blame the Republicans for the financial difficulties of cities that have been lead by Democrats for over 50 years. Your are a genius, let us blame everything on Bush. You sir/ma'am are stupid, look at the facts. The state of PA has been lead by a Democrat since 2003 and Philadelphia has been controlled by Democrats for over 50 years, but wait its Bush's fault, and you cant forget Cheney because he had a lot of power being vice president and everything.

Posted 09:31 PM, 03/10/2009

ConservativePatriot22

Blame everything on Bush because he had everything to do with the financial hole that Philadelphia and PA DEMOCRATS dug themselves into. Here's an idea, everybody at city hall and in harrisburg takes a pay cut. Everybody from the governor to the mayor to the worthless representatives to the freakin janitor and see how much money that will save.

Comment removed.

Posted 10:13 PM, 03/10/2009

spreadheadpa

filth...what does GW bush have anything to do with 40 years of democratic control of the city? your an idiot!

Posted 10:48 PM, 03/10/2009

cecelia

I agree with captainden. Your right on everything. These problems r not from Bush but this democratic city. City workers need to pay their bills just like everyone else.

Posted 09:28 AM, 03/11/2009

Adam Lang

The biggest problem in our budget is pension costs. Bush didn't chose to underfund our pension. City Hall did.

Posted 05:06 PM, 03/11/2009

NewtownJoe

I feel sorry for you people who live in the city and work and pay your taxes so all the deadbeats can live off your hard work. By far the best thing I ever did was leave the city the day I got out of college. Everyone blasts Republicans for benefiting the top 1%. When the current Dems are done half this country will be working and paying for the other half that will not be working or paying. It's a disgrace!

Posted 09:39 PM, 03/13/2009

Philly Phorever

Philly is doing fine and Nutter's even better. It's all goin' to be alright.

15 comments

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