Four things that will dominate the budget process

Yesterday morning, City Council kicked off it's budget process by holding a hearing on Mayor Nutter's five-year fiscal plan. Over the next three months, Council will review the budget of almost every city department and agency.

Now that budget season has officially started, what can we expect? What issues, ideas, and problems will dominate the debate? Here are four central themes to watch out for.

Trash fee and soda tax. Without a doubt, Nutter's two proposals to increase revenue will be the most controversial topic in the hearings. In fact, Council President Anna Verna used her first question yesterday to ask if the administration had considered alternatives in case neither idea has enough support to pass. Last year, it was Council that came up with an alternative to increasing property taxes (Nutter's original plan). It will be interesting to see if any members offer other ways to generate revenue in the coming months.

Cuts: Too much, not enough, or just right? In his last budget, the Mayor took big steps to deal with a $1.1 billion deficit over five years. However, this year's budget includes only $33 million in cuts. Nutter says more service reductions will be too painful, but expect some people to contest that point -- and others to oppose any program cuts at all.

Contract negotiations. The biggest unresolved issue in the budget is new contracts for three of the four city unions. Last year's budget assumed no wage increases and steep cuts in benefits, for a savings of $125 million. But the police union was recently awarded a new contract that will cost $80 million over five years. That puts a lot of pressure on the administration to find savings in its negotiations with the other unions.

Pensions, pensions, pensions. Like almost every municipality, Philadelphia has pension problems. According to testimony from Mayor Nutter's chief of staff Clay Armbrister, Philly's pension fund lost a significant amount of money when the stock market tanked last year. The city needs to deal with this problem.

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