Budget legislation to avoid doomsday gets amendments, maybe delays

TIME IS running out, but Mayor Nutter still has miles to go before the city's budget requests get resolved in Harrisburg.

Here's where the tortuous process stands:

Legislation that grants the city permission to raise the sales tax temporarily and to defer some pension payments - both necessary to avoid drastic budget cuts - is up for final passage in the state Senate today.

But, because the bill was amended in the Senate, it must - if approved - go back to the state House of Representatives for another vote. If the House approves the bill, it would then go to the governor for his signature.

The new version of the bill includes amendments that would bar elected officials from the controversial Deferred Retirement Option Plan (DROP) and would require the city to freeze the pension plan and create a lower-cost plan for all new city employees, which would have to be negotiated with municipal unions.

Nutter earlier this year criticized elected officials' participation in DROP. And he has already proposed shifting new city workers to a lower-cost pension program that would combine a 401(k) with a traditional pension.

Nutter would not comment on the specifics of the amendments yesterday, but said that he was concerned that the changes would slow the process.

"Our preference was no amendments to the bill," Nutter said. "We wanted to stay on a particular time path. I'm not going to parse through the different pieces."

If the state does not soon approve the city's budget requests - worth $700 million over five years - the mayor will have to implement a dire budget that would prompt layoffs of 3,000 city workers and close libraries and recreation centers. That plan must be submitted to the Pennsylvania Intergovernmental Cooperative Authority at the end of the month and would be implemented in mid-September.

That means the city is three weeks away from doomsday.

The timeline for how this bill will proceed in the House, if it passes the Senate, was unclear yesterday. No sessions to address it had be scheduled for the week, although that could change, said Barb Fellencer, spokeswoman for state Rep. Dwight Evans.

Bob Canton, spokesman for House Speaker Keith McCall, said that the House has attorneys reviewing the bill. Canton said that the changes require due diligence, even though Philadelphia needs speedy action.

"We understand the urgency for the legislation; we understand the impact it has on the city," he said.

Some of the amendments also would have a statewide impact. The amended bill would require that pension funds rated "severely distressed" be taken over by the Pennsylvania Municipal Retirement Board. That would not apply to Philadelphia.

Meanwhile, local union leaders spoke out against the amendments yesterday, saying that the pension changes would be bad for city workers.

"We reserve the right to bargain," said John McNesby, president of the Fraternal Order of Police. "We're going to be working on trying to get some changes on that amendment. You can't give up the right to bargain for future employees."

Bill Rubin, who serves on the Pension Fund Board for District Council 33 of the American Federation of State, County and Municipal Employees, also questioned the pension amendment.

"We will do everything legally and politically possible to stop this from taking effect," Rubin said.