Philadelphia expects to end fiscal year $31M in the red

By CATHERINE LUCEY
Philadelphia Daily News

luceyc@phillynews.com 215-854-4172

After a year of cuts and tax hikes to deal with substantial budget losses, the city's financial woes aren't nearly over yet.

Budget Director Steve Agostini told City Council members yesterday that the city is on track to end the fiscal year $31 million in the red. Agostini attributed the projected deficit to a number of factors, including a decline in the city's expected wage-tax revenues and a loss of state funding for social services and police.

This gap is smaller than this time last year, when Mayor Nutter announced a $108 million deficit. But it could grow if the city doesn't achieve the $25 million in annual savings it expects from city union contracts, which are still not resolved.

"That is a downside for us," Agostini said, noting that the city can't control the contracts for police or fire departments, which will be decided through arbitration.

Agostini, who has already asked city departments to make cuts of 7.5 percent in their budget plans for the upcoming fiscal year, wouldn't detail how the city will close the gap. He stressed that he is closely reviewing every hire and expenditure to find savings.

The city's entire budget is about $3.8 billion.

The city ended the 2009 fiscal year on June 30 with a deficit of $82 million. Uri Monson, executive director of the Pennsylvania Intergovernmental Cooperation Authority, said it was only the second time the city had ended in the red since PICA was put in place to oversee the budget in 1991.

That hole was plugged through cuts and a temporary increase in the city sales tax. But Monson said this year's projected gap should be easier to manage.

"It's a manageable number - a quarter of what it was a year ago," Monson said. "There was a sense of panic last November. There were so many things happening so fast and so far beyond the city's control."

Still, Clay Armbrister, the mayor's chief of staff, stressed to Council that the city still has financial pain ahead despite a turbulent financial year.

"We're not out of the woods by any means," Armbrister said.

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Comments

Posted 07:39 AM, 11/10/2009

pbphila

And after all that... Here we go again, Oops! $31 million. LAYOFFS LAYOFFS LAYOFFS!! cry cry cry Mayor Cutter. Start with $98,000 Latrice Bryant, and take back all the new flags you hung on the parkway last week and why is it listed on phila.gov job openings for firefighter, police inspector, chief inspector and alot of city jobs?? beside the firefighter.. aren't those police positions 100K each? You should be fired.. if only you could.

Posted 09:02 AM, 11/10/2009

psyrus

Can they perhaps hire someone who can count to avoid these mistakes in the future?

Posted 10:14 AM, 11/10/2009

Ben Dover

cut 4 city row offices, savings $15 million cut city council to 7 members, savings $10 million there is $25 million taxpayers dollars saved right there with no impact on city services. let me see the total $3.8 billion dollar budget and I will find $6 million more to cut, why can't our government do the same thing?

Posted 10:42 AM, 11/10/2009

Big cushy

The Chicken little dance is getting old. Plenty of money for pet projects. Enjoy your only term Mike.

Posted 12:50 PM, 11/10/2009

CleanupPhilly

What specific plans are there to collect the $400 million in overdue property taxes owed the city? What about the $1 billion in forfeit bail owed the city? Does Nutter plan to allow the city to remain in the bail bond business? Is it necessary for the city to put up 90% of bail for every city offender? Why are some properties facing foreclosure on property taxes, but some are not, even if they are not in active payment plans? The policies on collecting long-overdue debt to the city is still muddled. When can we expect the press to start asking specific questions about this money? When does it become an OK topic?