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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