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No major cuts, tax hikes in Nutter's budget plan

For the first time in three years, Mayor Nutter yesterday delivered a budget message to City Council without asking for major tax hikes or spending reductions, but the feat required the mayor to turn a near-blind eye to the near-certainty of major cuts in state and federal aid.

Philadelphia Mayor Michael Nutter greets City Council President Anna Verna as he enters city council chambers to deliver his fiscal year 2012 budget address. Verna will be retiring at the end of her term. ( Clem Murray / Staff Photographer ) EDITOR'S NOTE: SE1Budget04-e 3/3/2011 Mayor Nutter will deliver his Fiscal 2012 budget. Funding for a new class of 120 police cadets and new dollars to update city property assessments are among the highlights of a $3.45 billion budget to be unveiled Thursday morning by Mayor Nutter. He will lay out a spending plan that prepares Philadelphia for better economic times ahead - but those times are about to get much worse with Gov. Corbett's budget next week expected to make deep gashes into the city's social services and education systems. 5 of 7
Philadelphia Mayor Michael Nutter greets City Council President Anna Verna as he enters city council chambers to deliver his fiscal year 2012 budget address. Verna will be retiring at the end of her term. ( Clem Murray / Staff Photographer ) EDITOR'S NOTE: SE1Budget04-e 3/3/2011 Mayor Nutter will deliver his Fiscal 2012 budget. Funding for a new class of 120 police cadets and new dollars to update city property assessments are among the highlights of a $3.45 billion budget to be unveiled Thursday morning by Mayor Nutter. He will lay out a spending plan that prepares Philadelphia for better economic times ahead - but those times are about to get much worse with Gov. Corbett's budget next week expected to make deep gashes into the city's social services and education systems. 5 of 7Read moreClem Murray / Staff Photographer
    by By BOB WARNER & CATHERINE LUCEY, <a href="mailto:warnerb@phillynews.com">warnerb@phillynews.com</a> 215-854-5885
    Published 

For the first time in three years, Mayor Nutter yesterday delivered a budget message to City Council without asking for major tax hikes or spending reductions, but the feat required the mayor to turn a near-blind eye to the near-certainty of major cuts in state and federal aid.

Nutter's proposed $3.45 billion spending plan assumes essentially the same levels of state and federal support that the city is getting this fiscal year.

But as Gov. Corbett struggles to fill a preliminary $4 billion gap in the state budget and as Republican congressmen continue to wrangle with the Obama administration over cuts in this year's federal budget, no serious analysts are predicting anything so rosy.

Nutter acknowledged the looming state- and federal-aid problems - along with a projected $400 million deficit at the Philadelphia School District - on page 8 of an 11-page speech to Council.

"While we don't know the exact details yet, we do know that cuts [in the state and federal budgets] will have to be made," the mayor said. "And . . . we know that these cuts - if not made carefully and strategically - will have a devastating impact on Philadelphia."

He said he intended to fight for the budget he was introducing and called on citizens to join him.

Council members said they expect the administration to adjust its budget proposal after Corbett unveils his budget plan next week.

"Everybody knows there are going to have to be adjustments," said Council's Republican leader, Brian O'Neill. "I'm hoping we don't hold hearings with department heads . . . unless they're bringing in amendments we can discuss."

Nutter proposed an extremely short list of new spending items - labeled "new investments."

It includes $6.4 million for a class of 120 police cadets, offsetting a net decline of officers since Nutter took office three years ago. And it provides $4.4 million for the Office of Property Assessment to boost its assessor force from 50 to 130 and complete a market-value reassessment of all the city's real estate.

Nutter's budget assumes he can wrestle savings from contract negotiations with the city's nonuniformed workers in the American Federation of State, County and Municipal Employees, District Councils 33 and 47. Nutter pledged to win pension and health-care cost reforms from the two unions, which have been working under expired contracts since July 2009.

But District Council 33 President Pete Matthews said the union was not prepared to give and complained that the union and city have had informal talks but no real negotiations.

"I have said flatly, no concessions," Matthews said.

The city plans to spend slightly more than this year's $3.8 billion budget, but the total looks like less because of an accounting change that moves $500 million in revenue for the Department of Human Services out of the general-fund budget. The move is aimed at helping the city avoid problems when those DHS payments are delayed.

Staff writer Chris Brennan contributed to this report.