City Council Passes FY2010 Budget, Harrisburg Approval Needed

City Council just passed the $3.8 billion* fiscal year 2010 city budget, designed to close a $1.4 billion gap in the five-year financial plan.  Mayor Nutter is expected to quickly sign into law the spending plan, which goes into effect on July 1.  But one major step is still needed.  The state General Assembly must approve provisions in the city budget to increase the sales tax by 1 cent for five years and to stretch contributions to the city's pension fund to 30 years instead of 20 years.

If Harrisburg doesn't come through, the city will instead implement an alternate budget with wide-spread cuts, including police lay-offs, the elimination of some fire equipment and reduction in trash pick-up.

Nutter and Council struck the budget deal last week when he abandoned his call for a controversial two-year increase in property taxes that did not require approval from Harrisburg.

The state's budget deadline is the end of June and negotiations often drag into July. So it could be a while before the city knows whether this budget will hold. And some Harrisburg lawmakers have made clear that they have concerns about the city’s plans.

State Rep. Brendan Boyle, whose district covers parts of the far Northeast, this week said he does not plan to vote for a hike in the sales tax. “I think it would be very unfair to the Northeast,” he said, noting that merchants in his district compete with nearby businesses in Bucks and Montgomery counties, where the sales tax is currently six cents on the dollar. “I’ve heard from local business owners.”

Boyle said he might feel differently if the sales tax in the surrounding counties increased also.

* Corrected -- the first version of this post said million