Nutter asks city departments to draft plans for 2 percent cut

Faced with anemic tax receipts at the outset of the city's budget year, Mayor Nutter has asked city managers to draft plans for a provisional 2 percent budget cut, in case the city's weak revenue continues.

"At this point we haven't made any decisions," the mayor said Monday in a brief interview with reporters from KYW and WHYY. "But we do want to know, if we're starting to see some weakness in terms of the economy, in terms of tax revenues, what kind of things we might . . . potentially have to do down the line."

The city's police, fire, and corrections departments have not been asked to project any budget reductions. "We are not touching our public-safety services," Nutter said.

The city's current general-fund budget is based on a projection that overall revenue will grow $62 million - about 2.2 percent - in the fiscal year ending June 30.

But actual tax receipts in July and August went the other direction, falling $25 million compared with the same months in 2010.

Whether the two-month numbers mark a trend or an anomaly is uncertain. And year-to-year comparisons can be misleading.

Last year's wage-tax revenue was buoyed by collections from a tax-amnesty program, for instance, and collections from real estate transfer taxes last year were helped by the federal tax credit for first-time home buyers, since expired.

"Full collections data for the first quarter of FY 2012 (July through September 2011) will provide a more reliable indicator of city tax revenue trends," the Pennsylvania Intergovernmental Cooperation Authority (PICA), the state's finance oversight board, said in a recent report.

"We'll have some September numbers shortly and that will tell us what happened in the first quarter of the new fiscal year," Nutter said Monday. "We're clearly seeing a little bit of weakness, and we just want to stay on top of it."