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Nutter: Budget crisis; many service cuts permanent

The Inquirer staff reports:

Mayor Nutter today outlined hundreds of millions in budget cuts to close a $1 billion budget gap, and said many of the service cuts will remain in place even after the current economic downturn ends.

Almost immediately after he finished a speech and a press conference, city fire fighters announced a demonstration to protest cuts in their department.

The budget reductions, forced by the collapse of the stock market, drastically reduced tax revenue and a frozen capital market, will mean 220 layoffs, closing of 11 library branches, mothballing five engine and two ladder trucks and closing most city pools.
"I cannot over emphasize how serous things are that we would get to this point," Nutter said.

The city faces the $1 billion budget gap over the next five years.

"It is personally painful to have to make the ultimate decision to lay people off," he said. Many of the 220 will be library and recreation employees. Another 1,600 seasonal jobs will be eliminated, and 570 "contractual" jobs will be ended.

Five of the layoffs will be in the mayor's office, and "some" staff will see salaries cut by 3.75 to 5 percent.

No police officers or firefighters will be laid-off. But overtime will be reduced, and Nutter announced a host of other cost saving measures.

The business and wage tax reductions scheduled will be suspended until 2015, to save some $220 million. Wage tax cuts funded by casino revenue will continue.

To save additional funds, Nutter said all non-union employees "earning more than $50,000 will be required to take a five day furlough without pay" this year and next.

The library cuts were made in consultation with Free Library staff. Nutter said.

"I grew up in the Cobbs Creek branch library….I know the importance," Nutter said
"One of the happiest days in my daughter Olivia's life was when I took her to the Central branch to get her library card"

Many of the cuts Nutter announced "will be permanent" the mayor said. "I have no expectation that we will open the 11 libraries."

Although the $1 billion gap is less than 6 percent of the city's projected spending over the next five fiscal years, the structure of the city's budget sharply limits where Nutter can cut.

More than half of city spending is essentially non discretionary, going toward big-ticket items such as pension payments, debt service, and federally matched social services.

In effect, that forces virtually all the budget pain onto less than half the city government.
The cuts, however unavoidable they might be, seem likely to make it hard for Nutter to achieve some of the big goals he established for his administration when he took office in January, such as halving the dropout rate, doubling the college-degree attainment rate, and changing the tax structure to encourage job creation.

Nutter's team has also had precious little time - just two months - to draw up a completely new spending plan, all while fielding savings suggestions from Council members, union leaders, and other elected officials. Yesterday, City Controller Alan Butkovitz proposed selling the city health center at Broad and Lombard Streets for $6 million. Nutter said that won't save any money, because it would cost $7 million to move the offices elsewhere.

The instant response from the firefighters union - there will be a demonstration today at Engine 6 at 2600 Aramingo Ave. - may be an indication of other fights to come.

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