Mayor Nutter will warn at a town hall meeting tonight that the city’s already dire financial situation is “worse than we described a month ago.”
Citing the recent dismal performance of the city’s pension fund, and startlingly low real estate transfer tax collections, Nutter will say that the city’s five year deficit will be larger than the $1 billion originally estimated.
“On Nov. 6, we said the damage to our Five Year Plan was more than one billion dollars. We’re now expecting a bigger hole, though until we get more numbers at the end of this month, we’re just not in a position to quantify it,” Nutter will say, according to his prepared remarks. “But the trend, sadly, is pretty clear.”
The city will begin drafting a new budget in January, by which time administration officials expect to have a fuller picture of how weak revenues this year are likely to be.
“The warning signs are clearly there, and we wanted to let people know so they weren’t surprised later,” said Finance Director Rob Dubow in a phone interview before the town hall meeting.
The city has collected just $88.6 million in real estate transfer taxes so far this fiscal year, more than $28 million less than last year. The numbers are so anemic that Dubow and Nutter fear the city will not even meet its revised austerity budget figures.
The fall has been just as cruel to the city’s pension fund, which lost 12 percent of its value in October alone. The worse the pension fund performs, the more the city has to pay out of its annual budget to ensure that city retirees get their pension payments.
“We can all hope for a spring surprise, but we must be clear-eyed in our estimates of future economic activity and the resources that it will provide our government,” Nutter's prepared remarks said.