The city's budget situation for the fiscal year starting next week is shaping up to be schizophrenic - with a best-case scenario, a doomsday alternative and a big question mark about Harrisburg.
Mayor Nutter and City Council hope that the state General Assembly approves measures to pay for the best-case scenario. They need the state to sign off on a plan that raises the sales tax by 1 cent on the dollar, that defers contributions to the city's pension fund for two years and that stretches out payments to that fund for 30 years instead of 20.
Without that approval, the city will use an alternative budget that still has not been detailed but is expected to rely on police layoffs, the elimination of Fire Department equipment and a reduction in trash collection.
The General Assembly is now hashing out its own budget with Gov. Rendell, who proposes a three-year, 16 percent increase in the state personal-income tax. The state budget typically does not wrap up by its June 30 deadline, but could stretch out for weeks or even months now due to the unpopular tax-increase idea.
There is even talk of a "stopgap" budget in Harrisburg to keep state offices funded while the General Assembly reaches agreement on a full budget.
That prompts a new question: If the state doesn't approve or veto the city's budget measures soon, would that force the doomsday plan to go into action?
"I just don't know," said Uri Monson, executive director of the Pennsylvania Intergovernmental Cooperation Authority, which oversees the city budget. "There's so many new things here that I'm hesitant to guess what might happen."
Monson said that he recently came up with 10 budget scenarios for the city, based upon what he called an "unprecedented situation" of uncertainty with state and city finances. The city delivered its best-case budget yesterday and is expected to deliver details of the doomsday plan in the next couple of weeks.
As part of the doomsday plan, every city department is developing a priority list of programs to determine what would be cut first, Finance Director Rob Dubow said.
"If we have to go to a contingency plan, we'd have to shrink the size of the workforce," Dubow said.
Mixed into the uncertainty is growing unrest with the city's four municipal unions as their contracts expire next week.
District Council 33, the largest municipal union, met yesterday with city negotiators for the first time since April. DC33 leader Pete Matthews later said that his union will "absolutely not" agree to concessions sought by the city.
The city's opening offers to the nonuniformed workers included a four-year wage freeze, major concessions in pension contributions and work rules, and restructuring of health-benefit plans.
Nutter has said that such changes to employee contracts are necessary due to the city's dire fiscal situation. The city's proposed budget, which closes a $1.4 billion gap in the five-year financial plan, eliminated money set aside for raises and is counting on getting $125 million in contract savings over the next five years. *