AFTER SEVERAL YEARS of bad budget news, Mayor Nutter is expected to introduce a controversy-free financial plan tomorrow with no major tax hikes or cuts.

It will even include a few new expenditures, like money for a police class, Fire Department overtime and a new literacy program.

But in his budget speech before City Council, Nutter will stress that the city still faces major fiscal problems - due to looming cuts in state and federal money, and the massive budget deficit at the Philadelphia School District.

Which means that Nutter's proposed budget for the 2012 fiscal year, which starts July 1, is likely only a first draft.

"I think the citizens of Philadelphia are smart enough to know . . . that the city budget, the state budget, the federal budget that gets introduced, gets changed through the course of the process," said Nutter yesterday when asked if residents should steel themselves for changes to the budget.

Here are a few highlights from the roughly $4 billion budget, based on conversations with several City Hall sources:

* No new taxes or fees.

* Only $3 million in planned cuts, mostly to prisons, because the inmate population is down.

* Just $35 million in new spending.

* Of that, $6 million will go to the new police class to start this year, after two classes were recently cancelled.

* Another $2.6 million will go to overtime in the Fire Department, $4.37 million will go to the Office of Property Assessment and $2.4 million to the courts to cover lost stimulus dollars.

* After taking a hit for trying to close libraries two years ago, in this budget Nutter pledges $1 million for a literacy program.

* The city would end the budget year with $51 million on hand.

The budget does not adjust funding expectations from the state or federal governments, based on predicted cuts. Gov. Corbett will release his budget on March 8 and is expected to slash funds for the Department of Human Services and city schools.

Councilman Bill Green said the city should have waited until Corbett announced his budget before finishing the financial plan.

"I think it would have made sense to wait three weeks and present a budget that is a true statement of priorities of the administration, given the dollars available to us," Green said.

But Nutter said the city has a timetable to follow and needs to start the process now.

"Ultimately, you never know completely what's going on with those governments," Nutter said. "There is always some amount of information you're not going to have. We have a process, we have to move it along, we have things we need to get done."

Nutter faced a budget crisis nine months into his first term, when revenues plummeted as the national economy crashed.

Since then, the administration has cut more than $2 billion from the city's five-year financial plan, shrinking the workforce, cutting funds for libraries and police officers, and raising two taxes.

Administration officials, who stress that they have mostly avoided layoffs and the gutting of services in the initial crisis, said the city's economy is starting to stabilize.