Nutter says city’s financial picture getting worse

Mayor Nutter warned at a town hall meeting tonight that the city's already dire financial situation is continuing to deteriorate.

"Unfortunately, I have to tell you here tonight that things have gotten worse" since last month, when he discussed Philadelphia's financial woes in a live television address.

Citing the recent dismal performance of the city's pension fund, and startlingly low real estate transfer tax collections, Nutter said that the city's five-year deficit would be larger than the $1 billion estimate he made on Nov 6.

Just how much larger won't likely become clear until January, Nutter said, when the administration will be better positioned to quantify it.

The city will begin drafting a new budget at that time, and 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.

Nutter also said the city's fiscal shape could worsen as the state's financial woes do; the state may cut city funds.

"We cannot predict the future, we know what we have in front of us," he said.

News of the still widening budget hole did not quiet the criticism of many angry Northeast area residents who attended tonight's town hall meeting at the John M. Perzel Community Center.

In a sometime-angry atmosphere, dozens of audience members held up green neon signs saying "Fire Dept. cutbacks kill."

Many of the questions and criticisms were akin to those asked at previous meetings.

Ten-year-old Tim McHale pointed to the Holmesburg library that is slated to close, and asked: "How will the bookmobile replace the library if it only comes once a week?"

Nutter conceded, "It's fair to say we haven't figured that out yet."

Many last night also expressed support for Nutter's predicament, with one woman offering to pay her 2010 taxes now.

It was the fourth, and largest yet, by far, of eight such meetings Nutter is holding citywide.

One woman who spoke asked a question about the city's funding of parade services. She identified herself as the president of the Philadelphia Optimists Club, to which Nutter quipped: "I need a little bit of that."