Butkovitz questions Nutter's 'doomsday' budget

City Controller Alan Butkovitz sought yesterday to poke holes in Mayor Nutter's "doomsday" budget, raising questions about the five-year spending plan two days before the city's financial watchdog is set to vote on it.

Butkovitz refrained from saying whether the budget - known as "Plan C" - should be rejected or approved, but cited several matters of concern in a four-page letter he wrote to the Pennsylvania Intergovernental Cooperation Authority (PICA). Created by the state, the authority is obligated to vote annually on the city's five-year plan and is scheduled to do so in a meeting tomorrow.

Uri Monson, the authority's executive director, said yesterday that PICA had not received the letter. "But at a first glance on the Philly.com Web site," where the letter was posted after Butkovitz issued it, "it lists a few of the many issues we are looking at," he said.

Plan C reduces spending by $700 million to reflect the impasse in the General Assembly on two proposals Nutter wants that would raise that amount of revenue. Specifically, the mayor is seeking a temporary sales tax hike as well as the deferment of payments into the city pension fund.

With the city losing money each day the impasse continues, Nutter developed Plan C as an alternative spending plan.

Butkovitz challenged several key components of the plan, which calls for massive layoffs and service reductions that would take effect starting Oct. 2.

"There is no reason to believe that Philadelphia would be allowed to forgo its funding of the First Judicial District," he wrote of Nutter's budget proposal to save $470 million by closing Philadelphia's court system.

Butkovitz noted that while the state Supreme Court 22 years ago ordered the state to pay court costs, the decision has never been enforced. "The elimination of the Philadelphia court system cannot be done," he wrote.

Among eight inconsistencies and other concerns he cited in the plan, the controller noted that the mayor's budget reflects the layoff of 3,000 employees by reducing fringe-benefit costs, but does not similarly show any savings from a reduced FICA tax and Medicare costs, or workers' compensation and unemployment compensation costs.

He said the budget indicates that some of the cuts would only be temporary, such as the closing of the Commerce Department. It would lose $1.7 million in the current fiscal year but would be fully funded beginning in 2012.

Nutter, meanwhile, continues to express anguish over the inference that Plan C is not a realistic document.

"There are still many details and outstanding concerns that need to be addressed," mayoral spokesman Doug Oliver said. "But what remains clear is the unfortunate and unavoidable fact that, without a budget from Harrisburg and without the sales tax and pension payment adjustment approval from Harrisburg, the city has no money."

He added: "If we don't get our approval for our legislation, there won't be any money to pay the court costs one way or the other. You can't get blood from a stone."