A giant game of budget chicken is happening at City Hall.

On one side are Mayor Nutter and his budget gurus, who say they stand ready to cut $20 million and 339 jobs, most of them from libraries and the Police and Fire Departments, starting in July.

On the other are some members of City Council and a union leader who think those cuts are unlikely and who say city leaders will find another solution.

On Thursday, Nutter said it was too late for that with the budget deadline looming.

"I don't want to implement these cuts, but at the moment, there is no known additional revenue source to fill the gap," he said.

But Councilman Wilson Goode Jr. said there was still time for Council and the mayor to find new revenue sources.

"I do not believe there is any chance that there are cuts to police and fire and libraries," Goode said.

The City Charter requires the budget to be completed next week, but previous administrations have ignored that deadline (Nutter, however, says he will stick to it), and Goode said Council and the administration could introduce new revenue measures through June.

Even if no new revenue sources are identified, Goode said, he does not believe the cuts are necessary to plug the budget hole.

Last week, Council passed a $3.9 billion budget for fiscal 2011 that closed Nutter's projected $130 million gap by raising property taxes 9.9 percent, establishing a $300 trash-collection fee for commercial properties, and levying a new tax on tobacco products other than cigarettes.

But Council killed a proposed tax on sweet drinks that Nutter had hoped would raise as much as $14 million. Instead, Council told the administration that the city could squeak by with just $42 million in cash reserves. That's $10 million less than Council's consultants recommended as a minimum.

The prospect of running out of cash also worries members of the Pennsylvania Intergovernmental Cooperation Authority, which has oversight over the city's long-term fiscal planning. "In my view, the mayor really had no option but to raise that balance," authority chairman James Eisenhower said.

Rob Dubow, Nutter's finance director, said the low cash reserves meant the city would run out of money in June 2011. The administration told Council that it would have to compensate by cutting $20 million.

The cuts would include:

Eliminating two police-recruit classes in 2010-11 to save $4.5 million, reducing the police force from about 6,600 personnel to 6,400.

Closing two fire companies and cutting 40 positions to save $3.6 million. The companies have not been identified.

Cutting $2.5 million from the Free Library budget, eliminating 35 jobs, and reducing branch schedules from five days to four.

Making cuts in other departments, including a $2.5 million decrease in the proposed budget for city parks, whose revival Nutter had hoped to make a centerpiece of his administration.

The administration plans to offer specifics on those cuts by July 1, the start of the fiscal year.

In a small way, the trimming has started already. Last week, the city imposed what Dubow called a "hard" hiring freeze. That means it will hire only in absolute emergencies. For most of Nutter's administration, the city has had what Dubow called a "soft" freeze, meaning open jobs were carefully reviewed and not always filled.

Dubow said more cuts were all but certain.

"That's not to say there aren't Council members who aren't thinking about things and want to work with us," he said, "but you would have to find $20 million in recurring revenues that we were confident were real."

John McNesby, president of Fraternal Order of Police Lodge 5, said the loss of two police classes would result in 220 to 240 cuts by attrition over the next year.

But he said he didn't believe the mayor, who campaigned on a pledge to reduce crime and who already has achieved some success on that front, would whack the Police Department.

"I don't believe he's going to cut the 200," McNesby said. "He's playing checkers with the public trust."

Nutter said he wanted to add police but wouldn't be able to afford to with the budget Council passed. "If I had the resources, I'd add the [new police] classes," he said.

Councilman Darrell L. Clarke said he did not think the mayor was bluffing.

"I'd tell you to take the mayor at his word if he said he is going to make reductions," Clarke said.

But he, too, holds out hope that Council can identify new revenue sources. He said new taxes were unlikely because he and others on Council found raising the property tax painful. He believes, however, that an improving economy may bring more jobs to the city, boosting revenue.

Michael DiBerardinis, commissioner of the Parks and Recreation Department, and Lauren Bornfriend, executive director of the Philadelphia Parks Alliance, said cuts hit the department especially hard. For years, funding for Philadelphia parks has lagged that of other cities. Discussions in preparing this year's budget sought to close some of that gap.

The cutbacks will leave the city without money for thousands of new trees, Bornfriend said.

Councilman Jim Kenney said this year's budget discussions frustrated him because the public has a poor grasp of the city's fiscal realities. City residents believe, for example, that Philadelphia could solve its budget problems by collecting hundreds of millions in delinquent taxes. Much of that money is owed by dead people or is locked up in complicated estate situations, he said.

"You don't just grab somebody by the ankles and shake the money out of their pockets," Kenney said. "There seemed to be a whole set of contextual issues that skewed the discussion."

Contact staff writer Miriam Hill
at 215-854-5520 or hillmb@phillynews.com.