Perhaps it's not polite to interrupt Mayor Nutter and City Council while they pat themselves on the back for the city's new budget, but they're taking the easy way out.
The $4 billion spending plan that Council is set to approve next week calls for too much spending and basically no sacrifice in tough economic times. While the 2009 budget does contain many worthwhile priorities, it adds $10 million in extra spending and eats up two-thirds of the $182 million surplus left by Mayor John Street.
Cuts in spending, meanwhile, are missing. One of the few items that Nutter did trim was the size of his proposed tax cuts for businesses and city workers, a retreat that sends the wrong message in overtaxed Philadelphia.
In February, Nutter told Council that aggressive tax cuts were the key to revitalizing the city. "We must continue the steady reduction of wage and business taxes if we are to retain the business we have, attract new business, and secure the prosperity Philadelphians deserve," he said.
Three months later Nutter changed his tune. Facing a continued economic slump, the mayor decided to curtail the tax cuts by about $4 million in the new budget. Businesses won't save $2 million from the hated gross-receipts tax, as first planned.
The revised tax-cut plan calls for eliminating the gross-receipts tax over 10 years, not eight. The net-income portion of the business tax would be reduced to 6.25 percent by 2013, not to 6 percent.
Nutter now intends to trim the wage tax to 3.6 percent for residents (3.25 percent for nonresidents) by 2013. The initial plan had goals of 3.5 percent and 3.1 percent, respectively.
The mayor and Council can't control a poor economy, which has drained city revenue from the real-estate transfer tax. But there's little evidence that they tried to offset some lost income with meaningful spending cuts. Instead, they raided the surplus and slowed tax cuts. It's easy politics.
When Nutter introduced his budget in February, this Editorial Board applauded his priorities. More money for police, the Community College of Philadelphia, health centers, housing, and Fairmount Park isn't just worthwhile, it's critical. His proposal to lower the city's debt-service payments and shore up its underfunded pension plan through large-scale borrowing is laudable but poses big risks and needs independent scrutiny.
The mayor has also added several high-salary positions without conducting a comprehensive review of where budget cuts could be made. Likewise, Council added to the budget with increased staffing and pay, which seems unnecessary. The budget increase is 2.4 percent.