New budget cuts loom in Philadelphia

PHILADELPHIA - September 28, 2011

City Hall is now weighing a new round of budget cuts just three months after a spending plan was approved.

This is the result of shortfalls in revenue projections this summer which stem from the slowdown in the national recovery as the possibility of a double dip recession looms.

Sources say program and service cuts will be across the board, somewhere in the 5% range.

Police and fire will be excluded, but Mayor Michael Nutter has asked other department heads to prepare a list of cost saving measures.

In a letter to the city controller and city council, Mayor Nutter says tax revenues including wage and sales taxes are showing weakness in the last few month.

Wage tax revenue which was growing at 3% at this time last year is now coming in more than $5-million below monthly budgeted figures or 1.2%.

Sales tax is also lower than projected, down more than 6% from last summer's take.

If these trends continue, the mayor says, "the fiscal 2012 budget could be over 60-million short."

The mayor adds the plunging stock market has hurt the city's pension fund, saying "the city may have to increase contributions to the pension fund to offset those losses" to the tune of tens of millions.

The mayor's top aides tells Action News delaying payments to city vendors is not an option, only program cuts, further hiring freezes, and other halts in spending.

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