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Friday, February 10, 2012



In crisis, Nutter cuts creatively to balance budget

In print | Published February 19, 2009

When Philadelphia elected Michael Nutter to the post of mayor in November of 2007, the city’s two most pressing issues were crime and corruption. The most vocal disagreement between the candidates during the election, however, was whether or not the city should charge rent on a government building in use by the Boy Scouts of America. The election had one of the lowest voter turnouts in the city’s history, and Nutter, a Democrat, easily won the primary and general elections.

STAFF EDITORIAL

The next election, no doubt, will be better contested. The economic crisis has hit Philadelphia hard, forcing once prominent issues like crime and corruption into the background. Moreover, the present financial turmoil has made a seemingly invincible mayor struggle to maintain the city’s support.

The strains on Mayor Nutter’s government are extensive. According to the Pennsylvania Intergovernmental Cooperation Authority’s “Philadelphia Tax Revenue Update,” Philadelphia’s wage tax, transfer tax and sales tax revenues are all lower than was projected, and business privilege taxes (BPT) and real estate taxes together will garner the city $60 million less than was expected. These and other shortcomings have forced major budget cuts to help allay the loss of revenue. Even so, experts predict a budget shortfall of over $170 million for the 2010 fiscal year.

But Nutter is bound by law to keep the city’s budget balanced. In an interview with NBC in early November, Nutter declared that at least $100 million had to be cut from city spending. His plan called for the closing of the vast majority of the city’s public pools and eleven public libraries, an end to snow removal (barring snowfalls of greater than 12 inches) and a freeze on the city’s planned tax reductions.

And the economic climate has only worsened since November, however, and the city maintains plans to further reduce the budget. Talk of closing 11 public libraries in November has evolved into talk of closing 23; talk of decreasing department budgets by 10 percent has evolved into talk of decreasing them by 30 percent. None of this has been easy for Mayor Nutter, who was recently told by a judge that he couldn’t close certain municipal buildings (such as the libraries) without first getting city council support.

This ruling, as well as recent dissent within the city council, has forced Nutter to take a step back and reevaluate his initial, somewhat high-handed, approach to balancing the budget. He has convened a number of public discussions in Philadelphia and plans on assembling several more in which “normal” Philadelphians are given figures about the budget shortfall and information about the proposed spending cuts and possible tax increases. They are asked to split into groups to draw up their own plans where they discuss how many police officers ought to be cut, how many libraries and swimming pools and skating rinks ought to be closed, and how much, if at all, taxes need to be increased.

These public workshops are the perfect forum for discussing budget issues with Philadelphians. While it is unlikely that many poorer Philadelphians, who rely on city services more, will be attending these discussions, these public workshops are an astute political move on the part of Nutter.
A recent Pew Poll taken in Philadelphia found that Nutter’s approval rating remained above 70 percent, but that less than 30 percent of the city approved of his plans to cut city services. Nutter thus remains a popular man, but it is imperative that he does a better job of convincing the people that his budget cuts are necessary.

It is natural that Philadelphians are opposed to seeing many of their city’s services withdrawn. And certainly we should question the prudence of the law mandating that Philadelphia’s budget remain balanced. Nutter himself, however, has done an excellent job of discovering ways to maintain city services without relying on increased public expenditure.

On Feb. 5, the mayor announced the creation of the Splash and Summer Fund, an initiative designed to rescue the city’s public pools. According to Nutter’s original plan, 63 of the city’s 73 public pools were scheduled to remain closed this summer. The Splash and Summer Fund, Nutter hopes, will raise $1.2 million from local businesses, individuals, and charities in an effort to keep 30 of the 73 pools open six days a week.

This initiative is one in a long line of public-private initiatives that have been proposed by the Mayor. In November, Nutter asked Ed Snider, the chairman of Comcast-Spectator, a self described “Sports and Entertainment Firm,” to take over the three ice rinks that the city can no longer afford to operate. And five of the eleven libraries that Nutter originally proposed shutting down, will, with the city council’s approval, be kept open by individuals, charities, and corporations.

Other services, however, will not. Philadelphians realize that the scale of the economic crises means that tax cuts will have to be delayed, that taxes will have to be raised, and that services will have to be cut. According to the Philadelphia Inquirer, for example, the recent shooting of a Philadelphia police officer raised “questions about how the administration can consider layoffs to reduce the police budget.” And there have been frequent complaints that a city famou for its libraries is having to close so many.

It is important, however, that Philadelphians realize how extensive the scale of the cuts will be, and how judiciously Nutter has chosen which sections of the budget to cut. For example, the mayor has done an admirable job of protecting the city’s education budget from being downsized too severely.
It is a testament to the city of Philadelphia that the same Pew Poll that had 81 percent of Philadelphians describing the city’s current financial situation as “not very good” or “bad”, had a plurality saying the city is headed in the right direction, and a majority saying that Philadelphia is a “good” or “excellent” place to live.

The spending cuts are painful, but we are confident that as long as the city continues looking for creative solutions to the crises, Philadelphia will remain a “good” or “excellent” place to live for a long while yet.


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