Mayor Nutter unveils five-year budget plan | Interactive graphic

The city's vital services will remain intact but not without tough cuts and revenue increases, Mayor Michael Nutter announced yesterday when he presented his five-year budget plan to the City Council.

The city faces a $1.4-billion budget deficit owing largely to the global economic crisis manifested in falling business and real-estate tax revenues and losses in the city's pension fund.

Nutter called the city's financial situation this year an "economic hurricane."

The city's budget will protect the most vulnerable citizens, he told the council, and preserve core services.

"I will not lay off a single police officer or a single firefighter," he said.

Recreation, community health centers, public libraries and all services for neglected children will be preserved.

This is a shift from Nutter's previous emergency budget cuts last November, when he announced that 11 library branches and most community pools would be closed. Major cuts to this budget largely focused on efficiencies and changes to the city's own workforce.

Many aspects of the budget have come from public engagement, Nutter said.

The insistence among Philadelphians that core services would not be cut was heard alongside a willingness to consider higher taxes, he added.

Nutter asked the General Assembly to approve increasing the sales tax from 7 percent to 8 percent for the next three years, a move that must be approved by the state.

In a press release Wednesday, the Mayor's office said the tax will generate a projected $340 million in additional revenue.

The cost to the average household earning $25,000 per year will be $81.

Nutter also unveiled plans to raise property taxes in the city for two years, adding that he is concerned about the impact this will have on senior citizens and low-income families.

He said pension and health care costs for city employees have gone from 14 percent of the budget in 2000 to 22 percent in 2008.

He asked employees "to contribute more of their salaries toward their pensions and health care."

Nutter said he plans to apply for official "severely distressed" status through the state for the city's pension fund so that Pennsylvania law will require significant changes to reduce employee costs.

Harris Sokoloff, founder of the Penn Center for Civic Engagement, said Nutter is "listening deeply" to the concerns of the public.

The Center for Civic Engagement conducted workshops last month on behalf of the city to gauge public opinion on the budget.

Particularly notable, Sokoloff said, was when Nutter asked citizens to do their part in improving the city.

"The mayor has done something different, and we need to meet him in the middle," he said.

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