- The Washington Times - Thursday, November 6, 2008

PHILADELPHIA (AP) - Philadelphia will close libraries and swimming pools, suspend planned tax reductions, cut more than 800 jobs and trim salaries for some administrators in order to weather “an economic storm” that could leave the city with a $1 billion shortfall, Mayor Michael Nutter said Thursday.

Nutter outlined the drastic budget cuts in a live, 10-minute televised address — a rarity that represented an attempt to convey the dire nature of the city’s financial situation.

“The economic storm has arrived with such force that a respected economist said it was as if the national economy had ‘fallen off a cliff,’” Nutter said. “Painful program and service cuts are necessary.”

The city is facing a deficit of $108 million this year, and the shortfall could grow to more than $1 billion by 2013, Nutter said.

The fiscal problems stem from the same troubles overwhelming the national and global economies, he said. Revenues from business and real estate taxes are down and the city’s pension fund has underperformed, forcing officials to stabilize it with other money from the $4 billion municipal budget.

“This is a fiscal challenge of unprecedented size, scale and suddenness,” Nutter said later at an afternoon news conference.

He said that the city’s health centers and recreation facilities will remain open, and that after-school programs will be preserved. However, three ice rinks will be closed this winter unless private funding can be found, and 68 out of 81 pools will be empty this summer, Nutter said. Eleven libraries will close, and three others will lose their Sunday hours.

Snowplowing and street resurfacing will be reduced; residential street cleaning will be eliminated.

The job cuts include 220 layoffs and the elimination of 600 open positions.

The city has about 23,000 employees, according to the Pennsylvania Intergovernmental Cooperation Authority, a state agency that helps oversee Philadelphia’s budgets.

Nutter said that no firefighters or police officers will be laid off, but that 200 police vacancies will go unfilled and some fire equipment will be taken out of service.

Nutter also is calling for about 500 employees to be put on five-day unpaid furloughs in 2009 and 2010.

Cabinet-level officials and some senior administrators will face salary cuts of 3.75 percent to 5 percent. Nutter said he will cut his own $186,040 salary by 10 percent starting Jan. 1.

Other major cities including New York, Los Angeles and Chicago are facing similar issues, Nutter said.

Some of the changes, such as the furloughs, can be imposed without legislative approval, but other aspects will be sent to the City Council. Legislation already was introduced Thursday morning to raise some city fees and suspend reductions in the city wage and business taxes through 2015.

Councilman Frank DiCicco said he understands the gravity of the situation.

“I’m a realist. There is no money,” DiCicco said.

This is the city’s most severe budget crisis since 1991, when major cash-flow problems and a low credit rating led the state to create the intergovernmental cooperation authority.

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