Agostini has already asked department heads to slice their spending by 7.5 percent next year as he prepares to present a 2011 budget to Council in January or February. Agostini would not say how the city would close the deficit, though he said he was monitoring every hire, trying to avoid taking on long-term costs.
Some cuts could come before the budget is passed in June.
This mini-crisis is not as grave as the forecasts at this time last year, when the city had to erase a $108 million deficit in last year's budget.
The branch libraries were never closed after City Council members prevailed in a lawsuit. Some pools were opened this summer.
"We're not as deep in the woods as we were last year," Finance Director Rob Dubow said.
"But we're not out of the woods yet," Armbrister added.
The deficit could deepen, however, if the city does not achieve the $125 million in annual savings it projects from its employees for the next five years, including this budget year, which is more than one-third gone.
That includes the four municipal unions whose contracts are being negotiated, as well as nonunion employees.
First, the good news. Real estate transfer tax revenues - reflecting activity in property sales - are expected to exceed estimates by about $20 million. At $105 million, they would still be far down from the $236 million revenue peak in 2006-07.
Agostini said sales were coming from the high end - where buyers are scooping up luxury properties on the cheap - and the low end, where the $8,000 federal credit for first-time home-buyers is making a difference.
In addition, business taxes for the year ended June 30 came in $20 million higher. Agostini credited that to a stronger-than-expected performance by large local companies.
The city will save an additional $4.7 million in restructured debt service for the football and baseball stadiums.
But the $44.7 million in additional revenues this year is more than countered by nearly $76 million in bad news.
The factors involved are:
Wage-tax revenue is expected to fall by $50 million for each of the next two years.
The state budget provided $5 million less than the Department of Human Services planned for. The city budget also assumed the state budget would include a $10 million state police grant; it did not.
Division of Technology expenditures totaled $5 million just to keep systems functioning.
Costs of $5 million, mostly for police, for two new casinos, particularly SugarHouse Casino, which is to open next year. These costs do not factor into this year's budget woes, but are part of five-year projections. It is the first time the city has budgeted for expenses for the casinos.
Police Department spending is $4 million over budget, mostly for overtime.
A $2 million state check intended for the relocation of Fire Department Engine 38 in Port Richmond was mistakenly deposited in the operating revenue account instead of the capital account, so officials thought they had that $2 million to spend on operations.
Falling prices for recycled materials, along with a falloff in projections for the tonnage collected, reduced revenue estimates by $1.5 million this year. Councilwoman Donna Reed Miller suggested that the falloff could partly be blamed on people collecting recycling material out of bins at the curb as a way to make money.
The city needs an additional $175,000 this year and $350,000 in each of the next two years to fund staff and software costs so that it can track and pursue stimulus funding, Agostini said.
Contact staff writer Jeff Shields at 215-854-4565 or firstname.lastname@example.org.