So what will this year's budget look like? What will it mean for your wallet? And how can you participate? Here's a look at this year's budget process:
What's the damage?
The city faces a deficit of $125 million to $150 million in the 2011 fiscal year. Over five years, that number will grow to $500 million to $700 million. That gap is due to lower than expected tax revenues along with unexpected costs, like snow removal.
This cash problem comes after 18 months of fiscal decline and two massive rounds of cuts. Starting in fall 2008, the city slashed $2.4 billion from the city's five-year financial plan.
Money was cut from pools, libraries and the Fire Department. Tax reductions were delayed and the mayor won Harrisburg approval last year for a temporary five-year increase of the sales tax and a deferment of payments into the pension plan.
Taxes and fees
So is this year's budget going to cost you more?
The good news is that the city is not expected to raise any of the major taxes in this budget. It already temporarily raised the sales tax, the property tax is off the table and the mayor has staked his career on lowering wage and business taxes.
But several items that could hit your wallet have been under consideration in private budget talks. A trash collection fee has been weighed and the administration has also floated the idea of a tax on soft drinks.
Council members said they were concerned about how additional fees may impact residents, but some recognized that there aren't a lot of options.
"The size of the deficit is going to call for some increase in revenue. I don't see how you cut that much," said Councilman Darrell Clarke.
Nutter wouldn't say if there are new taxes of fees in the budget. Asked about the merits of a soda tax, he said such a fee could have both financial and health benefits for the city.
"Certainly there would be significant dollars potentially, if we were to have such a proposal, but our focus is on the public health," Nutter said.
The fate of libraries, recreation centers and fire houses is another key concern for residents. Citizens responded with outrage in late 2008 when Nutter announced a plan to close 11 libraries and shutter some fire equipment to help close a budget gap. Ultimately the libraries were kept open, although for fewer hours. Nutter spoke last week about preserving services that citizens value. Does this mean he's hoping to keep cuts to a minimum?
"Last year we reduced the number of services to save money and the public has been very, very clear over the past year or so about the city government trying to preserve as many services as possible," Nutter said.
Councilman Curtis Jones said he hopes the service changes will be limited.
"I think the people have been the best sports of all of this. They've endured in their own personal lives, cutbacks," Jones said. "The last choice is to balance the budget on the backs of service to the people."
During his budget address last year, Mayor Nutter called on on union leaders to encourage their members to take furlough days to help balance the books - a request that fell on deaf ears.
Will Nutter make a similar plea to the city's roughly 20,000 union-represented workers this year?
Thus far things are not progressing with unions the way Nutter hoped. Of the four municipal unions, only the police officers have a new contract, reached through arbitration. And Nutter did not get the cost savings he expected from the police deal.
As the other three contracts hang out there, it isn't clear if Nutter will again try to throw down the gauntlet and push for concessions. Union leaders last week said they were concerned.
"I'm sure he's going to do his usual sky-is-falling speech," said Bill Gault, president of the firefighters union. "The Fire Department has already given the most cuts."
Getting the budget passed is always a political process.
You might recall that budget negotiations between Nutter and City Council turned sour last year after Nutter criticized Council's city-issued cars and participation in the DROP retirement program. Council bristled and also took umbrage with Nutter's plan to balance the budget through a temporary property tax hike. They negotiated a plan that killed the property tax idea.
Will things be sweeter this year?
"I think we've learned a valuable lesson," said Jones.
"We're going to be sober adults in Council and we're going to look at what we need and not just what you want."
So how does this all work?
Nutter is to deliver his budget address on Thursday to Council. Then the budget goes to Council for weeks of hearings into each department and proposal. Days will be set aside for citizen testimony and some meetings are expected to be held after hours or on weekends in the neighborhoods, to encourage community participation. Nutter and Council must agree on budget terms and a majority of Council - nine of the 17 members - must approve it.