Obstacles surround Nutter as he proposes budget

Councilman Dennis O'Brien (second from right) talks with fired-up union leader Henry Nicholas.
Councilman Dennis O'Brien (second from right) talks with fired-up union leader Henry Nicholas.
Posted: March 15, 2013

YOU HAVE to imagine that Mayor Nutter would rather be anywhere else in the world Thursday than on the fourth floor of City Hall delivering his sixth budget address.

The seats in front of him will be filled with Council members who have steadily picked apart or slowed his agenda for years. The balcony above him will be packed with throngs of angry union protesters who say they are planning a real doozy for this year's address.

And the typed words on his podium will be a snapshot of all the things he wants to accomplish with his last three years as mayor - surrounded by so many reminders of why he's struggling to get many of them done.

Sources said Nutter's proposal will be for a $3.75 billion budget with the following features:

* A property-tax rate of 1.32 percent under the new Actual Value Initiative.

* Reducing the property-assessment deduction from $30,000 to $15,000 for people who own the homes they live in.

* Additional AVI-related tax relief for low-income residents of gentrified areas and owners of mixed-use properties.

* Reinstated wage-tax cuts that were delayed during the recession.

* No major cuts for any city departments.

* No new sources of revenue for the school district.

* Increased funding for the Community College of Philadelphia, libraries, Licenses & Inspections, the Office of Property Assessment and other agencies.

After Nutter proposes his budget, it's up to Council to dissect it, make amendments and approve its version by June 30.

The heavy lifting of this budget season is expected to come not on the spending side - where in recent years the city has had to make huge cuts - but on the taxing side. The mayor and Council must find some accord on AVI - which could increase taxes for most Philly residents - and debate whether now is the time to bring back the wage-tax reductions.

Overall, Nutter's budget is expected to go over more smoothly than past proposals and doesn't seem to contain any poison pills like those that thwarted some of his previous priorities in Council - a property-tax increase he wanted in 2009, the soda-tax debacles in 2010 and 2011 and his first attempt at AVI last year.

"Not since '08 have we been in a position where we can even breathe, where we're not proposing major cuts," Councilman Curtis Jones Jr. said. "We need to do it fairly for the people who have sacrificed . . . but we can't go on a drunken spending spree."

But there could be a pitfall from this year's budgetary fortune: In the eyes of labor, Nutter's ability to both cut taxes and increase spending damns his argument that the city can't afford to meet the demands of the municipal workers and firefighters unions, which have been working without contracts since 2009.

Nutter contends that the unions' pension and health-care costs are a long-term threat to the city's financial health and eat up a larger part of the budget each year.

More than usual, labor's opinion matters this year as the 2015 mayor's race is beginning to take shape and seems likely to include key Council members who won't want to cross the unions.

Union protesters on Wednesday kicked off what is becoming a tradition - anti-Nutter demonstrations to start budget season - with a City Hall rally featuring three inflatable animals, crude signs and speeches from nearly every notable union leader in Philly.

Henry Nicholas, national president of a health-care workers union, said Council chambers could be so packed with protesters Thursday that the mayor won't be able to give his speech.

"I don't know whether there's going to be a budget message tomorrow because we might not let him the f--- in," Nicholas said Wednesday.

He also fired a warning shot to Council members, several of whom were at the rally, in the context of Nutter's attempt to impose contract terms on the city's largest union, District Council 33.

"Everybody is on the watch list because they've been too quiet," he said. "They must tell [Nutter] to stand down and do the right thing, and if they don't do that, we're coming after all of them."

- Staff writer Jan Ransom contributed to this report


On Twitter: @SeanWalshDN

Blog: PhillyClout.com

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