Nutter's budget likely to spark debates on schools, PGW

Posted: March 07, 2014

PHILADELPHIA Mayor Nutter plans to present to City Council on Thursday a modest budget without bold spending ideas, but one that nonetheless sets the stage for coming debates over selling the Philadelphia Gas Works and funding the School District.

On Wednesday, School Superintendent William R. Hite Jr. sent a letter to Nutter requesting $75 million next year to boost a district still running deficits despite making painful cuts.

That would be on top of the $120 million the district hopes to receive from the city's extra 1 percent sales tax.

Nutter's budget, however, does not include more money for the schools, according to sources briefed on his spending plan, and how much money the district can expect from the sales tax remains in doubt.

The extra 1 percent sales tax was enacted during the recession and was set to expire July 1. Last year, the state gave the city permission to extend the tax, with the bulk of the money collected - $120 million - devoted to the schools.

But Council President Darrell L. Clarke said he would rather split the sales-tax revenue between the schools and the city pension system, which is underfunded by more than $5 billion.

Nutter, meanwhile, has pitched the sale of PGW as a way to help solve the pension crisis. This week, when he announced a nearly $1.9 billion offer for the gas utility, he said profit from the sale would make the pension system 80 percent funded by the latter part of the next decade.

Clarke, who has expressed skepticism about the sale, said he doubted unloading PGW would fix the pension system.

"Even if we put in all of the proceeds, we'd still have to have additional revenue," he said. "It's not like this can be in lieu of the sales tax."

Nutter's budget also includes money to cover 2.5 percent raises for police and firefighters, whose contracts will be decided in arbitration this year, and to fund the administration's last offer to AFSCME District Council 33. The city's blue-collar workers have been working without a new contract for five years.

Several Council members questioned whether enough money had been set aside.

"I don't think there has been enough financial commitment for the D.C. 33 contract," said Councilman Bobby Henon. "I think it's light and underfunded."

Members of D.C. 33 plan to join with Gas Workers Local 686 at a rally Thursday morning outside City Hall. The gas workers oppose the sale of PGW, fearing it will lead to layoffs.

The budget otherwise has a modest $18 million in new spending, although funding for capital projects would reach its highest level in more than a decade.

Among other items, the budget calls for funding to extend libraries' hours to six days a week, and to improve recreation centers and commercial corridors.

"I think it's a cautious budget," said Councilwoman Maria Quiñones Sánchez. "The budget is a fair budget in light of all the big-ticket items that have to be paid for this year."

Notably, the administration also has included $2 million for the Department of Licenses and Inspections to hire more demolition inspectors.

That is in light of the June building collapse on Market Street that killed six people in an adjacent Salvation Army thrift store.

L&I, the city agency tasked with ensuring safety at demolition sites, came under withering scrutiny in the aftermath, and Council held special hearings through the summer.

Henon, who sat on the committee that investigated the collapse, said the $2 million would bring the total number of demolition and construction inspectors to about 60.

"We need to have at least 100," he said. "So I think we fall short of what Philadelphia deserves."

215-854-2730 @troyjgraham

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