Since February, City Council has held 65 hearings on Mayor Nutter's proposed budget. The hearings were the public side of the process. Now, the private side has begun. Mayor Nutter and City Council are engaged in intense negotiations around the city budget.
The budget hearings were held at fixed times and open to the public. The high level meetings between City Council and the Mayor are not. Elected officials will decide how to spend nearly $4 billion worth of tax dollars and other revenue. We can get a sense of what the priorities are going to be from Nutter's proposal and the hearings. However, we won't really know what happens behind close doors until the budget is approved by City Council. Even then, we'll only have part of the story.
Frankly, this portion of the budget process highlights the importance of the press. These discussions are shielded. Journalists have been aggressive about finding out information and bringing it to the public. A group of City Hall reporters even crashed a closed budget briefing that seems to have violated the Sunshine Act. It would be almost impossible to follow this without the budget process without the media.
So, how are things going? Nutter seems to be wrestling with the challenges of governing. Several factors have forced him to scale back his budget proposal. Instead of offering a little something for everyone, Nutter will have to make tough choices about his spending priorities.
Much of this is beyond Nutter's control. The trouble in the national economy has clearly impacted Philadelphia. For example, taxes collected from the sales of real estate are down. That means there is less revenue to spend on everything-- tax cuts, health centers, recycling, and all the other proposals offered by Nutter's budget.
Nutter is also grappling with helping fill the $38.9 million deficit facing the Philadelphia School District. The state and city will need to contribute money to fill the shortfall. The deficit, which is much smaller than last year, is another expense that takes away from Nutter's priorities.
The debate about taxes continues. Nutter has always been a proponent of tax cuts for business. The problems with revenues is prompting a discussion about altering the size and scope of cuts. At the same time, some Council members are arguing for the restoration of wage tax cuts for the working poor.
Another factor is upcoming contract negotiations with city unions. The exact cost of salaries and benefits for city employees for the next four years is unknown. Nutter has budged $402.9 million for contracts, but that number is likely to change as a result of negotiations.
In coming days, City Council and the Mayor will be required to make tough choices about budget priorities. Without a doubt, problems in the national economy and shortfalls in the School District budget highlight how outside forces can impact the budget process.