Reporting Mike Dunn
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By Mike Dunn
PHILADELPHIA (CBS) — The chambers of Philadelphia City Council were packed to the rafters with angry union members this morning as mayor Michael Nutter tried to unveil his new budget.
To a chorus of boos, catcalls, and whistling, the mayor waited in vain for quiet, then tried to deliver his speech while the cacophony continued.
Failing to restore order in the room, Council president Darrell Clarke called for a recess, even as Nutter continued to shout his budget speech into a microphone. As councilmembers left their seats in the hall, the mayor at first tried to continue his address but eventually gave up and was escorted out of the hall by colleagues.
WATCH: Mayor Nutter drowned out as he attempts to give his annual budget address.
A short time later, word came that City Council had recessed for the remainder of the day and Nutter would deliver his budget address a short while later in the mayor’s City Hall reception room.
The mayor resumed his speech about an hour later, in the reception room, before a carefully screened group of visitors.
Speaking to reporters after Council recessed, Council President Clarke said he intends to get involved directly in the contract talks between the administration and the unions.
“I think that as a responsible elected official in this capacity, to continue to have what I believe to be a very, very resolvable situation before us, that I have to get engaged,” he said.
The Budget Details:
At a briefing for reporters a couple of hours earlier, city officials disclosed that the mayor’s $3.7-billion spending plan includes no cuts to city services and a resumption of reductions, albeit small, in the much-hated city wage tax.
But it is the new property tax system that was expected to draw the most attention, as this is the first budget based on new and controversial “Actual Value Initiative” property assessments mailed out last month (see related story).
Nutter is calling for a property tax rate of 1.32 percent, as well as three forms of buffers: a $15,000 homestead exemption for long-term residential owners; $20 million worth of other relief for homeowners in gentrified neighborhoods; and $10 million in grants for owners of mixed-used properties.
But because the relief measures are yet to be locked in, the combination of a 1.32% tax rate and relief measures is likely to change after deliberations with councilmembers over the next few months.
Other budget highlights:
- The wage tax reductions that had been put on hold in 2009 will resume in the coming year and continue at least for the next five years, in the mayor’s proposal. The wage tax rate for residents will drop from the current 3.9280 percent to 3.7568 percent by 2018. That would mean about a reduction of about $100 per year for someone earning $50,000 a year.
- The mayor is setting aside roughly $84 million over the next five years for costs of increased labor contracts. This includes money for the non-uniformed workers represented by District Councils 33 and 47. The unions are furious about the mayor’s recent decision to ask the Pennsylvania Supreme Court to allow him to impose terms on the unions in lieu of a contract (see related story).
- The long-range budget forecasts about 3% growth in tax revenues thanks to an improving economy.
- The budget includes plans to borrow nearly $200 million in the coming year for the previously announced plans to build a new police administration building in West Philadelphia (see related story).
- The mayor calls for extremely modest increases in some city services, totaling $18 million. This includes nearly $5 million in new equipment for the fire department, and $1.2 million more for the Revenue Department, for better collection of delinquent taxes (see related story).
- The budget includes no additional revenues for the cash-strapped Philadelphia School District (see related story). The mayor’s finance director, Rob Dubow, said no request for extra money has yet come from the district, but he cautioned that the school system’s budget process is still underway.
That morning, hundreds of city workers angry over stalled contract talks began lining up hours before the mayor’s speech to get seats for the address (photo below).
Council president Darrell Clarke told reporters that security had been increased for today’s highly charged session.
“We will have the appropriate staffing levels from both Civil Affairs (unit of police department) and City Council,” Clarke said.
The delivery of the budget proposal launches a lengthy review by City Council that is not expected to conclude until May at the earliest.
Some councilmembers have already proposed alternatives to the implementation of AVI. Councilman Mark Squilla wants the new property values phased in over four years (related story). Councilman Bill Green proposes eliminating all the relief measures, to keep the overall tax rate as low as possible.
And councilman Jim Kenney is proposing a flat tax rate of 1.0%, with budget cuts to make up the resulting $200-million shortfall in revenue (see related story).
Stay tuned to KYW Newsradio 1060 and CBS Philly for updates on Mayor Nutter’s budget address today.