By Mike Dunn

PHILADELPHIA (CBS) — With angry union members holding back on their jeers, Mayor Nutter today delivered his new budget for fiscal year 2014-15 to City Council (see previous story).

In his budget address he said the plan has no new tax increases but leaves the school district’s needs, for the moment, unmet.

“My administration wants fair, multi-year contracts with all of our union employees,” the mayor said this morning. “But fair contracts must include work rule changes, health care cost savings, and, most importantly, pension reform.”

Nutter boasted that his $4+ billion spending plan includes no tax increases, but he warned that something must be done to meet the school district’s latest request for an additional $75 million in city funding.

“To meet the funding request, I am again calling on the (state government) general assembly to authorize the $2-per-pack cigarette tax, as already approved by this City Council,” Nutter said.

And he made the case for his plan to sell the Philadelphia Gas Works for nearly $2 billion (see related story), a proposal that has already elicited skepticism from some councilmembers.

“I know that members of City Council appropriately have questions regarding the proposed sale of PGW to UIL Holdings (the winning bidder),” Nutter said.  “But let me restate my analysis, because I believe this is the right decision for us, for PGW customers, and for PGW workers.”

The speech also included a rare mea culpa from the mayor.  He is budgeting an additional $2.5 million to allow neighborhood branch libraries to open one additional day each week.  And Nutter recalled a budget five years ago, when he tried to close some branches:

“This Council was right (in opposing those closures) on this issue back in 2009.  And I’ve been determined to correct my mistake ever since.  And I apologize to the children and library users of this city for the impact of my decision back at that time.”

Last year, Mayor Nutter was unable to deliver his budget address after noisy protesters shouted him down in City Council chambers (see related story). He eventually completed the speech before a screened audience in the mayor’s reception room.

City Council will now launch what is expected to be three months of review of the budget, with the issues of school funding and the PGW sale likely to dominate the discussion.

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