The Thrill of a Boring Budget

Mayor Nutter's short-term financial planning (translation: long-term, we're still screwed)

After three years of non-stop budget drama that included massive tax hikes, huge spending cuts and endless political wrangling, Mayor Nutter delivered to City Council last week a budget that was remarkable only for its blandness. And that’s probably a good thing.

Nutter’s plan includes no tax hikes, no massive cuts, and only minimal new spending on basics like a police recruiting class. Former Mayor Street called it a “re-election budget,” and he’s right. There’s nothing in it that offends (unless you’re offended that it doesn’t include more cuts), and nothing in it that excites. That means the city is, at last, financially stable, at least in the short term.

[SIGNUP]True, that short term could come to an end as early as today. The city may be finished with cutbacks, but the state and the feds are just getting started. Gov. Corbett will announce his budget plans today, and everyone expects Harrisburg to eventually pass a spending bill that includes big cuts to health and human service programs in cities like Philadelphia. How deep the cuts will be is a mystery. Corbett has kept an unusually tight lid on his plans. Republicans in the U.S. House are also on course to cut aid to cities, including a proposed two-thirds reduction in Community Development Block Grants, which are used to spruce up neighborhoods and subsidize development in low-income ares. In other words, more pain is coming, though it is unlikely to come close to the cuts that were necessary over the last three years.

It’s worth noting as well that the new budget does nothing to fix the city’s terrible long-term financial position, which is mostly due to rising health-care costs and pension payments. Nutter can’t just cut health-care costs or pension benefits for the city’s unionized workers. He has to bargain for them, or convince an arbitrator that the cuts are necessary, a job he’s had little success at so far. The city’s blue- and white-collar unions are working under expired contracts, while the police and firefighters got advantageous deals in binding arbitration in 2009 and 2010.

It was interesting that Mayor Nutter did not use his budget address to chart out a long-term agenda. He certainly could have. The budget speech is Philadelphia’s version of a state of the union address. The TV stations show up, the print media is out in force, and the mayor has a captive audience. But Nutter used the occasion mostly to celebrate the fact that the worst was over, almost as if he was giving thanks for the fact that the city—and his political standing—were still intact after three incredibly trying years.