City in the balance

Sad. Nightmarish. Exhausting. All three adjectives have been used to describe the budget and tax-cut quagmire that stands between Mayor John Street and City Council.

The City Charter requires the mayor to approve a balanced budget by the start of the new fiscal year, which begins today.

At press time, no progress had been made to resolve the impasse. If that situation remains, the city will be unable to pay for any of its services — including police, firefighters, vendors and municipal employees.

"We don’t want to see the city shut down, but if it does, it’s on the mayor and his supporters," accused Councilman-at-Large James F. Kenney.

Council approved its $3.5-billion budget on June 21 by a 12-5 margin. Councilman-at-Large Juan Ramos switched sides to OK the budget, which would give Council enough votes for an override if Street vetoes the latest proposal.

Kenney said the budget impasse could drag on for an indeterminate period. Council has stood firmly behind its five-year, $160-million tax-reform plan, while the mayor has preached that smaller cuts over longer periods of time make more fiscal sense.

"The mayor wants to make sure that we don’t empty our coffers and are not stuck waiting for the supply-side effect to take effect," said Barbara Grant, a spokesperson for Street.

But Kenney sees it another way: "The mayor’s holding his breath and throwing a temper tantrum. Who knows when he’ll decide to stop?"

It soon could become more difficult for both sides to hold their ground.

AFSCME District Councils 33 and 47, which represent 14,000 of the city’s blue- and white-collar union workers, are expected to seek a strike vote — their contract negotiations remained unresolved as the budget deadline loomed.

The mayor also must contend with Wall Street rating agencies, which could lower the city’s credit rating and increase borrowing costs if the stalemate drags on.

Grant said the mayor will not rush to judgment, deadline or not.

"The mayor is still in the information-gathering stage," she said. "He is meeting with Council and his advisers and is still evaluating the situation."

The much-debated tax-reform legislation also passed on June 21, but the mayor still has the power to veto the package — a move that might actually work against him, according to one political player.

"It’s a perverse situation. The mayor is counting on the parking tax increase, which he can’t get without lowering the city wage and business privilege tax," said Brett Mandel of Philadelphia Forward, an advocacy group for tax reform. "If he vetoes the tax bill, he’ll blow a hole in the budget that will make it unbalanced."

Kenney said Council worked feverishly to assemble a five-year balanced budget, which included restoring more than $14 million to the arts, recreation centers and fire department that the mayor originally had eliminated.

"[The mayor’s] managing a crisis that he created. It’s a very sad situation, but we did our part and put together a balanced budget. Now we’re in limbo," Kenney said.

Four of the city’s ladder companies and four engine companies are also in limbo after Fire Commissioner Harold Hairston recommended them for closure.

Five of those companies are in the First District, the turf of Councilman Frank DiCicco.

"For the life of me, I can’t understand the rationale for these cuts," DiCicco sighed. "If you want to talk about Safe Streets, well, how safe will they be with less help in the city’s most populated district?"

The timing of the budget crisis couldn’t be worse, as the city will be the center of international attention during the coming Fourth of July weekend.

Afghan President Hamid Karzai will be in town to receive the Philadelphia Liberty Medal during a celebration in front of Independence Mall on July 4, and former President Bill Clinton will bring his book tour to the National Constitution Center on July 5.

However, Street is taking the budget issue a day at a time, according to Grant.

"The mayor isn’t concerned about that right now," she said of the holiday events. "The date that is most pressing to him is the July 1 deadline."

DiCicco said he worries the budget fallout could affect the city’s tourism revenues.

"Really, we’re all hurt by this," he said. "People may see and hear about [the budget crisis] and think that because of all of the cuts, this isn’t a safe place to visit. It’s not doing the city any good."

Mandel sees the standoff as a game of political chicken.

"It’ll be interesting to see how strong the politicians’ stomachs will be for this," he mused. "On the one hand, we’ve achieved the high-water mark for tax reform in the city’s history. On the other, we could be entering a nightmarish situation."