An hour ago, Mayor Nutter held a press conference to announce that – due to the state Senate’s delay in voting on Philadelphia’s proposed sales tax hike – the city has already lost out on about $20 million dollars that the tax hike should have raised by now.

And so, about $20 has been cut from the budget. In an emailed statement, the Mayor’s Office outlined the following cuts:

The cadet class for the Police Department, scheduled to begin this fall, will be delayed, saving the $3.2 million this fiscal year.

The Mayor’s Office will eliminate six full-time positions, saving $500,000 annually.

Starting August 29th, the 3-1-1 call center will change its hours of operation from 24 hours a day, 7 days a week to 8am-8pm on weekdays, 9am-5pm on Saturdays, and closed on Sundays, saving $230,000 annually.

The Office of Fleet Management will stop purchase on all City vehicles other than replacement police cars.  This ban includes snow removal equipment, sanitation vehicles and road repair equipment, saving $4.8 million in FY10.

The Department of Finance will eliminate six full-time positions and reduce supplies, equipment and contracts, saving $1.3 million annually.

The Commerce Department will eliminate three full-time positions, saving $233,000 annually.

The Planning Commission will eliminate six full-time positions, saving $341,000 annually.

The Law department will reduce contract spending for outside legal counsel, saving $1.3 million annually.

The Department of Public Property will reduce maintenance contracts, saving $2.5 million annually.

The Department of Licenses and Inspections will reduce contracts and supplies, saving $140,000 annually.

The City Representative will eliminate three vacant positions and reduce contracts, saving $287,000 annually.

The Streets Department will reduce garbage disposal contracts, saving $3 million annually, and will curtail street tree trimming and maintenance contracts, saving $1 million annually.

The City will eliminate its final $1.5 million payment to the Housing Trust Fund.

Temple is celebrating its 125th birthday, but the city’s largest university can’t afford a party. In fact, some students are debating whether to go back next semester after a likely 45 percent increase in tuition. State representative and Temple Law alum John Taylor (R-Phila.) warned his alma mater’s Health System not to close its Northeastern Hospital, or else: He would respond by chopping $175 million in state funding for TU, potentially resulting in a $5,000 increase in yearly tuition per student.

But the hospital lost more than $6 million last fiscal year and could lose more than double that figure this coming year — the reason why the university decided to terminate the hospital, despite political threats. (Taylor feels as though the university has a social responsibility to provide hospital services to the surrounding community.)

“Now their day of reckoning has arrived. If they want to act like an arrogant private institution, then they’re going to be treated by this Commonwealth like an arrogant private institution,” Taylor told KYW Newsradio. As a result, students might now face this tuition spike, and many maintain that Taylor has no right to punish them, as they had no influence on the decision to close Northeastern.

To spread awareness, student advocates created a Twitter, a blog and a Facebook group to promote a rally protesting the tuition increase at Temple’s Student Center at 2 p.m. yesterday. Although the group gained more than 300 members by the time of the rally, only a few students showed up. Still, the media arrived on the scene:

I’m the guy with the schoolbag in the beginning. This clip didn’t include many of the points I made, including my opinion that Taylor’s decision to block much-needed funding from Temple punishes the wrong people: the students. After four years of school, an extra $5,000 per year amounts to $20,000 — much more than the current yearly tuition (a rough average of $12,000 for in-state students). That means that compared to last year’s graduating seniors, incoming freshmen will pay for five years’ worth of education, but only receive four.

Just as the students demanded at the protest, I believe Temple and Rep. Taylor should cooperate with each other to hash out this clash, raising their respective voices — and not our debt.

You’ve got to love Governor Ed Rendell’s knack for accidentally saying exactly what’s on his mind.

Like on Tuesday, when, according to the Pittsburgh Tribune-Review, Rendell dropped this little bomb:

“If the Legislature sent me a video poker bill, I would sign it even if (the revenue) is not for higher education,” Rendell said.

It’s an interesting position to take — especially since the entire justification for legalizing video poker was that the proceeds would offset tuition at state schools.

The current proposal would allow every bar in the Commonwealth to apply for up to five machines. It is, as I’ve editorialized aplenty, a scary proposition: It would make slot machine gambling – well-known as one of the most addictive/harmful forms of legal gambling — accessible on a level unprecedented in the state, especially in Philadelphia, which has thousands of bars.

Until that statement, Rendell could defend his support for the measure by saying he it was pro-education. But that, apparently, was a secondary excuse: Increasingly, Rendell seems to be plain ol’ pro-gambling.

Lucky for him, the gambling industry happens to be pro-Rendell: According to a report by the Common Cause Pennsylvania, the governor received more than $1 million in campaign donations from the gambling industry between 2001 and 2008.

Evan M. Lopez

Over at It’s Our Money, Ben Waxman identifies a question/comment a lot of people have about Mayor Nutter’s doomsday budget, and answers it. The concern:

I have seen a number of comments on this blog and others accusing the mayor of resorting to scare tactics. Here is the rationale: Mayor Nutter is intentionally laying off cops and firefighters to get people upset and put pressure on the state legislature. He could easily cut other areas– health centers, libraries, and recreation programs– to make up the budget deficit.

The response:

There is just one problem with that logic: it’s completely wrong. Spending on public safety– police, fire, and prisons– dwarfs every other part of city government. About 29% of the city’s $4 billion budget goes to these costs. If the city is forced to cut $700 million from the budget, most of it will have to come from the areas where the money is.

That’s definitely right. The only thing I’d add is this: When I hear people talking about how wasteful the city is, they tend to talk about that waste very abstractly. They have this vision of a lazy city worker sitting somewhere, collecting a paycheck and waiting on a pension, but they have no idea what that worker actually does. The reality is most city workers are doing things society values. Working at rec centers, making the bureacracy function at L&I etc.

Are there lazy workers within those departments? Probably, just like there are lazy workers everywhere. But they’re not so easy for Mayor Nutter to just find and fire.

Now, there are a few items that get identified specifically as wasteful in these conversations. DROP, numerous council aides, the Mayor’s Office of Community Services. And they may be. But, as Ben says, with the size of deficit Philly’s facing, cutting these things is a drop in the bucket — and in some cases, for the Mayor, more procedural trouble than they’re worth.

UPDATE: This, however, from Ray Murphy at YPP, is a good point:

If there is any reason to be critical though it’d be the fact that the revenue agreement the Mayor and Council reached in the first place was predicated upon state action. It’s not like we didn’t know things would be tough in Harrisburg. The alternatives–raising property or wage taxes–came with other political risks that most members of Council and the Mayor weren’t willing to take.

Photo | Matt Petrillo

Controller candidate Al Schmidt objects to Nutter’s position, and came out to tell people so.

Mayor Nutter led a rally in the City Hall courtyard calling on state legislators to approve two measures — allowing the city to raise its sales tax temporarily by one percent, and allowing it to reform its pension payments — that would enable Philadelphia to meet its budget goals without draconian cuts.

Dozens of city workers, protesters and (not that many) other supporters gathered before the 2 p.m. meeting, to which Nutter arrived a fashionable 20 minutes late. “Philadelphia is about to get in a lot of trouble,” commented one woman as he approached the mic. The entire audience then began to chant, “No more budget cuts! No more budget cuts … ” to which the mayor replied, “I agree with you!”

He began his speech by noting the social, political and economic significance of Philadelphia: “This is the birth place of freedom, liberty and democracy!” He then got down to business, saying that he is not asking for a penny from the state, but instead, for it to approve the two provisions to his budget plan. “We cannot run a government solely on hope,” he said. “We need money!”

Al Schmidt, a candidate for city controller, disagrees with Nutter and believes that the mayor has betrayed the public’s trust. “Philadelphia has the highest taxes and the highest debt [of] any other city in the nation. [Nutter] is borrowing more and more money, and still saying we don’t have enough. It’s bologna,” Schmidt said, while supporters at his side held signs for his campaign.

Nutter said that without his plan, the city will face dire consequences, including reducing trash pick-up from once a week to twice a month (eliminating 350 street worker positions); a reduction of 972 police officers; the closing of fire stations (eliminating nearly 200 positions), two Health Centers (resulting in a loss of 112 positions); all branch and regional libraries (eliminating 490 positions); recreation centers, parks and numerous department agencies. This would have an accumulated total of approximately 3,000 eliminated positions.

“This doesn’t have to happen,” he reassured the public. “I’m not asking for a handout. I’m asking for a hand.”

The audience clapped for the mayor after he finished his speech, but people seemed baffled by the situation. “We need the schools! We need to help our children! What is going on with this city?” a woman declared after the applause.

“Believe it or not,” a man replied, “it’s really up to the governor.”

To some extent, I assume (and hope) that the doomsday scenario the mayor spelled out today is a negotiating position. But still, can you imagine this?

Budget actions needed without Harrisburg approval of 1% increase in City sales tax and changes to pension payments

Police
Eliminate 972 positions including 739 sworn officers, 43 civilians, and 190 by attrition.

Fire
Deactivate 6 engine companies, 3 ladder companies, and 5 ALS medic units.
As a result eliminate 36 officer positions, 120 firefighter positions, and 40 paramedics positions.
Engine and ladder deactivations will likely result in the complete closure of fire houses.

Health
Close 2 City Health Centers resulting in a significant negative impact on Philadelphia’s uninsured population.
Eliminate Medical Evaluation Unit.
Eliminate 112 positions.

Streets
Reduce trash pick up to twice a month, eliminating 350 positions.
Reduce citywide cleaning and eliminate all citywide support staff, an additional 50 positions.

Recreation
Close all Recreation Centers and cease all programming.
Eliminating 450 positions.

Free Library
Cease operations at all branch and regional libraries.
Eliminating 490 positions.

Fairmount Park
Cease all operations, eliminating 142 positions.

Commerce Department and Philadelphia City Planning Commission
Cease all operations, eliminating 59 positions in total.

Further eliminated positions
Mayor’s Office – 18 positions
Managing Director’s Office – 21 positions
L&I – 6 positions
Finance Department – 23 positions
Division of Technology – 79 positions
Human Resources – 8 positions
Records – 12 positions
Revenue – 2 positions

APPROXIMATELY 3,000 POSITIONS ELIMINATED

Says the mayor:

“I had hoped this day would never come but the time is now,� said Mayor Nutter.  “Call your state representative or state senator.  Ask friends and family from other parts of the Commonwealth, especially our suburbs, to call their legislators to ask them to help Philadelphia, because it’s important for the rest of Pennsylvania.�

At 2:00 in the City Hall courtyard, Mayor Nutter will be leading a rally to call on Harrisburg to not screw us totally. He’ll also be releasing some of his most detailed plans for what he’ll do if they do screw us totally (800 cops laid off? God damn).

This is interesting not only because you rarely see someone in a position of authority, like the mayor, leading a protest rally like this, but also because, as Ray Murphy points out,

the Mayor also invited some of the folks who have been organizing against cuts to come as well to help bolster his message. Of course, that could be a bit awkward as some of those same groups opposed the Mayor’s sales tax proposals and many are also standing in solidarity with city workers. Who, you may remember, are working without a contract and still negotiating with the Mayor regarding their contracts.

Strange bedfellows, I guess. We’ll have an on-the-scene report afterward.

Rep. Mike O’Brien

It’s been a bit hard to tell what Mayor Nutter expects to happen in Harrisburg with regards to the two budget measures the city is asking the state to take — allowing Philadelphia to raise our sales tax and delay some pension payments. Does the mayor believe, in his heart of hearts, that the state is gonna come through, and let Philly keep the (tough, but bearable) budget the mayor and council agreed on? Or is he just delaying the inevitable draconian cuts that will come when the state doesn’t lend its approval, waiting until he can say “I tried,” and point the finger elsewhere?

It’s hard to tell because Nutter has been careful not characterize his impressions of state legislators’ positions, and some of those legislators have taken a wait-and-see approach.

But this, this morning, is bad news for Nutter, and possibly for all of us. From Philly Clout:

State Rep. Mike O’Brien just left the closed door meeting, saying he wasn’t going to be “lecturedâ€� on the city’s finances. O’Brien said he has asked the city’s lobbyists and the administration why they won’t consider diverting the $87 million the city’s expected to receive in state gaming taxes towards the budget problems. So far, O’Brien said, he’s gotten no answers.

I don’t know anything about whether O’Brien’s gotten answers or even whether the question he’s asking is reasonable, but for the mayor and his plan, the fact that he’s this upset at this deep stage of the game poses a problem. Ready for once-a-month trash pickup?

UPDATE: Nutter came out of the meeting and said the Philadelphia delegation is behind the plan, though it’s not clear what came of the O’Brien spat.

Due to the state budget impasse, cash is really running low. Full press release from the Mayor’s office is below; essentially, the city had expected state payments it hasn’t received because Harrisburg hasn’t passed a budget. The city is also hoping for the state to allow it to raise the sales tax by 1%. That is very much not a guarantee and we may see big cuts instead — but these payments will get made regardless, is my understanding.

Philadelphia, July 17, 2009 – The City of Philadelphia has informed Harrisburg lawmakers that, due to the State budget impasse, the City is forced to delay spending on anything other than employee compensation, debt service, and emergencies.  This means that all payments to vendors and suppliers will be delayed until the passage of the State budget and passage of legislation authorizing an increase in the City’s sales tax and changes to its pension payments.  This step comes as the City faces a growing cash crisis which must be addressed immediately.

“I have made repeated trips to Harrisburg over the last several weeks and I know that lawmakers are working hard to pass a fair and balanced budget,� said Mayor Nutter.  “That said, the delay in the State budget process is severely impacting the City’s cash flow and we have no option but to take these difficult steps.�

The budget crisis in Harrisburg has had a more damaging impact on the City this year because Philadelphia is asking for critical items to balance the City budget – the authorization of the temporary sales tax increase and pension reforms.  These two items will generate $250 million in new revenues and savings in our current FY 10 budget, and provide $700 million over the course of the Five-Year Plan.  Without legislative action very soon, the City will be unable to complete a routine cash flow borrowing at an affordable rate as it normally does each year.

In addition, until a State budget is approved, the City will not receive any of the normal state reimbursements for services like child welfare services and juvenile detention.  In total, those reimbursements are about $100 million that are traditionally received at the end of August.

The City also announced that all new capital projects will be under stringent review. Over the next few days the City will review every capital project and will determine which can proceed in the absence of the passage of the State budget and the passage of legislation authorizing the City to raise the sales tax by 1% and make changes to its pension payments.

If the State budget is resolved and the legislation authorizing the sales tax and pension reforms (HB 1828) is approved in the very near future, the City will be able to avoid this cash crisis.

Dave Davies:

I PICTURED federal Judge Ronald Buckwalter tucking himself into bed last night, unbuttoning his robes to reveal a Vince Fumo T-shirt, with the letters “WGSD” emblazoned across the chest.

The letters stand for “we get s— done,” the staff motto that embodied the workaholic, results-oriented, cut-through-red-tape mentality Fumo was so proud of.

Karen Heller:

The former all-powerful senator, the Prince of Other People’s Money, convicted on all 137 counts of conspiracy, fraud, and obstruction of justice and fined $2,395,147.40, could be out in four years, in time for a Labor Day 2013 meal of blackened scallops, crab cakes, and old-fashioned ricotta pie in Margate.

What does this say about the quality of justice?

Mayor Nutter:

“In light of other cases like this, it’s difficult to look at the verdict and fully understand the rationale behind the length of the sentence and designated restitution amounts. Nevertheless, a simple, yet important message was reinforced today - - those who abuse the trust of the public, especially elected officials, will be caught and punished.�

Brian Hickey:

I perceive Fumo’s out-in-four vacay as 1) borderline racist and 2) borderline classist.

The prosecution is upset:

U.S. Attorney Michael Levy said that the government was “disappointed” by the sentence and that the feds may appeal it.

Other recent corruption sentences, for comparison.

Radio Times interviews prosecutors.

Well, it certainly doesn’t seem like anyone thinks Fumo got too long of a sentence.

• A fine of $411,000

• Restitution (with Ruth Arnao) to Citizen’s Alliance of $676,000

• 55 months in prison

Fumo must surrender by Aug. 31. After serving his time, he’ll be on supervised release for three years.

The U.S. probation office had put Fumo’s “sentencing guideline range” between 11 and 14 years, and prosecutors had previously argued that over 20 years would be appropriate. But Fumo will be out when he’s about 70.

We’ll have a round-up of reactions and some thoughts on this tomorrow.

It’s been more than a month since a group of state lawmakers introduced a law in the house that would legalize, regulate, and tax “video poker” machines — a kind of slot machine — and allow every bar in the state to apply for as many as five.

The purpose of the bill, behind which Governor Ed Rendell is putting considerable weight, is to provide tuition relief to Pennsylvania college students. They argue that illegal video poker machines are already operating throughout the state (the state police have given the number as 17,00, a number whose origin is not entirely clear) and that this legislation would regulate and tax an activity already going on.

Opponents of the bill call the legislation a massive and dangerous expansion of gambling. Even if there are 17,000 illegal slot machines operating in the state, the bill would open the door to as many as 80,000 new slot machines in Pennsylvania and as many as 10,000 right here in Philadelphia, where we’e already supposed to get two new slots casinos.

As regular readers know, I’ve written before about slot machines, and the ways their design and implementation is geared toward exploiting addiction, promoting unhealthy gambling, and, in some cases, perhaps creating addiction where it did not exist before.

Often called the crack cocaine of gambling, slots have evolved over the years to take more money from players more quickly. Slots generate most of a casino’s profits. One of the most disturbing statistics out there comes from Professor Earl Grinols, who found that as many as half or more of all casino profits come from problem gamblers.

In this multi-part episode of Philly From Scratch: The Podcast (subscribe on iTunes), I talk to three guests about video poker:

L-R: Rep. Paul Clymer, Rep. Dante Santoni, Attorney Paul Boni

State House Representative Paul Clymer (R., Bucks) is a member of the House Gaming Oversight Committee and one of the few House members who has consistently and vocally opposed the expansion of gambling in Pennsylvania – first with casinos, now with video poker. In this interview, he shares some of his concerns with the proposed legislation.

State House Representative Dante Santoni (D., Berks) is the Chairman of the House Gaming Oversight Committee and one of the sponsors of the video poker legislation. In this interview, he defends his decision to deny a request by Philadelphia Representative Mike O’Brien to hold hearings in Philadelphia.

Paul Boni is an attorney for Casino Free Philadelphia, a local group that opposes casinos in the city as well as slot machines in bars and taverns.

In the these interviews, my guests and I discuss various issues related to the legislation, and cite a few different studies and documents. Links to the relevant information after the jump.

If you like Philly From Scratch: The Podcast, you can subscribe via iTunes and have it delivered straight to your listening device — for free!

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On Monday, the Pennsylvania Senate proposed zero state funding for the Pennsylvania Historical and Museum Commission (PMHC), a position that’s in lockstep with Governor Ed Rendell’s prohibitive line item for the PMHC in the 2010 budget — if SB 850 is approved, the Commonwealth of Pennsylvania will no longer offer arts/culture grants beginning on July 1, 2009. It’s easy for arts lovers and history buffs to decry these decisions — what’s not as simple is getting an detailed grasp on what, precisely, slashed funding means for Philly.

Patricia Warner, assistant director of the Wagner Free Institute of Science, recently sent out a list of Wagner programming that will be affected and/or outright eliminated if SB 850 comes to pass, in the hopes that concerned Philadelphians will bring it to attention of their legislators (head here to do just that). Read the itemized list after the jump (and remember that this is just one of many orgs and historical sites in the city that’ll be touched by this).

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Pennsylvania gets better every day, don’t you think? Last week, members of the Pa. House introduced a bill, sought after by Governor Ed Rendell, that would allow every bar in the state (meeting certain conditions) — that’s some 14,000 venues  — to have up to five video poker terminals, which are identical to slot machines.

The machines, it is hoped, would coax a whopping $1.1 billion out of the pockets of Pennsylvanians, half of which would go to the state.

Then, yesterday, the state Supreme Court ruled struck down a law that prohibits gaming interests from making political contributions. The law was created to prevent the gaming industry from using the massive amounts of money they control to persuade lawmakers to pass legislation in their favor. Now they’re free to do it — and if the video poker bill passes, there will soon be much more money to throw around.

The impact of this legislation could be tremendous. While Rendell and the bill’s supporters justify this move by arguing that illegal slot machines already operate in the state, they also acknowledge that many, if not most, of those machines are located in western Pennsylvania and in rural counties.

What about the thousands of bars in Philly? Each would be allowed, as the others, to host five machines — a fact that renders Rendell’s assertion that this is “not an expansion” of gambling ridiculous.

One would expect Mayor Nutter to have something to say when it comes to legislation that could have a huge impact on our city, right? The number of slot machines we’re talking about would potentially dwarf the number of slots being brought into the city by casinos.

I asked the mayor about it when Governor Rendell proposed the idea a few months ago. Douglas Oliver, the mayor’s spokesperson, said that comment would be premature, since legislation hadn’t yet been introduced.

UPDATE: Today, Oliver e-mailed the City Paper the following statement:

We are always interested in ideas for and efforts to increase funding for education but we do not yet have comment to offer on this proposed legislation.  We need more time to determine the potential impact on Philadelphia.  As you are aware, we are working closely with the Governor and Harrisburg legislators on a variety of issues and, moving forward, I’m sure we’ll have an opportunity to talk more about this idea.

Meanwhile, I’ve been reading the video poker legislation itself. Here are a few preliminary findings:

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