Nutter calls out state and federal officials for balancing budgets on the backs of cities

Philadelphia Mayor Michael Nutter opened Tuesday’s meeting of the State Budget Crisis Task Force with some choice words on the lack of state and federal support for local government.

“Local governments are being squeezed by federal and state government cuts and changes,” Nutter told an audience of policy experts gathered at the National Constitution Center for a series of panels about state and federal collaboration on financial issues. “The current path is certainly not sustainable.”

“The federal government cannot balance its budget on the back of cities and local governments,” Nutter said.

The Mayor’s speech responded to the theme of federalism, the topic of the day at Tuesday’s panel discussions.

Federalism is the political system that guarantees the states’ right and responsibility to manage major services including education, safety, infrastructure and health care.

The discussion hosted by the State Budget Crisis Task Force, a group under the leadership of former Federal Reserve Board Chairman Paul Volcker and New York’s former Lt. Gov. Richard Ravitch, is the last in a series of “National Dialogues” on the team’s investigation of fiscal stability in six U.S. states.

“Please don’t stand in the way”

In his speech, Nutter said Philadelphia had kept up its end of the bargain struck when it accepted federal stimulus money following the 2008 recession.

But that doesn’t mean the city can shoulder local expenses alone, he added, especially as federal funding to states dries up.

“We made our cuts. We’ve cut back services and we raised people’s taxes. We’re now trying to come back,” Nutter said in a passage of his speech addressed to federal and state lawmakers. “Please don’t stand in the way.”

For the new budget year, the city has scaled back housing assistance, infrastructure development, and above all, public education.

Nutter’s comments come as discussions on the state budget continue in Harrisburg which is a source, the Mayor hopes, of last-minute cash to save Philadelphia schools from the deepest cuts.

District Superintendent William R. Hite Jr. has asked the state for $120 million.

A $2-a-pack cigarette tax passed by City Council to raise revenue for schools has not yet received the state approval it needs.

Federal cooperation sought in other sectors

The mayor also voiced concerns about reduced FEMA grants to cities for homeland security as well as poor integration between local law enforcement and federal anti-terror activities.

Nutter additionally decried federal proposals to cap the tax exemption on municipal bonds, a move he predicted would limit an important revenue stream for cities.

The State Budget Crisis Task Force will soon issue its final report on near and long term fiscal sustainability in California, Illinois, New Jersey, New York, Texas, and Virginia.

Former President Bill Clinton was the keynote speaker at Tuesday’s meeting.