'No End In Sight' For Budget Crisis

PHILADELPHIA - A day after threatening that the state budget impasse could lead to a virtual shutdown of the justice system in Philadelphia, Mayor Michael Nutter has to present his dire "Plan C" to a state agency for approval.

Nutter told "Good Day Philadelphia" on Thursday morning the state legislature's failure to act on a request to raise Philadelphia's sales tax a penny on the dollar has already cost the city $20 million. Thirty positions and several programs were slashed to make up that difference.

And if there's not immediate action, Nutter said the city could lose another $10 million for September, too.

Plan C cuts $700 millions from the city's five-year plan.

"It's a day that we've been trying to avoid for a long, long period of time," the mayor said. "We never really thought we'd find ourselves in this situation. It could be devastating for the city. But this process has started, unfortunately."

The decision on where to cut up to 3,000 positions has come after a review of the city's 12,000 employees, their records and background and seniority, Nutter said. Many of the decisions are governed by Civil Service regulations and collective bargaining agreements.

"This is really bad for Philly," he said.

He added that a justice department shutdown due to the inability to pay for court-related operations would hurt lawyers and businesses outside the city, too.

"We've now reached a point where, here in late August, we have no real end in sight," Nutter said. "I mean, there are committee hearings and meetings going on, but it takes money to run this organization – money that we don't have – and we now have a deadline set by our financial oversight entity, PICA, that says we have to have a new five-year plan showing how we would run the government without the $700 million in enhanced value that we would get from the legislature."