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“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
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.