State still has to approve sales tax hike, or there'll be cuts

 CITY HALL. After adopting a 2009-2010 city budget Thursday morning, City Council members expressed little concern with recent speculation by economists and retailers alike that business would be hurt by a sales tax increase for the next five years.

But state lawmakers, struggling to meet their own deadline next month, were less unified in their feelings about allowing Philadelphia to jack up by 1 percent. The city also needs approval to put off funding the city workers' pension for two years.

State Rep. John Perzel said the city's requests, which will require a lot of lobbying by Mayor Michael Nutter the next few weeks, show no effort by Nutter or Council to downsize city spending despite the economic downtown.

"If you look at these major corporations and what they have to do to move forward, some are laying off 40 percent of their workforce," Perzel, R-Northeast Philadelphia, said. "So far, it doesn’t look like the city is doing anything to help itself."

Without state approval, Nutter stressed Thursday that massive cuts to city government would become reality, including layoffs in every department and less services like garbage collections and inspections.

One state senator from Philadelphia said last week that Senate Democrats also have concerns about the sales tax increase, but did not rule out support for it next month.

"I don’t expect this new increase to impact anything dramatically," Councilman Wilson Goode Jr. said. "Those who are looking to save money are already looking at the current sales tax and at shopping outside the city."