With a big deficit and no help from Harrisburg, Mayor Murphy looks for ways to cut costs

Friday, August 01, 2003

By Timothy McNulty, Post-Gazette Staff Writer

With no relief coming from the Legislature, the Murphy administration is planning to lay off more than 500 workers and shut down senior centers, recreation centers, pools and other services to save money, sources said yesterday.

The cutbacks, which still won't prevent the city from going broke by the end of the year, could be announced as early as next week.

Neither Mayor Tom Murphy nor his spokesman would confirm the plans.

The cuts, which are being discussed with city department directors and bureau chiefs, also could include suspending Public Works services such as rodent control, and selling the city's asphalt plant, said a source who spoke on the condition of anonymity.

Murphy has already said events such as September's Great Race could be canceled.

The city is facing a $60 million budget shortfall this year, which it wants to make up with tax increases and pension aid, both of which require state approval.

But the Legislature is in recess, with the big issues of property tax reform and legalized slot machine betting at racetracks still unsettled. That means no votes on a Pittsburgh budget package, either.

With the delay, "it has become increasingly unlikely" the city will be able to balance its budget this year, Murphy's executive secretary Tom Cox acknowledged in a letter to City Council yesterday, forcing city officials into the latest talks about layoffs and other cuts.

The talks involve "what expenditures we can legally and effectively cut from our budget, including, but not limited to, personnel, services and facility cuts and closings," Cox wrote.

"While we firmly believe that such cuts will negatively impact the quality of life in our city, we must begin the necessary planning to ensure the city's solvency. Even with deep expenditure cuts, if there is no [state] legislative action, the city will be insolvent by year's end."

The layoffs are expected to include the city's 202 school crossing guards, who are supposed to return to work late this month when the parochial school year starts. The city public school year resumes Sept. 2.

Marlene Lamanna, president of the school crossing guards union, said city officials told her Wednesday that "things didn't look good" for the guards but layoffs were not imminent.

The Murphy administration wants Pittsburgh Public Schools to help pay for the guards, which are budgeted for $2.6 million this year.

Allegheny County Labor Council President Jack Shea said he had not heard layoff details from administration officials or any other union heads.

Murphy has said for months that he would be forced to lay off roughly 400 workers, cut services and study bankruptcy if the Legislature did not approve the package he proposed to fill the hole in the city budget.

The plan, developed with city business leaders, contains a $52 occupation tax; 0.45 percent payroll tax on for-profit employers; and some $12 million annually in pension aid. In exchange, the city would cut business privilege taxes by a sixth and mercantile taxes in half, and submit its budgets to an oversight board for approval.

In late June, Murphy said he would be forced to cut jobs in late July if the state did not act. Early this week, a mayoral spokesman said no decision on layoffs or service cuts would be made until it was clear the General Assembly would not return for the rest of the summer.

"We are continuing to prepare, in the event the Legislature does not return before the fall," spokesman Craig Kwiecinski said yesterday.

Without state assistance, Murphy has said, the city will not be able to pay its bills -- such as debt payments -- starting in November.

A cut of 500 jobs would represent 11.5 percent of the 4,353 positions on the city payroll. The city writes $7.7 million in paychecks every two weeks.

Employees in the city's second and third biggest unions have "no-layoff" clauses in their contracts: 849 firefighters, and 503 foremen, white-collar workers and clerks in the American Federation of State, County and Municipal Employees union. That means almost a third of the whole work force cannot be laid off.

Police officers, the largest employee group with 1,023 budgeted positions, can be laid off according to seniority. Nonunion employees and all other personnel can be laid off, including paramedics, laborers, refuse workers, recreation teachers and crossing guards.

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