Philly mayor carries Atlanta’s request for bailout funds

Washington — Philadelphia Mayor Michael Nutter traveled to Washington on Friday with a letter from his city, Atlanta and Phoenix asking the federal government to use a portion of the $700 billion financial bailout plan to help large U.S. cities with pension costs, infrastructure investment and cash-flow problems stemming from the global financial crisis.

Nutter delivered the letter to Treasury Secretary Henry Paulson. The letter is signed by Nutter, Atlanta Mayor Shirley Franklin and Phoenix Mayor Phil Gordon.

“We who run some of America’s larger cities are dealing with the economic damage wrought by the credit and housing crises as we write this to you,” the letter reads. “The economic contraction precipitated by these twin crises is forcing us, and mayors all across the country, to dramatically reduce programs and services for millions of residents we serve.”

Franklin said Wednesday the city’s employees will have their hours — and pay — cut by 10 percent each week to help the city weather an expected budget shortfall of $50 million to $60 million.

The pay and hour cuts, which begin Dec. 1, affect 4,600 city employees.

Franklin also announced an immediate hiring freeze for most city agencies and said the city will have to cut back some services, dip into its reserves for about $12 million and make other personnel moves.

Blaming the shortfall on the nation’s economic crisis, Franklin said the city needs a “federal rescue plan” in addition to its cuts to balance the budget. In a similar letter Monday to U.S. Rep. Charles Rangel (D-N.Y.), chairman of the House Ways and Means Committee, she asked for federal investment in Atlanta’s — and other cities’ — infrastructure, public safety, and programs for job training and placement.

“The future prosperity of this country is tied directly to our ability to provide basic services and quality infrastructure to our citizens,” Franklin wrote. “We are at serious risk in failing in that most basic public responsibility.”

And if current economic conditions continue, she told the City Council’s Finance/Executive committee, “This will not be the last time you see me before the end of the fiscal year.”

Last week, Nutter announced Philadelphia would be laying off city employees, cutting salaries, closing most of its swimming pools and shutting nearly a dozen library branches to cope with a $108 million shortfall this year caused by lower business and real estate tax revenue. The deficit could grow to a total of $1 billion over five years.

In Phoenix, the city is expecting a $250 million deficit this year, which could lead to cuts in police, fire, parks and library services, Nutter has said.

The three mayors propose providing loans to help cities pay pension costs. They also want $50 billion in loans for investment in infrastructure, and additional one-year loans to cities unable to borrow cash because of the tight credit markets.

The Philadelphia pension system lost more than $650 million in the first nine months of the year.

“We are not looking for a handout; we are looking for a hand up,” the mayors wrote.

Nutter will meet with Treasury officials, senior staff from the Committee on Ways and Means, senior advisers to House Speaker Nancy Pelosi, and a policy adviser on President-elect Barack Obama’s transition team.