Another Round of Budget Cuts Across Region

With next year's budget proposals underway we are already seeing the hatchet for slashing budgets that brought about fears of government stand still last year.

Philadelphia is faced with a budget deficit of upwards of $100 million for fiscal year 2011. Over the five years that the city has to plan for, it's looking at a $500 to $700 million shortfall. This is a significant chunk of change to add on to the $2.4 billion already cut in the city's five-year plan last round.

Balancing the budget this time around will probably rely on municipal service cuts and the city worker's contracts more than new taxes. The failed solution of the new 8% sales tax is part of the issue, yielding lower than expected revenue due to the weak buying power of city residents hurting from the recession.

Instead, the Mayor has asked City departments to report what 2.5, 5, and 7.5 percent reductions would mean for their programs and staff. The possibilities of increases in taxes like the business privilege tax remain off the table in order to "protect" the business community, though profits have returned for many of Philadelphia's largest firms (Cigna, Comcast, Sunoco, and UniSys to name a few).

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Across the river, the state of New Jersey is facing a $1.2 billion deficit for the year. It will be the first major test of new republican Governor Chris Christie. 

The plan that is suspected to be announced - cuts to state workers, from the state house down to local school districts. Health care costs are one of the main target, and passing health benefit costs back to workers is the solution we will see the NJ state lawmakers propose. The other target, pensions, the Christie will proposing tightening who gets in and who gets benefits.

The situation is all too similar to Philadelphia city workers, who have gone since March 09 without a contract.

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These local budget issues are not in isolation. With the Obama administration promising a budget freeze until the federal deficit is brought under control we shouldn't expected an already stressed national government to save the day. Mayor Michael Bloomberg, said just that when announcing the budget proposal for New York City. “There’s not going to be a Hail Mary pass coming from the federal government,” he told the New York Times. And expecting no pass he may turn to stop funding 500 soup kitchens and food pantries, close 20 fire companies, and a homeless shelter.

The economic recession that took hold of the financial markets in September 2008 has rocked budgets of local, federal, and state governments.  With no end in sight, the recovery in stock markets has yet to translate into an increase in jobs. The latest job numbers many feel are contradictory, leaving uncertainty of when we will see businesses create more jobs than shed. 

Last week the Dow Jones and world markets went on a roller-coaster ride, with investor confidence shaken by budget troubles for Euro zone governments Spain, Portugal, and Greece.

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We are seeing tremors of what could be another downturn. If we are spared this fate, we are surely getting a sense of what "recovery" really looks like - budget tightening by state and local governments through cuts on workers, the decreased ability for federal government to offer relief, and a consolidated market with continued opportunity for large businesses to profit while the rest of us struggle to survive.

It is clear that this state of affairs requires an independent social movement to propose new solutions to this crisis. Otherwise, whatever solutions are proposed will force the burden of the crisis onto the backs of poor and working people.