PHILADELPHIA – The City Council’s passage of a $3.4 billion budget on June 11, a budget that includes steep cuts in a local income tax that funds many municipal services, has prompted anxiety and anger among city workers here. A July 7 rally involving over 2,000 city workers and their supporters highlighted their concerns and demanded fair contracts.

Several city contracts with the municipal unions are still being negotiated, and the projected drop in city revenue as a result of the cuts in the so-called wage tax – estimated at $50 million over five years – threatens to further undermine city workers’ wages, health benefits, and pensions. The cuts threaten to seriously jeopardize fire and police protection, as well.

“No concessions!” said Pete Matthews, president of AFSCME District Council 33, to the rally at Love Park. “Stop balancing the city’s budget on the backs of city workers.” Matthews questioned why the city can find money to build stadiums but can’t find money to pay for the wages and benefits of its workers.

Tom Cronin, president of AFSCME District Council 47, questioned why City Council and Mayor John Street agreed to more tax cuts when past cuts did not bring good paying jobs to the city or stop people from leaving.

“Tax cuts mean city workers will be asked to accept a contract that leaves them worse off,” said Cronin. “It means layoffs and reduction of health benefits and less pension security. We need to build a powerful coalition of union members and working people to make our political leaders demand that big business and the corporations pay their fair share for city services.”

Months ago, city residents were told by a blue-ribbon Tax Reform Commission that the tax cuts would make the Philadelphia more “competitive” in bringing businesses and jobs to the city and would result in economic growth and revitalization. In addition to cuts in the city’s wage tax, the commission’s original proposal also included sharp cuts in the business privilege tax.

Mayor Street countered by arguing that the proposed cuts would bankrupt the city and threatened to veto the entire budget. The City Council didn’t have enough votes to override his veto. By the deadline of July 1, a compromise was struck: The mayor agreed to cut the wage tax, but not the business privilege tax.

As a result, there will still be cuts in every department, but many services – such as recreation centers and pools, which had been slated to close – will be spared.

Others are not so lucky. The city has threatened to eliminate four ladder companies and four engine companies from the Fire Department. Les Yoast, a spokesman for Local 22 of the Philadelphia Firefighters Union, asked why the city would make such cuts when just two weeks ago firefighters from one of them had saved several lives in a fire. The union has gone to court to stop the closings and the court has ordered an investigation.

City workers whose unions are still in negotiation with the city have voted to strike if a fair contract is not offered soon. The police union, whose department is facing $4 million in cuts, is currently in binding arbitration with the city.

Several union leaders, including Jean Alexander, president of Transport Workers Union Local 234, John Gavin, United Food and Commercial Workers, and spokespeople for SEIU Local 36 and the American Postal Workers Union pledged their solidarity with the city workers. Support was also brought by NAACP President J. Whyatt Mondesire.

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