City Will Be Broke by Dec. 1, Philadelphia Mayor Warns

Philadelphia will run out of cash by Dec. 1 unless state and local politicians take quick action to right the city’s foundering finances, Mayor W. Wilson Goode said Friday.

City officials have been warning for weeks that they would run out of cash by the end of the year, but Goode’s announcement Friday was the first time that a specific date has been targeted.

“I don’t want to even think about us not being able to solve this problem,” Goode said after a meeting with key members of the City Council and the city’s legislative delegation.

The mayor said that, with no action at all, city coffers would be empty by Nov. 9. But he has instituted a hiring freeze, deferred pension fund payments and put off paying back illegally collected real estate transfer taxes to stretch the city’s cash for another three weeks.

The city’s financial problems have been building for years, but the present crisis was brought on by a $206-million deficit, the downgrading of the city’s bonds to junk status and the collapse of a deal to sell $375 million in short-term loan notes.

The note sale is necessary to tide the city over until spring, when large amounts of property and business taxes come due.

Goode said a decision to try once again to sell the notes would depend on “my evaluation of whether something positive will occur in Harrisburg,” the state capital. Instead of a state bailout, he said, the city needs the ability to enact a local sales tax, to require employers to withhold the city wage tax and to employ deficit financing.

The mayor said the city is asking the state for only one chunk of cash--$32 million--to pay for services for children and youths that the state mandates but does not pay for now.