by KYW's Mike Dunn
For the first time since Philadelphia's financial crisis in the early '90s, the city is suspending all payments to thousands of vendors. The reason is a short-term cash crunch caused by the budget battle in Harrisburg.
Mayor Nutter says the budget impasse in the state capital has led to a delay of $100 million dollars of state reimbursements to the city. And the city is unable to proceed now with a normally routine bond borrowing that brings in more cash. So Nutter is immediately suspending payments to every single vendor that does business with the city, from paper supplies to social service agencies that help foster children. The mayor urges the vendors to hang tight and not walk away:
"We are, of course, asking our vendor community to work with us through this crisis. And the city of Philadelphia will meet its obligations as soon as the state budget is passed."
Nutter also needs approval from the state for changes in the pension plan and a sales tax hike. He says if the state impasse continues he may be forced to impose more drastic measures -- including layoffs of workers and the closure of city programs.
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