Philadelphia gets budget help from state

HARRISBURG, Pa., Sept. 18 (UPI) -- The Pennsylvania Senate approved a bill Thursday allowing Philadelphia to increase its sales tax, averting layoffs and closings in the city.

The legislation also gives the city a two-year moratorium on payments into the pension system, The Philadelphia Inquirer reported. Gov. Ed Rendell, a former Philadelphia mayor, is expected to sign the bill quickly.

The Senate action ended weeks of uncertainty. City officials had prepared 3,000 layoff notices, which would have gone out Friday. Mayor Michael Nutter warned of closed libraries and recreation centers and shuttered courts and told residents trash pickup would be stretched out to once every two weeks.

Nutter was in Harrisburg when the Senate gave final legislative approval to the bill with a 32-17 vote. He immediately made a conference call to his managers, telling them "Plan C is terminated."

Under the legislation, the city can raise the sales tax from 7 percent to 8 percent for up to five years. Pension payments must be repaid with interest, beginning in 2013.

Public employee unions lobbied successfully against a provision in earlier version of the bill that would have allowed Philadelphia to cap pensions.