Philadelphia Mayor Michael Nutter yesterday announced that the city faces a new projected $1 billion budget deficit over the next five years due to declining revenues and increasing pension costs.

City officials in November eliminated a previous $1 billion deficit through fiscal 2014 and a $108 million shortfall in the current $4 billion fiscal 2009 budget through spending cuts and by delaying plans to lower corporate tax rates. Now the administration must search again for ways to shrink the city's budget by another $1 billion over the next five years, with the mayor open to all options in order to close that funding gap.

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